N.D. Illinois Dismisses Illinois Whistleblower Act Claim

N.D. Illinois Dismisses Illinois Whistleblower Act Claim

The U.S. District Court for the Northern District of Illinois recently granted a Rule 12(b)(1) and (6) motion to dismiss a former employee’s complaint alleging retaliation under the Illinois Whistleblower Act (“IWA”). Huang v. Fluidmesh Networks, LLC, No. 16-cv-9566 (N.D. Ill. July 18, 2017).

Background. Plaintiff was a Supply Chain and Manufacturing Manager for Defendant. He alleged that Defendant’s Chief Technology Officer (“CTO”) falsely told a third party that a publicly-traded client intended to purchase Defendant. Plaintiff alleged that because he thought this allegedly false information could impact the client’s stock price, he reported it to his direct supervisor, the CTO, and the CTO’s supervisor. Plaintiff claims that he told these individuals that the disclosure of the information was “illegal” and that he would report the violation to the appropriate authorities. Plaintiff’s employment was terminated subsequent to his internal reports and he alleged that he received no explanation as to the basis for the termination.

Ruling. Following his discharge, Plaintiff filed a complaint alleging that his employment was terminated in violation of the IWA. Defendant moved to dismiss the claim, arguing that Plaintiff failed to state a claim under the IWA, as he did not allege that: (1) he reported a violation externally (as required by 740 § ILCS 174/15(a) and (b)); (2) he refused to participate in illegal activity (as required by 740 ILCS § 174/20); (3) any of his allegations involved public corruption (as required by 740 ILCS § 174/20.1); or (4) he was threatened by his employer (as required by 740 ILCS § 174/20.2). The court agreed. The court also found that Plaintiff lacked standing to bring an IWA claim due to a “lack of any meaningful connection to Illinois,” as the only connection to the lawsuit to Illinois was that Defendant has its principal place of business in Illinois. But Plaintiff lived and worked in Taiwan and California and no one implicated by Plaintiff’s allegations lived or worked in Illinois.

Implications. This case shows that courts are apt to strictly apply the requirements of the IWA and will require a plaintiff alleging claims under Illinois state law to establish a clear nexus to Illinois.