Background
Steven Herbert served as chief investment officer for the Kentucky Public Pensions Authority, overseeing approximately $20 billion in retirement-system investments, until KPPA terminated him without cause in May 2022. He sued under the Kentucky Whistleblower Act, alleging retaliation for raising concerns about Perimeter Park West, a real-estate holding company associated with the retirement systems, and about KPPA’s longstanding practice of routing contributions and expenses through accounts at JPMorgan Chase rather than directly through its BNY Mellon trust account.
Herbert’s October 2021 Cash Flow Memo asserted that the Chase-account process violated Kentucky statutes and evaded board oversight. The Franklin Circuit Court granted KPPA summary judgment, finding that Herbert had not disclosed concealed or previously unknown wrongdoing, had not reported actionable information to an appropriate authority, and had not shown that protected activity contributed to his termination. It also denied his motion seeking consideration under seal of emails involving KPPA’s general counsel. Herbert appealed, but did not meaningfully pursue his Perimeter Park West theory, leaving the Cash Flow Memo as the principal issue.
The Court’s Holding
The Kentucky Court of Appeals affirmed. It held that Herbert’s Cash Flow Memo and related communications were not protected disclosures under the Kentucky Whistleblower Act because the use and balances of the Chase accounts had been publicly reported and widely known within KPPA for decades. Relying on Kentucky precedent concerning challenges to publicly known governmental policies, the court explained that an employee does not make a protected whistleblower disclosure merely by asserting that an already public policy violates state law.
The court further held that any error in the circuit court’s treatment of whether Herbert reported to an “appropriate body or authority” was harmless because the public nature of the information independently defeated his claim. Herbert’s challenge concerning the sealed emails also provided no basis for reversal: he did not address the attorney-client privilege rationale for excluding them, and even his characterization of the emails would not show that he disclosed concealed or nonpublic information. Because no protected disclosure occurred, the court declined to decide whether Herbert’s communications contributed to his termination.
Key Takeaways
- The Kentucky Whistleblower Act protects disclosures of concealed or not generally known wrongdoing, not objections to the legality of a publicly known government policy.
- A court may affirm summary judgment without resolving causation when the employee cannot establish that the underlying communication was a protected disclosure.
- Evidence bearing on whether an employee’s legal interpretation was correct does not cure the failure to disclose previously unknown information, and an appellate brief must directly challenge the grounds supporting an evidentiary ruling.
Why It Matters
The unpublished opinion reinforces a threshold limitation on Kentucky public-employee whistleblower claims: identifying a possible legal defect in an established and publicly documented agency practice is not enough. The employee must bring forward facts or information exposing wrongdoing that was concealed or not generally known.
The decision also illustrates the importance of preserving each appellate issue. Herbert’s failure to pursue the Perimeter Park West theory and to confront the attorney-client privilege basis for excluding the emails left the court with no developed basis to reverse those portions of the circuit court’s ruling.