Court rejects company's claim that termination cannot be tied to protected activity

Jeri Kaupp was hired to handle the payroll for Mourer-Foster, Inc., a Lansing area business.  She immediately became concerned that the company was violating the law by not paying overtime, making illegal deductions from employee's paychecks, retroactively extinguishing overtime pay that had been approved by supervisory personnel and calulating overtime on a bi-weekly, rather than a weekly basis.  When she attempted to raise the issue, she was repeatedly and heatedly rebuffed by the owners.  Eventually, she emailed to the Department of Labor on an anonymous basis, seeking feedback about the legality of these practices.  When the Labor Department confirmed her suspicion that these practices were probably illegal, she again confronted the owners.  This time, her payroll duties were immediately taken from her and she was fired within weeks.

The Court of Appeals noted that Ms. Kaupp cannot prove violation of a Whistleblower's protection solely on the basis of the temporal proximity of her discipline, and the company claimed that it fired her only because she could no longer work with one of the owners.  Nevertheless, two of the judges pointed to the company's repeated hostility to her nagging over the illegal activity, the company's immediate removal of her bookkeeping duties after she contacted the DOL, the company's admonishment of her for contacting the DOL, and one of the owner's statements repudiating government interference with his payroll, to corroborate Kaupp's Whistleblower claims. 

The majority therefore concluded that it was a factual question for the jury to decide whether Kaupp was fired for a "legitimate business reason", i.e., because of the company's claim that she admitted she could no longer work with one of the owners; or whether she was actually terminated for blowing the whistle on illegal activity.  Not surprisingly, Judge Richard Bandstra dissented and would have held that the company was free to violate the law with impunity because there wasn't adequate evidence of the company's illegal intent.