Covid-19 Whistleblower Litigation Is Surging:

Workplace Safety Compliance Reduces Employer Exposure

In Michigan, an employee alleging whistleblower retaliation pertaining to COVID-19-related workplace safety issues may file an action in court pursuant to Michigan’s Whistleblower Protection Act (WPA) or a complaint with Michigan’s Occupational Safety and Health Administration (MIOSHA).

From Jan. 30, 2020 to March 17, 2021, whistleblower retaliation cases represented the largest category of COVID-19-related litigation filed in Michigan courts, accounting for 37% of such litigation and ranking Michigan sixth in the nation for whistleblower filings (fisherphillips.com/covid-19-litigation).

During the first six months of the pandemic, the U.S. Department of Labor Office of Inspector General found that approximately 30% more OSHA complaints were filed when compared with the same period in 2019, with 39% of such complaints directly linked to COVID-19.

A comparable increase in COVID-19-related complaints was also seen in state OSHA-certified programs. MIOSHA recently indicated that it plans to extend its COVID-19 Emergency Rules (effective Oct. 14, 2020 to April 14, 2021) through September 2021, which include requirements for a COVID-19 Preparedness and Response Plan, infection prevention and health surveillance, industry-specific protocols, training, and specific requirements for masking, social distancing, and remote work when feasible.

With more than 100 million COVID-19 vaccinations given and recent statistics showing a decline in the number of cases, hospitalizations and deaths, many employees remain concerned about their risk of exposure in the workplace, while others see such progress as a reason to relax masking, social distancing and other mitigation efforts. These varying perspectives create a unique challenge for employers who must continue to enforce the MIOSHA Emergency Rules and avoid the risk of exposure to liability from whistleblower complaints.

The Whistleblower Protection Act (WPA)

An understanding of how the WPA works will assist employers in reducing their exposure to retaliation claims. The purpose of the WPA is to protect the public by protecting the reporting employee from subjection to adverse employment actions. As such, the WPA is liberally construed to favor the reporting employee who it seeks to protect.

An employer with one or more employees is subject to the WPA. The circuit court has exclusive jurisdiction over WPA actions, regardless of the amount in controversy, and a plaintiff bringing a WPA claim has the right to a jury trial.

To establish a prima facie WPA case, the employee must that show that s/he: 1) engaged in a protected activity; 2) was subjected to an adverse employment action; and 3) a causal connection existed between the protected activity and the adverse employment action. A “protected activity” occurs when an employee reports or is about to report an employer’s violation or suspected violation of law, regulation, or rule to a public body, or participates in an investigation related to a whistleblower complaint held by a public body or in a court action.

The WPA protects employees who, in good faith, make or are about to make a report of a violation even if there is no actual violation of law, but does not protect employees who knowingly make a false report of a violation. The WPA defines “adverse employment action” more narrowly than other state discrimination laws, requiring the employee to demonstrate “termination, threats, or other discrimination against an employee regarding compensation, terms, conditions, location, or privileges of employment.”

To establish the existence of a “casual connection” between the protected activity and the adverse employment action, the employee must show that the employer knew of or believed that the employee engaged in a protected activity. Merely showing a close temporal connection between the two events, without more, will not establish a causal connection.

The remedies available to a prevailing plaintiff include “reinstatement of the employee, the payment of back wages, full reinstatement of fringe benefits and seniority rights, actual damages, or any combination of these remedies.” In addition, a prevailing plaintiff may collect emotional distress damages by proving they are related to the WPA violation, and be awarded the costs of litigation, which include attorney fees and witness fees.

MIOSHA Retaliation Complaints

Under MIOSHA’s anti-retaliation provisions, an employee has the right to file an administrative complaint with the agency that is timely filed within 30 days of the event or occurrences, and stems from a safety and health issue. Specifically, MIOSHA protects an employee who “exercises a right afforded under the act on behalf of themselves or others and who files a complaint under, institutes a proceeding under, or testifies or is about to testify in a proceeding brought under the act from retaliatory action or discrimination.”

The agency will investigate the complaint and issue a determination, which is subject to appeal before an administrative law judge with the Michigan Office of Administrative Hearings and Rules, who issues the final decision.  An employee who seeks to file an action under the WPA when the employer’s wrongful conduct also violates the MIOSHA, is not required to file with MIOSHA.

Best Practices for Reducing Exposure to Whistleblower Claims

Employers can reduce their potential exposure to COVID-19-related whistleblower claims by ensuring their COVID-19 Preparedness and Response Plan is compliant and evenly enforced. In this regard, on March 12, 2021, OSHA published a National Emphasis Program in effect through March 12, 2022, focusing on workplace COVID-19 compliance, including increased announced and unannounced site inspections.

Additional employer best practices include encouraging employees to report health and safety concerns, training management on receipt of safety complaints and investigation, updating anti-retaliation policies, and working with legal counsel to ensure compliance and reduce risk of exposure to liability.

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Janis L. Adams of Danbrook Adams Raymond PLC is an experienced employment law attorney and business owner. You can reach her at jadams@darlawyers.com

This article was featured in the April 2021 issue of the Traverse City Business News.

