The United States Court of Appeals for the Eleventh Circuit, which governs Florida, recently found that Florida's Whistleblower Statute is preempted by the National Bank Act.
The Plaintiff in this matter was a former vice-president of U.S. Bank (a federally chartered bank). Plaintiff had alleged that the bank violated a particular federal statute governing banking practices. And, after the Plaintiff objected to this practice, he claimed that he was fired in retaliation. The Plaintiff brought his claim pursuant to the Florida Whistleblower Act. U.S. Bank defended by, in part, pointing to a federal statute applicable to federally chartered banks that allowed a bank to dismiss its officers "at pleasure."
Specifically, the bank argued that the federal statute that allowed the dismissal of the officer preempted the Florida Whistleblower Act which would have limited the bank's ability to terminate Plaintiff's employment. The Federal district court agreed as did a split Eleventh Circuit.
"Preemption" means that under the Supremacy Clause of the United States Constitution, a state law that conflicts with federal law is without effect. Federal law preempts state law when there is a significant conflict between federal and state law. The relevant federal statute here allowed a federally-chartered bank to "dismiss such officers or any of them at pleasure." See 12 U.S.C. § 24. The Court concluded that the Florida Whistleblower Act, which would have placed limits on the ability of a federally-chartered bank to terminate one of its officers, conflicted with federal law because it would have limited the freedom of action allowed to federally-chartered banks by federal law.
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