Court Opinion

ID: 9701497
Source: CourtListenerOpinion
Date Created: 2023-08-25 22:21:19.250122+00
Date Added: 2024-06-11T18:21:23.440944
License: Public Domain

DISSENT
MEYER, Justice
(dissenting).
I respectfully dissent. The majority opinion correctly states that the question in this case is whether Kratzer’s report— that Rand failed to disclose the terms of his commission agreement with Welshln-vest to John Hancock — was protected conduct under the whistleblower statute. In its analysis, however, the majority incorrectly limits the whistleblower statute to protect only reports of conduct that actually violate a law or rule, and then unneces*24sarily construes the rule at issue too narrowly. Because the whistleblower statute and our own precedent require a broader construction of the whistleblower statute, I would affirm the court of appeals’ reversal of the district court’s summary judgment ruling and remand for further proceedings.
As stated by the majority, we review de novo a district court’s order of summary judgment to determine whether there is any genuine issue of material fact and whether the district court correctly applied the law. Zip Sort, Inc. v. Comm’r of Revenue, 567 N.W.2d 34, 37 (Minn.1997). On appeal, the evidence is viewed in the light most favorable to the party against whom summary judgment was granted. Funchess v. Cecil Newman Corp., 632 N.W.2d 666, 672 (Minn.2001). The question before us — which reports are protected by the whistleblower statute — is one of statutory interpretation, which we also review de novo. Gomon v. Northland, Family Physicians, Ltd., 645 N.W.2d 413, 415-16 (Minn.2002). When interpreting statutes, our goal is to “ascertain and effectuate the intention of the legislature.” Minn. Stat. § 645.16 (2008). When possible, a statute should be interpreted “ ‘to give effect to all of its provisions, and no word, phrase, or sentence should be deemed superfluous, void, or insignificant.’ ” State v. Larivee, 656 N.W.2d 226, 229 (Minn.2003) (quoting Baker v. Ploetz, 616 N.W.2d 263, 269 (Minn.2000)) (internal quotation marks omitted).
The Whistleblower Act provides in relevant part:
An employer shall not discharge, discipline, threaten, otherwise discriminate against, or penalize an employee regarding the employee’s compensation, terms, conditions, location, or privileges of employment because:
(a) the employee, or a person acting on behalf of an employee, in good faith, reports a violation or suspected violation of any federal or state law or rule adopted pursuant to law to an employer or to any governmental body or law enforcement official!.]
Minn.Stat. § 181.932, subd. 1 (2008) (emphasis added). The majority limits the meaning of the term suspected violations to suspicions of a factual nature, not suspicions of violations of law or rule. Op. at 22-23 (“If it later turns out that the facts are not as the employee reported them in good faith to be, the conduct is protected so long as the facts, if they had been true, would be a violation of the law.”). I believe that limiting an employee’s report under the whistleblower statute to conduct that actually violates the law, as a matter of law, is too narrow an interpretation of “suspected violation,” and too narrow an interpretation of this court’s precedent and policy surrounding the whistleblower statute.
We first did an in-depth examination of the meaning of “a violation or suspected violation of any federal or state law or rule” under the whistleblower statute in Hedglin v. City of Willmar, 582 N.W.2d 897 (Minn.1998). We examined whether reports made by three firefighters to their fire department constituted reports of state law violations. Id. at 902. After separating the reports into three categories of conduct, we concluded that the first two categories of reported conduct “implicated” a number of statutes. Id. After broadly listing the statutes “implicated,” we stated:
There may be fact questions as to whether any of these statutes were actually violated, but for purposes of the whistleblower statute, it is irrelevant whether there were any actual violations; the only requirement is that the reports of state law violations were made in good faith. See Minn.Stat. *25§ 181.982, subd. 1(a). Because [the] reports of roll call sheet falsification and [the] report of firefighters driving fire trucks while drunk implicate possible state law violations, we conclude that these reports are protected by the statute if they were made in good faith.
Id. We then went on to analyze the third category of reported conduct; because we found “no statute or rule that is violated by such conduct, nor could [the firefighters’] counsel point to any such statute or rule,” those reports were not protected. Id.
We relied on Hedglin soon after in our decision in Obst v. Microtron, Inc., 614 N.W.2d 196 (Minn.2000). In Obst, an employee invoked the whistleblower statute by claiming he was terminated because (1) he reported to his employer that it needed to tell the manufacturer to which the company supplied windshield wipers that the employer had deviated from agreed-to wiper control testing requirements; or (2) he reported to the company about defective wiper controls being shipped to the manufacturer. Id. at 200. The employee argued both reports were of conduct that violated federal law. Id.
On the first claim, we held that the federal law that the employee invoked was not “implicated.” Obst, 614 N.W.2d at 202. The law only required the manufacturer to be notified of a defect — the manufacturer was well aware of the defect before the employee’s report, which was known to the employee. Id. at 202-03. The employee’s stated purpose in making the reports was to inform the manufacturer, but as the manufacturer knew of the defect, “it is difficult, if not impossible, to say that at the time the reports were made, his purpose was to expose an illegality.” Id. at 202. We noted that our conclusion did not turn on the employee’s knowledge or understanding of the law, but instead turned on “the content of his reports and his purpose in making the reports at the time they were made.” Id. at 203.
On the second claim, the federal law at issue was expressly limited to windshield wiper systems in finished motor vehicles, and not to the vehicle’s component parts, as shipped by the company. Id. at 204. The company’s deviation from the testing procedures therefore “did not implicate a violation of law.” Id. After a discussion of Hedglin, we commented that “it is clear that the report of a suspected violation of federal or state law must implicate an actual federal or state law and not one that does not exist.” Id. (emphasis added).
We then relied on Obst in our short analysis of this issue in Abraham v. County of Hennepin:
