Tough Luck for North Dakota Workers’ Comp Whistleblowers

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Former employees of North Dakota’s Workforce Safety and Insurance agency have struggled to pursue claims that they were illegally fired for spotlighting questionable activities at the agency.

A judge has thrown out most of the case filed by James Long, the agency’s former chief of support services, concluding that Long may sue WSI but not a group of executives and board members he claims plotted to fire him. Long’s lawsuit against the agency itself is continuing.

Kay Grinsteinner, the agency’s former internal auditor, and Todd Flanagan, a one-time WSI fraud investigator, both recently settled their lawsuits for $10,000 each, records show. The state has spent almost $56,000 defending the three cases, including the two $10,000 payments.

Tag Anderson, the director of North Dakota’s risk management division, said the settlements did not concede any wrongdoing. He described them as “very low offers” that Grinsteinner and Flanagan decided to accept.

The North Dakota Senate has rejected legislation sponsored by Sen. Tracy Potter, D-Bismarck, to let the state auditor investigate whistleblower claims by state workers. The bill also would have allowed the state labor commissioner to order the reinstatement of wronged employees.

North Dakota laws now prohibit public and private employers from retaliating against workers who report possible illegal activities. For public employees, the protection extends to reports of misuse of public resources.

But the dismissals of Long, Grinsteinner, Flanagan and Billi Peltz, WSI’s former human resources director have exposed North Dakota’s whistleblower protection law as worthless, said Long’s attorney, Tom Tuntland.

“The law is worse than a sham. It’s a trap,” Tuntland said. “It leads employees to believe they have protection when they have absolutely no protection …. Any public employee who blows the whistle on public wrongdoing is a fool.”

Long, Grinsteinner, Flanagan and Peltz had requested protection after Sandy Blunt, WSI’s former chief executive, returned in October 2007 from a six-month leave of absence. Blunt was put on leave after Burleigh County prosecutors filed charges against him.

Blunt was convicted of one felony, for misspending more than $10,000 of the agency’s money. He was sentenced to two years’ probation with community service.

North Dakota has two laws on reporting wrongdoing. One covers all employees and lets workers who believe they are wronged sue for damages. The second, which focuses on the rights of government workers, does not provide the option of suing.

Statee district judge Ronald Goodman, who is handling Long’s lawsuit, ruled that Long’s claims could go forward against WSI based on the more expansive whistleblower law but not under the public employees one.

“Just because the statutes prohibit this conduct does not mean that the statutes provide a damages remedy for the conduct,” Goodman wrote. Even if damages are appropriate, he wrote, “it is the duty of the Legislature, not the judiciary, to create the remedy.”