Whistleblowing – The Right and the Wrong Way to Do It

The Texas Whistleblower Act protects public employees who make good faith reports of violations of law by their employer or co-workers to an  “appropriate law enforcement authority.”  Under the Act, an employer may not suspend or terminate the employment, or take other adverse personnel action against, a public employee who makes a report under the Act.

The Texas Supreme Court recently ruled that an “appropriate law enforcement authority” does not include employee’s supervisor, even if that supervisor ensures internal compliance with the law within the organization.  Thus, while “[o]ther states’ whistleblower laws accommodate internal reports to supervisors; Texas law does not.”  In that regard, the Texas Whistleblower Act is very similar to the Dodd Frank Wall Street Reform and Protection Act, which also requires employees to make reports to an external entity, rather than internally.

In University of Texas Southwestern Medical Center at Dallas v. Larry M. GentilelloDr. Larry Gentilello, a professor of surgery at the University of Texas Southwestern Medical Center at Dallas, had complained to his supervisor, Dr. Robert Rege, that trauma residents in Parkland Hospital in Dallas were treating and operating on patients without an attending physician’s supervision, in violation of Medicare and Medicaid requirements and procedures.  After Dr. Gentilello was stripped of his faculty chair positions, he filed a whistleblower suit that alleged that the demotion was in retaliation for reporting the center’s violation of federal rules.

The Texas Supreme Court reasoned that just because the department chair could discipline employees who violated Medicaid/Medicare requirements, he did not qualify as an appropriate law enforcement authority under the Act.  Thus, Dr. Gentilello’s report to Mr. Rege was insufficient to afford him protection against retaliation under the Act.   The supervisor’s purely internal authority was not law enforcement but law compliance — in other words, the supervisor was only capable of ensuring that the medical center followed federal directives.  This bare power to urge compliance or pure noncompliance did not transform him into an “appropriate law enforcement authority” as defined in the Act.

MORAL OF THE STORY? If you want the protection of the Texas Whistleblower Act, blow the whistle to those authorities that either issue or enforce laws or investigate or prosecute their violation (hint: they are likely to be outside the organization).  Reporting a violation to an internal supervisor, with a few very narrow exceptions, will not afford the protection against retaliation under the Texas Whistleblower Act.

Leiza Dolghih is a partner at Lewis Brisbois Bisgaard & Smith LLP in Dallas, Texas and a Co-Chair of the firm’s Trade Secrets and Non-Compete Disputes national practice.  His practice includes commercial, intellectual property and employment litigation.  You can contact her directly at Leiza.Dolghih@LewisBrisbois.com or (214) 722-7108.