Former employee sues district, claims it violated Whistleblower Act

A former employee sued a school district, arguing that it violated the Whistleblower Act when it nonrenewed her contract. The lawsuit was dismissed and the employee filed an appeal with the Court of Appeals.

The employee was the director of the child nutrition department. She notified her supervisor that money was missing from the department's accounts. The employee believed that the district's chief financial officer used the missing funds to cover other district expenses. After noticing further accounting discrepancies, the employee contacted the district's police department to report the missing money. In her report, she alleged that the total amount taken out of the Child Nutrition Fund was $3,162,477.21.

The district placed the CFO on administrative leave with pay and later terminated her employment.

The former CFO was elected to the district's Board of Trustees the following year. A couple of months after the election, the superintendent issued a formal reprimand to the child nutrition department employee, stating that the district had investigated and substantiated allegations that she engaged in unprofessional behavior. 

Specifically, it stated that she argued loudly with subordinates, establishing a tense work environment; arrived at work late on a consistent basis and allowed subordinates to do the same; and frequently used profanity in front of employees, while allowing employees to do the same. Despite this reprimand, the employee's contract was renewed for the following year.

A couple of years later, the former CFO became the president of the district's board of trustees. Shortly thereafter, the employee was told that the superintendent and chief financial officer were visiting cafeteria managers and inquiring whether they had any complaints concerning her. She was placed on administrative leave while an investigation took place regarding allegations of misconduct. The employee later learned that the complaint that formed the basis of the investigation was filed by the former CFO's nephew.

At the end of the school year, the district informed the employee that her contract would not be renewed for the following school year and her employment ended as a result. The employee filed a grievance to contest the decision of the district to end her employment. That grievance was denied by the board of trustees and the employee filed a lawsuit, alleging that after the former CFO was elected to the board of trustees, she suffered harassment from the superintendent. She claimed she was placed on administrative leave and wrongfully terminated in retaliation for her prior reporting of the misappropriation of district funds. The lawsuit was dismissed in district court, and the woman appealed.

In evaluating her claims, the court of appeals noted that in a whistleblower suit, the employee must show evidence that there was a causal connection between the report of illegal activity and the adverse employment action. That evidence can be established through the following conditions:

1. the decision-maker's knowledge of the report of illegal conduct; 
2. the expression of a negative attitude toward the employee's report; 
3. a failure to adhere to policies regarding employment decisions; 
4. discriminatory treatment in comparison to similarly situated employees; and 
5. evidence that the stated reason for the adverse employment action was false.

Here, the court found that only one of these factors was present — specifically, that the district knew that the employee had made the report of illegal conduct. 

In contrast, there was evidence present that argued against a causal connection, in that four years had elapsed between the report and the employee's nonrenewal, a lack of evidence that the former CFO had directed or otherwise told the superintendent to initiate an investigation, and the fact that the former CFO was only one of seven board members and a majority vote was necessary in order to take action against the employee. 

There was no evidence presented that the other six board members had knowledge of the employee's report or that they acted with retaliatory motive. 

The court concluded that although it was "compelling" that the former CFO, who was terminated as result of the employee's report and was later a board of trustee member at the time of the adverse employment action, "this alone is not evidence of a causal connection absent evidence that a retaliatory motive was shared by all decision makers."

The court of appeals upheld the decision to dismiss the lawsuit.