Delaware Whistleblowers' Act Applies to Constructively Discharged Employees?

In a recent Delaware Supreme Court case, an employment law issue of first impression was presented to and decided by the Court. The Supreme Court held, in Stephanie Smith v. Delaware State University, that an employee who is constructively discharged can pursue a claim under the Delaware Whistleblowers' Protection Act on the same basis as if she had been formally discharged.

 Stephanie Smith had been employed by Delaware State University in the Department of Public Safety. She reported to the Public Safety Chief, James Overton. Belinda Baker, a long-time friend of the Chief, was hired for the position of Captain in mid-2006. When Baker was hired, she was not certified as a police officer under the Delaware Council of Police Training Program. Without this certification, she was not permitted to carry a firearm. In late 2006, Baker asked Smith to issue her a handgun, despite the fact that she was not certified. Overton ordered Smith to issue Baker a handgun, despite the lack of required certification. Smith subsequently complained to Overton and also to the Administrator of the Council of Police Training. Smith alleges that after she complained about the order from Overton, her relationship with Baker and Overton deteriorated.

In January of 2007, Smith went on medical leave. Prior to her medical leave, Smith alleged that Overton told her that he would make her life "hell" or "miserable" if she returned to work. When Smith returned to work, she immediately submitted her resignation.

After Smith's separation of employment, she applied for unemployment benefits. In her application, she indicated that the basis for her separation of employment was false rumors about a purported relationship between herself and her boss. There was no allegation that Smith's problems were related to the hiring of Baker or her subsequent complaint regarding the issuance of a firearm.

Smith filed a Whistleblowers' Act complaint against Delaware State University. Smith alleged that the threat to worsen her working environment could give rise to a claim under the Whistleblowers' Act. She claimed that she was constructively discharged due to the complaint to her supervisor and the Council of Police Training Administrator regarding the issuance of a firearm to Baker.

The Supreme Court noted that, "[u]nder the constructive discharge doctrine, an employee's reasonable decision to resign because of unendurable working conditions is assimilated to a formal discharge for remedial purposes." The Court stated that, to prevail, the employee must establish that the "working conditions were so intolerable that a reasonable person would have felt compelled to resign." The Court held that a mere hostile work environment, without more, is insufficient to establish constructive discharge.

The Court held that the protections of the Whistleblowers' Act apply with equal force to those who have been constructively discharged. In reaching its conclusion, the Court wrote that it was respecting the Act's salutary purpose of protecting employees who are forced to resign due to unendurable working conditions. Nonetheless, the Court determined that Smith failed to offer sufficient evidence of constructive discharge, finding that many of her alleged intolerable conditions pre-dated her report regarding the issuance of a firearm to Baker.

As a result of the Smith decision, it is clear that plaintiffs may successfully assert Whistleblowers' Act violations based on a constructive discharge theory. However, they must be able to tie the intolerable working conditions alleged to the reporting of a violation of law.

After Smith, Delaware employers will face liability under the Whistleblowers' Act unless they guard against subsequent retaliatory behaviors that could cause an individual to resign his or her employment.

*Keri is an associate in our Wilmington, Delaware, office. She can be reached at 302.552.4372 or klmorris@mdwcg.com.

Defense Digest, Vol. 18, No. 4, December 2012