No whistleblower protections for employee’s false allegations against employer

A recent arbitral decision reminds employers that an employee’s baseless allegations of misconduct are not protected as “whistleblower” activity and do not need to be tolerated.

In Jazz Aviation LP v ALPA¹ an arbitrator held that an employer was justified in terminating an employee who made repeated allegations of corruption against his employer and his union, without a “shred of proof.”

False allegations lead to termination

Jazz Airlines (the employer) received reports that one of its pilots (the grievor) was making concerning statements to fellow pilots and other employees. An investigation by the employer revealed the grievor made repeated, unsubstantiated allegations that the employer and leadership of the grievor’s own union were engaged in collusion, bribery, embezzlement, and fraud. The investigation found the grievor made these false allegations to colleagues in person, both on- and off-duty, and that he sent an email including the allegations to undisclosed workplace recipients.

The employer terminated the grievor for making false and egregious allegations that undermined the reputations of the employer, the union, and named individuals, and negatively impacted and disrupted the workplace. The employer cited as aggravating factors that the grievor was untruthful when confronted about the allegations and demonstrated no remorse or accountability for his actions.

The union grieved the termination. At arbitration the grievor claimed:

• He was a whistleblower protected under various statutes (including under securities legislation) and under the employer’s Code of Ethics and Business Conduct (the Code);
• His only duty as a whistleblower was to bring forward complaints, not to provide supporting details for such complaints; and
• Statements made off-duty could not be subject to discipline by the employer.

Arbitrator confirms the employer’s decision to terminate

The arbitrator rejected the grievor’s arguments and confirmed the employer’s decision to terminate.

Concerning the claim of whistleblower protections, the arbitrator noted the Code provided protection against retaliation for employees who report unethical behaviour in good faith. However, the grievor did not act in good faith because there was “absolutely no basis” for any of his allegations.

The grievor was aware of the Code’s procedure for bringing forward complaints, but chose not to follow that procedure. He also never sought out any information or documents that could verify his suspicions. At arbitration, the grievor did not provide a single document to substantiate his allegations. The arbitrator emphasized there was absolutely no evidence of the alleged misconduct on behalf of the employer or the union. As such, the arbitrator concluded the grievor acted with malintent, and the baseless allegations were “calculated to impugn the reputation of the employer and the union and cause distress and dissension in the workplace.” The grievor did not provide a “shred of proof” to support his statements, and thus was not a whistleblower.

The grievor’s reliance on securities legislation was misplaced, as the grievance had nothing to do with securities issues, but rather the grievor’s workplace misconduct.

The arbitrator also held that the grievor’s off-duty conduct was subject to discipline because the nature and substance of his claims directly engaged the vital interests of the company. Even if the grievor’s comments were made entirely off-duty, they would have been subject to discipline given the seriousness of the allegations.

Takeaways

Employers do not have to tolerate unfounded employee allegations that put their reputations at risk and contribute to a toxic workplace culture. They can take steps to protect their reputations and the psychological safety of the workplace. Employers are within their rights to investigate employee statements both within and outside the workplace, where those statements have a detrimental impact on the employer or the workplace generally. Unfounded, harmful allegations are not subject to “whistleblower” protections. They are properly the subject of discipline, up to and including termination.

Employers should also have established reporting procedures for good faith employee complaints or reports of organizational misconduct. Such procedures may be required by legislation. For example, most jurisdictions in Canada require employers to establish reporting procedures for workplace violence and harassment. Reporting procedures are also a best practice for promoting safe and ethical workplace conduct, and for channeling employee concerns toward mechanisms that can resolve them. Employees should be confident that if they have a concern they know how to report it, they know their report will be taken seriously, and they will suffer no reprisal for making a report in good faith.

The author would like to thank Joshua-Patrick Flowers, paralegal, for his contribution to preparing this legal update.