Labeling Administrative Leave – Not Discipline, but not Categorically Excluded from Constituting Adverse Employment Action

At the Wiley Law Office, we’ve blogged about arbitration awards that found employees had not suffered any form of discipline when being placed on administrative investigatory leave.  However, when an employer places an employee on administrative leave following an employee’s report of potentially illegal activity, it is possible a court could find that action to constitute an adverse employment action. 

This concept was discussed in a recent Minnesota Court of Appeals decision between the city of New Brighton and its employee, Sergeant Stephen Moore.  Moore was a 29-year employee of the city’s police department, and in March of 2015, he was required to attend training outside of his regular hours.  The city did not pay him or any other officers overtime for attending the training, and Moore filed a grievance for the non-payment.  The grievance went through multiple steps, and the city ultimately paid the overtime for all employees who attended the training. 

According to the decision, one month after the grievance was filed, the city started investigating Moore for two separate violations – approving a subordinate officer’s unscheduled work hours and fraudulent use of sick leave.  They placed him on administrative leave as a result of the investigations on June 3, 2015.  As part of the leave, Moore was ordered to remain in his home from 8:00 a.m. to 4 p.m. Monday through Friday. 

The investigations took two months to complete, and Moore was informed of their conclusion at the end of July, 2015.  However, the city did not return Moore to his position until seven months after the investigations were concluded.  The city also assigned him to an administrative sergeant position managing cars and equipment, and gave him an unacceptable performance evaluation for his performance in the previous year.  In June, 2017, Moore was given an oral reprimand for insubordination, and Moore responded by bringing suit for violations of the Minnesota Whistleblower Act.  He claimed that all adverse actions taken against him by the City were the result of the grievance he filed for unpaid overtime. 

At District Court, the City was able to secure summary judgment, as the court found the City’s actions did not constitute adverse employment action.  Following the decision, Moore appealed the decision, and the City cross-appealed, claiming the district court had no jurisdiction to rule on the original claim, as the employee’s only remedies were to file an unfair labor practice or file another grievance against the City for its actions.  Citing Edina Educ. Ass’n v. Bd. Of Educ. Of Indep. Sch. Dist. No. 273, the court rejected that claim stating that employees were not barred from pursuing state law claims in court even if those claims could have been handled in the grievance process.  As the Minnesota Whistleblower Act is a state law, the employee had the right to pursue that claim in court. 

In order to establish a prima facie Whistleblower claim, the plaintiff must establish statutorily-protected conduct by the employee; adverse employment action by the employer; and a causal connection between the two.  One might think that filing a grievance over contract overtime would not constitute statutorily-protected conduct.  However, the court found that Moore’s whistleblower claim was based on a contract issue – or a “common law” violation.  In 2013, common law violations were added to the list of violations for which whistleblower protection applies.  Breach of contract is an action recognized by common law.  As such, the court allowed the grievance to be considered a protected action under the statute. 

Finally, the court determined it had “no difficulty concluding that, as a matter of law” that administrative leave could have constituted adverse employment action.  It found that the plain language used by the legislature, describing behavior that “might dissuade” the “reasonable employee” from filing a complaint suggested “an inclusive reach into a wide variety of unspecified employer behavior.”  This is the point at which the seven-month extension of administrative leave created a “bad facts, bad law” situation, as the court cited  this additional leave as its main reason for considering it to be and adverse action.  For this, and several other reasons, the court allowed Moore’s claim to proceed at District Court. 

Now, does this mean that every time an employer places its employee on administrative leave it is committing an adverse action?  No.  However, an employer must now be wary not to abuse the administrative leave action it takes against an employee.  Administrative leave is used in order to give an employer time to complete a certain objective: time to finish an investigation, time to evaluate an employee’s fitness for duty, or time to allow employees to cool off following a workplace dispute, among other legitimate reasons.  Once that objective is completed, the employer has to make a decision and end the administrative leave.  If it waits any longer than necessary, the leave could be considered to be punitive. 

Just when you thought you had something figured out, the courts throw a curve ball at you and make you reconsider everything.  If your organization needs help navigating tricky employee leave situations, contact the Wiley Law Office, for advice that works.