Opinion ID: 134
Heading Depth: 2
Heading Rank: 2

Heading: Kentucky Whistleblower Act Claims

Text: Ky. Rev. Stat. § 61.102 prohibits retaliation by an “employer” against an employee who engages in any whistleblowing activity as follows: No employer shall subject to reprisal . . . any employee who in good faith reports, discloses, [or] divulges . . . any facts or information relative to an actual or suspected violation of any law, statute, executive order, administrative regulation, mandate, rule, or ordinance of the United States, the Commonwealth of Kentucky, or any of its political subdivisions, or any facts or information relative to actual or suspected mismanagement, waste, fraud, abuse of authority, or a substantial and specific danger to public health or safety. Ky. Rev. Stat. § 61.102 goes on to define “employer” as: “. . . The Commonwealth of Kentucky or any of its political subdivisions.” However, the Whistleblower Act does not define “political subdivision.” The parties agree that Jeffersontown is a municipality, or municipal corporation. However, they dispute whether it is a political subdivision of the Commonwealth of Kentucky, and, thus, whether Jeffersontown is an employer under the statute. In Consolidated Infrastructure Mgmt. Auth., Inc. v. Allen, 269 S.W.3d 852 (Ky. 2008), the Kentucky Supreme Court provided guidance as to whether a municipality is a political subdivision for purposes of the Whistleblower Act. In Allen, the Kentucky Supreme Court affirmed a jury trial award under the Whistleblower Act to a former Safety Director of the Consolidated Infrastructure Management Authority (“CIMA”) of the cities of Russellville and Auburn, who was fired after reporting numerous safety violations in the Auburn facility. Id. at 854. The former employee, Thomas Everette Allen, had worked as Safety Director for the City of Russellville before the city 6 joined with the City of Auburn to form CIMA. Id. After Allen won his jury award, CIMA dissolved and was absorbed by the cities of Russellville and Auburn. Id. at 857. The court held that the judgment, which was entered against the municipal corporation CIMA, continued to be enforceable against the municipalities of Russellville and Auburn after CIMA dissolved. Id. (citing 56 Am. Jur. 2d, Municipal Corporations, Etc. § 80 (2008) (“if a municipal corporation goes out of existence by being annexed to, or merged in, another corporation, and if no legislative provision is made respecting the property and liabilities of the corporation which ceases to exist, the corporation to which it is annexed, or in which it is merged, is entitled to all its property and is answerable for all its liabilities”)). Thus, the court approved of applying the Whistleblower Act to a municipality by upholding the jury award. Regardless of whether the parties raised the issue, the court would have been obligated to overturn the award if the statute did not apply to the defendants. In addition, the Supreme Court of Kentucky has said that the Whistleblower Act must be liberally construed to serve its remedial purpose. Workforce Dev. Cabinet v. Gaines, 276 S.W.3d 789, 793 (Ky. 2008). In Gaines, the court indicated that the purpose of the Whistleblower Act is both “to protect employees who possess knowledge of wrongdoing that is concealed or not publicly known, and who step forward to help uncover and disclose that information” and to discourage wrongdoing in government. Id. at 792 (internal citations omitted). In the case at issue, Plaintiffs possessed knowledge of alleged misconduct at the police department that was not publicly known, and they stepped forward to help uncover and disclose that information. Thus, Plaintiffs are the type of employees that the statute was designed to protect. 7 Defendants point to the doctrine of sovereign immunity, which Kentucky courts have extended to states and counties but not municipalities, to argue that municipalities are not political subdivisions of the state for purposes of the Whistleblower Act. See, e.g., Withers v. Univ. of Ky., 939 S.W.2d 340 (Ky. 1997); Kentucky Ctr. for the Arts v. Berns, 801 S.W.2d 327, 331 (Ky. 1990). This Court acknowledges that Kentucky courts have recognized a distinction between municipalities and counties and agencies of the state for purposes of sovereign immunity. At the same time, Kentucky courts have both declined to extend sovereign immunity to a water district, see Calvert Inv. Inc. v. Louisville & Jefferson County Metro. Sewer Dist., 805 S.W.2d 133, 136-37 (Ky. 1991), and found that a water district may be classified as a political subdivision for purposes of the Whistleblower Act. See Davis v. Powell’s Valley Water Dist., 920 S.W.2d 75, 78 (Ky. App. 1995). Thus, whether an entity receives sovereign immunity in Kentucky does not appear to be dispositive of whether that entity is a political subdivision for purposes of the Kentucky Whistleblower Act. Two unpublished federal district court opinions holding that municipalities are not political subdivisions under the Whistleblower Act were decided before the Kentucky Supreme Court provided its guidance in Allen. See Baker v. McDaniel, No. 07 CV 379, 2008 WL 215241 (E.D. Ky. Jan. 24, 2008); Nelson v. City of Somerset, et al., No. 03 CV 591, R.E. 13 (E.D. Ky. Apr. 5, 2004). Moreover, a federal district court decision is not binding on the Kentucky Supreme Court for purposes of resolving issues of Kentucky state law. Because the role of this Court is to attempt to predict what the Kentucky Supreme Court would do, we are obliged to follow the Kentucky Supreme Court’s guidance in Allen. Here, like in Allen, Plaintiffs were employed by a municipal corporation, and they were fired after reporting alleged violations committed by that employer. Consequently, like the plaintiffs in 8 Allen, they seek to enforce the Kentucky Whistleblower Act against the municipal corporation that fired them. Because Plaintiffs engaged in precisely the type of behavior that the Whistleblower Act is designed to protect, and the Kentucky Supreme Court indicated in Allen that the statute is enforceable against municipal corporations, Plaintiffs may proceed with their claim under the Kentucky Whistleblower Act against the City of Jeffersontown. Accordingly, relying on the guidance provided by the Kentucky Supreme Court, we hold that the district court erred in holding that a municipality is not a political subdivision of the state, and, therefore, is not an employer for purposes of Kentucky’s Whistleblower Act, Ky. Rev. Stat. §§ 61.101-103.