A whistleblower claim need not identify the specific law or rule that the employee suspects has been violated, so long as there is a federal or state law or rule adopted pursuant to law that is implicated by the employee’s complaint, the employee reported the violation or suspected violation in good faith, and the employee alleges facts that, if proven, would constitute a violation of law or rule adopted pursuant to law.
639 N.W.2d 342, 354-55 (Minn.2002) (emphasis added) (citing Obst, 614 N.W.2d at 204). We held that the whistleblower statute “does not require that an employee specifically identify in the pleadings the law or rule adopted pursuant to law that the employee suspects has been violated ... so long as the alleged facts, if proven, would constitute a violation of the law or rule adopted pursuant to law.” Id. at 355.
The majority relies heavily upon Obst to support its assertion that “suspected violation” encompasses only suspect or mistaken *26facts.17 In that decision, we said that “[w]hile there need not be an actual violation of law, the reported conduct must at least implicate a violation of law.” 614 N.W.2d at 200. The majority states that the proper reading of this sentence demonstrates that only mistakes in the factual allegations can excuse a report that doesn’t actually violate the law. However, such a reading would make that sentence dicta; in Obst, the employee knew the facts in the report were true, and there was no dispute as to his factual allegations. Id. Instead, the employee was wrong that laws were implicated by those alleged facts. Id. at 203. In examining our precedent on this issue, I do not read the language of our decisions to limit protection of the whistle-blower statute solely to those employees who have made mistakes on the alleged facts.
I acknowledge, though, that the majority appears to be following a developing trend in this court of construing “violation or suspected violation” in the whistleblower statute more and more narrowly, especially in terms of what can constitute a suspected violation of the law. However, if this trend continues, we will be requiring employees who wish to make a report of wrongful conduct to have enough knowledge of the law to know if a set of alleged facts would, if proven, be a violation as a matter of law. In other words, if the employee suspects wrongful conduct is a violation of a law, and is later determined to be wrong as to the law, that employee loses all protection from the whistleblower statute. Our holding in Abraham, that the employee does not have to identify in the pleadings the law or rule suspected to have been violated to be protected by the whis-tleblower statute, as long as some law is implicated, goes against requiring such legal analysis from employees.18
In Hedglin, we stated that the reported conduct must “implicate possible state law violations,” and we continued to use the term “implicated” in referring to the connection between a statute or rule and the whistleblower claim. 582 N.W.2d at 902 (emphasis added). Thus, once a rule is “implicated,” the analysis should turn on whether there was a good faith report of a suspected violation of that statute or rule.19 A definitive analysis of the rule does not, and should not, have to be done — the only *27question is whether a person could suspect, in good faith, that the implicated rule had been violated. See Hedglin, 582 N.W.2d at 902 (“[I]t is irrelevant whether there were any actual violations; the only requirement is that the reports of state law violations were made in good faith.”).
The crux of this' issue then becomes whether Kratzer’s report was a good faith report of a suspected violation of the implicated rule, Minn. R. 2805.2000, subp. 1(A) (1999). Under this framework, I contend that Kratzer’s report was protected.
Minnesota Statutes § 82.27 (2002) allows a real estate broker’s license to be denied, revoked, or suspended for, among other things, engaging in “a fraudulent, deceptive, or dishonest practice.” Minn. R. 2805.2000 defines what constitutes fraudulent, deceptive, or dishonest practices. Minnesota Rule 2805.2000, subp. 1(A), makes it a fraudulent, deceptive, or dishonest practice for a real estate broker to “act on behalf of more than one party to a transaction without the knowledge and consent of all parties.” The majority concludes that language in Minn. R. 2805.2000, subp. 1(A), clearly and unambiguously requires “knowledge and consent” of only the fact of the dual agency relationship, but requires no other disclosures. The majority relies on the fact that the court of appeals did not find any ambiguity in the rule, and the parties do not argue that the rule is ambiguous. I do not agree with the conclusion that the rule is unambiguous.
We have repeatedly said that statutory language is ambiguous if it is susceptible to more than one reasonable interpretation. State v. Mauer, 741 N.W.2d 107, 111 (Minn.2007). The interpretation set forth by Welsh Companies, which is followed by the majority, is that “knowledge and consent” under Minn. R. 2805.2000, subp. 1(A), requires disclosure and consent to only the existence of the dual agency relationship. The interpretation set forth by Kratzer and the court of appeals, on the other hand, is that “knowledge and consent” are terms of art in a dual agency context, terms that the common law has defined as knowing consent to all material facts that the real estate broker has a fiduciary duty to disclose. See Kratzer, 2008 WL 1747607, at *5. Although neither party asserts that the rule is ambiguous, their differing interpretations do not demonstrate a concession to the meaning of the rule. Instead, each asserts a reasonable interpretation of the plain meaning of the rule — making the rule far from “clear and unambiguous.”
It is not necessary for us to analyze which interpretation is correct. Suffice it to say that Kratzer’s interpretation of the rule supports a conclusion that he was reporting a suspected violation of the rule. Cf Obst, 614 N.W.2d at 203 (concluding that employee’s purpose was not to expose an illegality; the law only required the third party to be aware of a defect, and the employee knew the third party was aware). Viewing the facts in the light most favorable to Kratzer, he made a report believing that Rand’s failure to disclose the terms of Rand’s commission agreement to John Hancock was illegal. Specifically, he believed that the failure to disclose meant that John Hancock’s consent to Rand’s dual representation was not a knowing consent, and thus that failure was a fraudulent, deceptive, or dishonest practice under Minn.Stat. § 82.27 and Minn. R. 2805.2000. Kratzer has established a genuine issue of material fact on whether he made a good faith report of a suspected violation of the rule, and should be allowed to proceed with his claim. I would therefore affirm the court of appeals’ reversal of the district court’s sum*28mary judgment ruling and remand for further proceedings.

