Judge Tosses Jury Whistleblower Verdict

July 24, 2003 (PLANSPONSOR.com) - A St. Louis, Missouri judge has tossed out a previous jury verdict against Enterprise Rent-A-Car, ruling a former executive is not eligible for whistleblower protections.

Senior Judge Jack Koehr vacated a St. Louis Court jury’s April verdict awarding former Enterprise Vice President and Corporate Controller Thomas Dunn $4 million for unlawful retaliation by Enterprise for questions he raised about questionable business practices. However, Koehr found since Dunn did not establish that Enterprise violated any statute, regulation or constitutional provision, he was not entitled to whistleblower protections, according to a St. Louis Post-Dispatch report.

Dunn’s attorneys question Koehr’s judgment in making the call and are planning to appeal the decision. By requiring that Dunn prove Enterprise broke a law, Jerome Dobson, one of Dunn’s attorneys said, Koehr set a new and higher legal standard for shielding an employee under whistleblower protections. This interpretation will form the basis of Dunn’s appeal to the Missouri Court of Appeals, he said.

The existing standard requires proof that an employee had a “good faith belief” that an employer was violating a law or regulation, Dobson said. Yet, Koehr said if Dunn prevails on appeal and the jury verdict is reinstated, Enterprise is entitled to a new trial. “The weight of evidence” does not support a finding that Dunn suspected Enterprise of violating laws or that he was fired for internally reporting suspected violations, Koehr wrote.

Case History

Dunn alleges he was dismissed from his post on January 4, 2001 for refusing to follow accounting practices that could have put the company in a more favorable light for an initial public offering (IPO) of stock that had been planned for the fall of 2000. Enterprise elected not to go forward with the IPO and never filed offering documents with the US Securities and Exchange Commission (SEC).

Additionally, Dunn contends Enterprise did not approve of his handling of internally reporting business practices he thought were illegal. These included allegations that Enterprise added surcharges in some markets in a manner that might cause customers to think the fees were taxes and that the company had licensed a disproportionate number of rental cars in lower-tax states.

Enterprise holds this is not the case, and that Dunn was let go for multiple violations of Enterprise’s “culture of teamwork and respect for co-workers and job applicants,” an Enterprise spokeswoman said.

Under Missouri law, employees not covered by union contracts or other protections can be fired at will. Yet public policy and case law provide exceptions when employees are subject to retaliation for reporting wrongful acts or refusing to perform them.

Koehr ruled during the course of the trial that Dunn could not pursue a claim that he was fired for refusing to commit an illegal act because Enterprise had not filed securities documents violating any laws.