The asymmetric law that just left a Hawai'i employer holding most of its legal bill
Hawai'i employers can't recoup full legal costs after beating a whistleblower lawsuit – even on a clean trial win – after a state appeals ruling.
On May 27, 2026, the Intermediate Court of Appeals of the State of Hawai'i vacated a $180,583.50 attorneys' fees award that Hawaii Pacific University had won after defeating a former professor's combined contract and whistleblower lawsuit. The court held that the trial judge had stretched the fee cap beyond what the statute allowed, and had effectively shifted fees onto a plaintiff under the Hawai'i Whistleblower Protection Act when only plaintiffs can recover fees under that law.
The dispute began in January 2014, when HPU professor Gordon Knowles's supervisor, Dr. Carlos Suarez, learned Knowles was also teaching at the University of Hawai'i and Honolulu Community College. According to the decision, that violated HPU's Conflict of Interest Policy. Knowles pushed back, telling his supervisor he was being unfairly targeted and that HPU only found out because someone was stalking him. HPU said it had simply reviewed course offerings from other schools.
Even so, HPU offered him a five-year faculty contract that June, running from August 2014 through August 2019. The relationship soured fast. Knowles tried twice to get restraining orders against HPU faculty and officials over his stalking allegations. Both were denied. An internal HPU investigation concluded the stalking claims were unfounded. He missed three meetings scheduled to address his allegations and his policy noncompliance, ended up on unpaid administrative leave, and was fired on June 19, 2015.
Knowles sued in federal court in December 2016, alleging Title VII retaliation, an HWPA violation, and breach of contract. The federal court granted HPU summary judgment on the Title VII claim and dismissed the rest without prejudice. He refiled the contract and whistleblower claims in state court in August 2018. After a bench trial in October 2023, the Circuit Court ruled for HPU on every count.
That is when the fee fight started. HPU asked for $258,818.22 under Hawai'i Revised Statutes § 607-14, which caps fee awards in contract-type cases – what Hawai'i law still calls actions in assumpsit – at 25% of the amount sued for. The Circuit Court awarded $180,583.50, finding the contract and whistleblower claims were too intertwined to apportion between them.
The appeals court took apart how the cap was calculated. Two problems drove the reversal.
The trial court had pegged the cap to a damages number Knowles cited years earlier in a federal interrogatory – roughly $930,000 in projected lost future salary plus a $114,619.16 401(k) cash-out. The appeals court said that was the wrong yardstick. The cap should track the amount sued for in this case, on the contract claim – which was $213,099 in Knowles's proposed Findings of Fact and Conclusions of Law.
The bigger point – and the one HR leaders should sit with – is about the whistleblower statute. The HWPA, the court emphasized, is a remedial law. It exists to encourage employees to report suspected violations of the law. It allows fee recovery only for plaintiffs. There is no mirror provision for employer defendants. Letting an employer collect fees beyond the contract cap, just because the plaintiff also brought an HWPA claim, would chill whistleblowing and gut the law's protective purpose for employees who report suspected legal violations and face retaliation, the court said, drawing on the statute's 1987 legislative history.
The result: the fee judgment is vacated. The case heads back to the Circuit Court to redo the math, this time using $213,099 as the base and 25% as the absolute ceiling – even though the trial court was right that the two claims were too entangled to apportion. The court also noted that the HWPA itself does not allow plaintiffs to recover future pay – a structural feature that shapes how damages get framed in these cases.
For HR leaders running employment risk in Hawai'i, the practical signal is sharp. Winning at trial does not unlock anything close to full fee recovery against a whistleblower plaintiff. The contract-side cap governs, and the whistleblower side delivers no fees to the employer regardless of how the case goes. When a complaint stacks an HWPA claim on top of a breach of contract claim, the employer's exposure stays mostly one-directional, even on a clean win. Litigation budgets need to reflect that asymmetry. So does the calculus on whether to push a case to trial versus resolve it earlier – particularly where the underlying conduct touches anything an employee could later frame as a report of suspected legal violations.
