Private-sector whistleblowers in Connecticut will have broader whistleblower protections under state law than federal law after the Connecticut Supreme Court ruled in favor of a former UBS executive who alleged he was fired in retaliation for calling out fraudulent activity within the company.
The state’s Supreme Court justices ruled 7-0 that a 2006 U.S. Supreme Court ruling, which restricted First Amendment free speech protections for whistleblowers, does not apply to private-sector workers in Connecticut under Connecticut law.
Connecticut Supreme Court Justice Richard Palmer wrote in the court’s opinion that whistleblowers should “be protected from employer discipline to the greatest extent possible, consistent with the legitimate interests of the employer.”
The case centered on Richard Trusz, the head of valuations at UBS Realty Investors LLC, who alleged the Zurich, Switzerland-based global financial services firm fired him in August 2008 for complaining that its real estate unit was overvaluing real estate and mortgage investments, resulting in higher management fees and harming clients.
Mr. Trusz sued UBS in a federal court in New Haven, Conn., in 2009, alleging UBS fired him for voicing concerns over the real estate unit’s practices. The State Supreme Court got involved when the presiding judge sought clarity in Garcetti v Ceballos, a 2006 U.S. Supreme Court case that effectively narrowed whistleblower protections for public workers whose speech could be considered part of their official duties.
Under Connecticut law, “employee speech pursuant to official job duties on certain matters of significant public interest is protected from employer discipline,” Justice Palmer wrote.
Reuters observes that the State Court’s decision “could embolden whistleblowers in Connecticut, long a stronghold for insurers, and more recently a popular base for hedge funds and banks such as UBS and Royal Bank of Scotland Group Plc.”
A lawyer for Mr. Trusz told Reuters that the ruling is “the first case in which any state supreme court has flatly rejected Garcetti, as a matter of state constitutional law.”