ndilOn October 29, 2015, the Northern District of Illinois concluded that an employee who called police regarding suspected shoplifting—in violation of company policy—succeeded in proving a claim under the Illinois Whistleblower Act (IWA).  Coffey v. DSW Shoe Warehouse, Inc., No. 14-cv-4365.  The court granted the Plaintiff’s motion for summary judgment and denied the Defendant’s motion for summary judgment, rejecting the Defendant’s argument that the Act protects only employees who report their employer’s bad actions only—and not the actions of third-parties.

Background

Plaintiff was working as an Assistant Store Manager for the Defendant when she called police about suspected shoplifting.  The Company terminated her employment a few days later as it believed she violated its policy prohibiting employees in her position from calling police regarding suspected shoplifting.  The policy instead directed employees to use a variety of customer service techniques to prevent shoplifting, and to contact internal loss prevention managers if needed—but not to contact law enforcement or mall security guards when shoplifting was suspected.  Plaintiff filed suit alleging that her discharge violated the Illinois Whistleblower Act, 740 ILCS § 174/15.

The parties filed cross motions for summary judgment directed primarily at the legal issue of whether Plaintiff could state a claim under the IWA based on her report of wrongdoing by third-parties (i.e., the potential shoplifters).  The IWA prohibits an employer from “retaliat[ing] against an employee for disclosing information to a government or law enforcement agency, where the employee has reasonable cause to believe that the information discloses a violation of a State or federal law, rule or regulation.”  The court concluded that the Act was intended to protect whistleblowers who alerted authorities regarding wrong-doing of third parties, not just the employer’s wrong-doing.

Implications

Employers with Illinois operations should consider revisiting policies related to employees’ contacts with law enforcement or other authorities in light of this decision.  Notably, this decision comes shortly after a California Appellate Court reached a similar conclusion.

 

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Photo of Steven J. Pearlman Steven J. Pearlman

Steven J. Pearlman is a partner in the Labor & Employment Law Department, where he is Head of the Restrictive Covenants, Trade Secrets & Unfair Competition Group and Co-Head of the Whistleblowing & Retaliation Group.

Employment, Whistleblower, Restrictive Covenant and Trade Secret Practice.

Steven J. Pearlman is a partner in the Labor & Employment Law Department, where he is Head of the Restrictive Covenants, Trade Secrets & Unfair Competition Group and Co-Head of the Whistleblowing & Retaliation Group.

Employment, Whistleblower, Restrictive Covenant and Trade Secret Practice. Steven’s national practice focuses on defending companies in federal and state courts and arbitration against claims of: discrimination, retaliation and harassment, including claims brought by high-level executives; whistleblower retaliation; restrictive covenant violations; theft of trade secrets; and wage-and-hour violations (including class, collective and PAGA actions).

Illustrating his versatility, Steven has successfully handled bench and jury trials in multiple jurisdictions (e.g., Illinois, California, Florida and Texas); defended one of the largest Illinois-only class actions in the history of the federal courts in Chicago; and prevailed following his oral arguments before the Seventh Circuit and state appellate courts. Steven brings his litigation experience to bear in counseling clients to minimize risk and avoid or prepare for success in litigation.

Investigations. Reporting to boards of directors, their audit committees, CEOs and in-house counsel, Steven conducts sensitive investigations and has testified in federal court. His investigations have involved complaints of sexual harassment involving C-suite officers; systemic violations of employment laws and company policies; and fraud, compliance failures and unethical conduct.

Thought Leadership and Accolades. Steven was named Lawyer of the Year for Chicago Labor & Employment Litigation in the 2023 edition of The Best Lawyers in America. He was also named as One of the Top 10 Impactful Labor & Employment Lawyers in Illinois for 2023 by Business Today. He is a Fellow of the College of Labor and Employment Lawyers. Chambers describes Steven as an “outstanding lawyer” who is “very sharp and very responsive,” a “strong advocate,” and an “expert in his field.” Chambers also reports that “He is someone who can navigate the twists and turns of litigation without difficulty. Steven is great with brief-writing, crafting arguments, and making sure the client is always happy.”

Steven was 1 of 12 individuals selected by Compliance Week as a “Top Mind.” Earlier in his career, he was 1 of 5 U.S. lawyers selected by Law360 as a “Rising Star Under 40” in the area of employment law and 1 of “40 Illinois Attorneys Under Forty to Watch” selected by Law Bulletin Publishing Company. Steven is a Burton Award Winner (U.S. Library of Congress) for “Distinguished Legal Writing.”

Steven was appointed to Law360’s Employment Editorial Advisory Board and selected as a Contributor to Forbes.com. He has appeared on Bloomberg News (television and radio) and Yahoo! Finance, and is often quoted in leading publications such as The Wall Street Journal.

The U.S. Chamber of Commerce has engaged Steven to serve as lead counsel on amicus briefs to the U.S. Supreme Court and federal circuit courts of appeal. He was appointed to serve as a Special Assistant Attorney General for the State of Illinois in employment litigation matters. He has presented with the Solicitor of the DOL, the Acting Chair of the EEOC, an EEOC Commissioner, Legal Counsel to the EEOC, and heads of the SEC, CFTC and OSHA whistleblower programs. He is also a member of the Sedona Conference, focusing on trade secret matters.

In 2024, Steven received the Excellence in Pro Bono Service Award from the United States District Court for the Northern District of Illinois and the Chicago Chapter of the Federal Bar Association.