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Internal Whistleblowing in Missouri: Reports of Suspected Wrongdoing to the Alleged Wrongdoers Does Not Support A Wrongful Discharge Claim

Last week, the Missouri Court of Appeals handed down a seemingly rare decision in favor of employers. In Drummond v. Land Learning Foundation, the former president of a non-profit entity that markets land to hunters alleged he was wrongfully terminated for whistleblowing on what he believed to be tax fraud on the part of the entity’s two owners, who are brothers. Specifically, Drummond became concerned when he learned of the entity’s receipt of $175,000 in public funds for a conservation easement he believed was illegal. Drummond confronted the two owners with his concerns on several occasions. In a final meeting, Drummond again confronted the owners about his concerns. The owners terminated Drummond’s employment immediately. Drummond subsequently contacted the IRS and the Army Corps of Engineers to report the alleged tax fraud. Drummond also filed a lawsuit against his former employer, invoking the “whistleblowing exception” to the at-will employment doctrine and alleging wrongful discharge in violation of public policy.

The employer moved for summary judgment before the trial court and prevailed. The trial court concluded that Drummond’s report of suspected wrongdoing to the owners – the suspected wrongdoers – did not constitute whistleblowing. The trial court also concluded that Drummond’s reports to the IRS and Army Corps – after his discharge – did not constitute whistleblowing.

On appeal, Drummond continued to argue that he “blew the whistle” sufficiently to maintain a wrongful discharge claim by reporting the suspected wrongdoing to the owners. The Missouri Court of Appeals, like the trial court, rejected Drummond’s argument. The court, looking to several recent decisions regarding wrongful discharge claims, noted that Missouri public policy encourages employees to report wrongdoing to expose, prevent, and aid in the prosecution of wrongdoing. The court also observed that whistleblowing may be internal or external, but concluded that a report of wrongdoing to the wrongdoer is not sufficient to invoke the whistleblowing exception. As the court explained, while reporting wrongdoing to the wrongdoer may in some instances prevent future wrongdoing, “it does not expose wrongdoers and their past wrongdoings in such a way as to remedy a public ill.” In fact, the court concluded that reporting wrongdoing to a wrongdoer may have the unintended effect of allowing wrongdoers to go undetected, “while in no way affording the victims an opportunity to protect themselves from further wrongdoing.”

Drummond, however, maintained that his case was unique, in that he did not have any superiors or supervisors internally to report his concerns to (other than the suspected wrongdoers). While the court was sympathetic to Drummond and others employed by small businesses with few avenues for internal whistleblowing, the court concluded that it was “bound by precedent” and noted that Drummond could have reported his concerns externally before the termination of his employment. Consequently, because Drummond did not report his concerns to anyone other than the suspected wrongdoers before his discharge, the court concluded that Drummond did not engage in whistleblowing and affirmed summary judgment in favor of his former employer.

The decision in Drummond presents some very unique circumstances and, ultimately, may not have a broad impact on wrongful discharge claims under Missouri law. Nonetheless, Drummond recognizes a common sense interpretation of the whistleblowing exception to the at-will employment doctrine. In short, an employee must actually “blow the whistle” to someone other than the alleged wrongdoer to be afforded the protections of Missouri’s whistleblowing exception. While this case may make its way to the Missouri Supreme Court, Drummond is, for now, a notable victory for employers. Stay tuned.