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Whistleblower / Illegal Activity Claims

Mississippi and Tennessee are “at-will” employment jurisdictions.  This means that, subject to limited exceptions, an employer may terminate an employee for any reason (good or bad) or for no reason at all.  One exception to the at-will rule is where the employer fires the employee in such a way that a federal employment law is violated.  An example is where the employee is fired because of his race, color, religion, sex or national origin as this termination would violate Title VII of the Civil Rights Act of 1964.

Mississippi recognizes at least two other important exceptions to the at-will employment rule.  First, it is unlawful for an employer to fire an employee who refuses to participate in an illegal act.  Second, it is unlawful for an employer to fire an employee who “blows the whistle” on the employer’s illegal activity by reporting illegal acts of his employer to the employer or anyone else.  These claims were recognized by the Supreme Court of Mississippi in the case of McArn v. Allied Bruce-Terminix Co., 626 So. 2d 603, 607-08 (1993).  Generally speaking, an employee must file such a claim with the appropriate court within three years of learning of the employer’s decision to terminate employment.

Tennessee also protects employees who are discharged or terminated for refusing to participate in illegal activities or for speaking out about illegal activities.  These claims are created under Tennessee common law and under a statute, the Tennessee Whistleblower Act, Tenn. Code § 50-1-304.  See discussion in Guy v. Mut. of Omaha Ins. Co., 79 S.W.3d 528 (Tenn. 2002).  Generally speaking, an employee must file such a claim with the appropriate court within one year of learning of the employer’s decision to terminate employment.

Federal law has created other whistleblower claims, too.  For example, the Sarbanes-Oxley Act of 2002 creates an administrative complaint procedure and a federal civil cause of action designed to protect the employees of publicly traded companies who lawfully provide information or otherwise assist in an investigation regarding any conduct which the employee believes constitutes a violation of federal mail, wire, bank, or securities fraud statutes, any rule or regulation of the Securities and Exchange Commission, or other provisions of federal law relating to fraud against shareholders.  Sarbanes-Oxley prohibits publicly traded companies and their officers, employees, contractors, subcontractors and agents from discharging, demoting, suspending, threatening, harassing or in any other manner discriminating against an employee in the terms and conditions of employment because the employee engages in conduct protected by the Act.

If you or someone you know in the North Mississippi/West Tennessee area is in need of representation or legal advice from an experienced employment lawyer, contact the attorneys of Stroud & Harper, P.C., by making a toll-free call to (866) 359-4878. Or, if you prefer, complete the Free Online Case Evaluation form, which you can find on the Areas of Practice page.