From Vine To Pure Michigan Wine: How Growers, Producers And Retailers Are Regulated

Our region’s gently rolling topography is spotted with endless rows of grape trellises winding toward the turquoise lakeshore. Each year, more of our agricultural landscape continues to be converted to grape production.

Why, you ask? You guessed it. Wine. Pure Michigan wine. It takes a lot of grapes to produce the roughly three million gallons of wine bottled here in Michigan. But, just how do all those grapes make their way into bottles of wine and who controls that?

The Michigan Liquor Control Commission (MLCC), in conjunction with the Alcohol and Tobacco Tax and Trade Bureau (TTB), is tasked with regulating the manufacture, import, possession, transportation and sale of liquor in Michigan. Michigan maintains a three-tier system of alcohol distribution consisting of manufacturers, retailers and distributors. Almost anyone in the business of manufacturing, importing, possession, transporting or selling alcoholic beverages in the state of Michigan must be licensed through the MLCC and the TTB. So where do our local vineyards, wineries and wine shops fit in?

Got Grapes?

Vineyards are where it all begins. The quality of wine produced depends heavily on the quality of grapes used in that wine. So, does the MLCC really regulate how grapes are grown? The answer is no, as long as the grape grower’s role is strictly limited to growing and selling grapes in their natural state. Since grapes on the vine have not yet been fermented, they are not considered “alcohol,” which keeps grape growers out of the purview of the MLCC and the TTB. (They are subject to other rules and regulations imposed by the Michigan Department of Agricultural and Rural Development.) Additionally, since wine producers want the highest quality product and demand certain grape varietals, agreements between the grape grower and the winery are put in place to lay out specific terms not only for the purchase of grapes, but also expectations for strict farm management practices.

So, You Want to be a Winemaker

Maybe being the mastermind behind crafting world-class wine is your calling. Becoming involved in the actual production of wine triggers licensing and regulation of your activities by both the MLCC and the TTB – unless it is only for your own consumption. Most winemakers in Michigan will produce less than 50,000 gallons of wine annually, and therefore fall into the small wine maker category. Obtaining a small wine maker license from the MLCC requires – among other things – compliance with local zoning, approval from the local governmental entity, fingerprinting and background checks, entity documentation, inspection of financial records and the licensed premises, as well as payment of applicable fees. A winemaker is also required to be licensed at the federal level with the TTB, including registration and approval of all wine labels. While a licensed winemaker will have authority to self-distribute to retailers or sell to licensed wholesalers, a separate permit is required for an on-premises tasting room or direct wine sales to consumers.

Have Wine, Will Travel

So vineyards are not your thing, and you do not want to spend hours checking pH and sugar levels during fermentation. Instead, you decide the sale and distribution of wine to licensed retailers (i.e., your favorite local wine shop) is what you’d like to do. Well, just because you are not producing the wine doesn’t mean you can just sell the wine out of the back of your van. The MLCC and the TTB require distributors of wine to be licensed. A wholesale license allows the distributor to purchase wine from a licensed manufacturer for the purpose of reselling that wine to a licensed retailer. Among other requirements, a wholesale licensee is required to be a Michigan resident for at least one year prior; they cannot sell directly to the consumer; all vehicles used to transport the wine require MLCC vehicle decals; and all individuals engaged in the sale, promotion or delivery of wine are required to have a salesperson license. Additionally, wholesalers must enter into written distribution agreements with the winemakers granting the wholesaler a certain sales territory where they can sell that specific brand of wine.

Just Sell It

If relying on Mother Nature to grow grapes stresses you out, you have no room for stainless steel fermenting tanks, and you do not want to drive around selling wine; perhaps selling wine directly to the consumer is right up your alley.  So, can you just start selling wine out of your storefront?  No. The MLCC regulates the retail sale of wine to the consumer, and requires a retailer to be properly licensed.  Convenience stores, grocery giants and specialty markets alike, all must hold certain on-premises or off-premises retail licenses in order to purchase wine from manufacturers or wholesalers for resale to the consumer.  The process for obtaining a retail license from the MLCC is similar to that of licenses in the other tiers; however, choosing the appropriate type of retail license depends on the activities conducted at the retail location.

From the vine, to fermentation, to bottling and careful placement on our favorite store’s shelves, each glass of Michigan wine should certainly be celebrated. The numerous regulations, laws and administrative rules of the MLCC and the TTB touch almost every aspect of winemaking and being able to navigate them is critical in obtaining and maintaining proper licensing. So, if you happen to run into one of our many local and talented grape growers, winemakers, distributors or retailers, please shake their hand. Thank them for continuing their dedication to this region’s economic stability, preservation of our region’s rich agricultural history, and of course for their contribution to the creation of some of the most delicious wines produced worldwide.

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Cortney Danbrook advises business clients on liquor licensing and regulatory compliance and provides specialized counsel to individuals, families and businesses in the areas of estate planning and administration. She can be reached at (231) 714-0163 or cdanbrook@darlawyers.com.

This article was featured in the June 2019 issue of the Traverse City Business News.