. The majority also relies on Nordling v. N. States Power Co., 478 N.W.2d 498 (Minn. 1991). In that case, the employee made a report to his manager that legal counsel told the employee of outside counsel’s recommendation of investigating or surveying employee lifestyles. Id. at 504. That proposal was "promptly squelched” by the company’s officers. Id. The employee could not identify a law or rule that was violated or suspected of being violated — there was no evidence of what type of investigation was recommended, and whether such investigation would have been illegal. Id.

. Narrowing the whistleblower statute to require an employee to only report activity that is known to be a violation as a matter of law also impedes the ultimate purpose of having such an exception to the general at-will rule of employment: to encourage the prompt reporting and resolution of potentially unlawful acts by employers, and to protect those employees who do report such matters from retaliatory action. See Minn.Stat. § 181.932, subd. 1; see also Anderson-Johanningmeier v. Mid-Minnesota Women’s Ctr., Inc., 637 N.W.2d 270, 274-75 (Minn.2002).

.In Obst, we stated that to determine whether a report is made in good faith, "we must look not only at the content of the report, but also at the reporter’s purpose in making the report.” 614 N.W.2d at 202. "The central question is whether the reports were made for the purpose of blowing the whistle, i.e., to expose an illegality.” Id. We look at the reporter’s purpose before the report was made to ensure that the alleged whistle-blowing report was made to expose the illegality and not to support a belated, after-the-fact whistleblower claim. Id.