No, you do not have a case to sue the company. You indicate that you failed to report the violation to higher management initially: that would have been grounds to have terminated you "for cause" (no unemployment benefits) due to abetting or concealing a violation of company policy. Because they could have terminated you for this, they could do something less than or short of termination, such as demoting you and reducing your pay. Your boss may have broken the policy, but you concealed that breach.Furthermore, unless you had a written employment contract guarantying or protecting your job, you were an employee at will; as an employee at will, you may be terminated--or suspended, demoted, pay cut, etc.--at any time, for any reason whatsoever, and regardless of whether it is fair or not. Employees at will have no rights to or protection for their jobs.So based on what you write, your employer had justification and a right to do this, and you would not have any grounds for a lawsuit.