Wednesday, June 7, 2017

U.S. Fifth Circuit Adopts Broad Definition of “Good Faith” for Louisiana Environmental Whistleblower Claims

Originally published by Devin C. Reid.

On June 1, 2017, the United States Fifth Circuit Court of Appeals in Borcik v. Crosby Tugs, L.L.C. applied a broad definition of the intent required of a plaintiff under the Louisiana Environmental Whistleblower Act.  In doing so, both the Fifth Circuit and the Louisiana Supreme Court apply a more plaintiff friendly standard to claims of environmental whistleblowers.

In Borcik, the plaintiff alleged that, while he was a deckhand on a Crosby Tugs vessel, the lead captain of that vessel ordered him to dump waste oil into navigable waters over a period of three years.  The plaintiff claimed that he followed these orders.  He later reported these actions to Crosby’s Chief Administrative Officer, and, after that meeting, Crosby terminated the plaintiff. Borcik later sued Crosby, alleging retaliatory termination in violation of Louisiana Environmental Quality Act.  He specifically claimed that Crosby violated the Louisiana Environmental Whistleblower Act, R.S. 30:2027.

The Louisiana Environmental Whistleblower Act (“the Act”) contains harsh penalties.  That statute provides, in part, that “No … business … shall act in a retaliatory manner against an employee, acting in good faith, who . . . Discloses, or threatens to disclose, to a supervisor or to a public body an activity, policy, practice of the employer … that the employee reasonably believes is in violation of an environmental law, rule, or regulation.” Id. (emphasis added). A successful whistleblower may recover “triple damages resulting from the action taken against him,” costs, and attorney’s fees. Id.  The statute specifically defines “damages” to include “lost wages, lost anticipated wages due to a wage increase, or loss of anticipated wages which would have resulted from a lost promotion” within the three years prior to the action taken against the whistleblower.  A whistleblower may also include “property lost as a result of lost wages, lost benefits, and any physical or emotional damages resulting therefrom.”  Id.

The prerequisite to a whistleblower’s recovery is “good faith.”  In Borcik, the United States District Court for the Eastern District of Louisiana instructed the jury that a plaintiff must show “an honest belief that an environmental violation occurred and that he did not report it either to seek an unfair advantage or to try to harm his employer or another employee.” Borcik v. Corsby Tugs, L.L.C., 15-30435, 2017 WL 2374115 (5th Cir. June 1, 2017) (emphasis added).  On appeal, the United States Fifth Circuit Court of Appeals requested that the Louisiana Supreme Court define the term “good faith” under the Act.  On May 3, 2017, the Louisiana Supreme Court responded that “good faith” under the Act requires that “an employee is acting with an honest belief that a violation of an environmental law, rule, or regulation occurred.”  Borcik v. Crosby Tugs, L.L.C., 2016-1372, — So. 3d —, 2017 WL 1716226 (La. 5/3/17).  The Louisiana Supreme Court explained that a broader definition of “good faith” than that used by the federal district court “promotes the purpose of the LEQA and balances competing interests of the State and the environment, employers and industry, and employees, by encouraging reporting of environmental violations and protecting employers from potential whistleblowers who are not operating in good faith.”  Id.  On June 1, 2017, the Fifth Circuit adopted this definition and held that the district court erred “by instructing the jury that ‘good faith’ required more than ‘an honest belief that a violation of an environmental law, rule, or regulation occurred.’” Borcik v. Corsby Tugs, L.L.C., 15-30435, 2017 WL 2374115 (5th Cir. June 1, 2017).

The definition of “good faith” under the Louisiana Environmental Whistleblower Act as adopted by both the Louisiana Supreme Court and the United States Fifth Circuit Court of Appeals cautions all employers to handle their employees’ concerns of environmental violations with care.  Otherwise, employers face not only governmental investigation but also possible civil suits by whistleblowers with the potential for large damages awards.

A copy of the United States Fifth Circuit Court of Appeals decision is available here. A copy of the Louisiana Supreme Court’s decision is available here.

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