Several current and former D.C. police officers who say they were punished for exposing wrongdoing have lost their court case against the District, a ruling simultaneously hailed by the city as a check on frivolous lawsuits and condemned by watchdog groups as a new burden for whistleblowers.

The head of the police labor union, which backed the litigation, said Thursday’s decision by the D.C. Court of Appeals imposes nearly impossible-to-meet standards on municipal workers who want to report waste, fraud and abuse.

“This is a huge victory for government corruption,” said Kristopher Baumann, president of the Fraternal Order of Police Lodge 1. “This is why no one speaks up. If you come forward, you will be crushed. It puts a muzzle on everyone.”

But Police Chief Cathy L. Lanier and D.C. Attorney General Irvin B. Nathan praised the ruling. Lanier called the lawsuit one “with no merit,” and Nathan said the litigation was a “patent misuse” of the whistleblower statute that “required a great expenditure of city resources.”

Thursday’s ruling resolves a $15 million lawsuit filed seven years ago over the propriety of the Police Department’s “reimbursable details” — the way the agency contracts with stores, bars and neighborhood groups to provide uniformed officers for extra-duty security on overtime. The city and the retailers split the salary costs.

The officers in the suit complained that the department shoved them aside in 2004 and strong-armed the management of the new Gallery Place mall to sign on to the program.

After the union sent Lanier a letter alleging their mistreatment and comparing the program to a government-run protection racket, one officer was fired and others were suspended.

The department argued that the officers had previously worked improper overtime shifts and that one was acting as a “broker,” violating department rules by recruiting other officers for overtime jobs and claiming a commission from them.

The officers argued they were disciplined for complaining, noting that the police chief signed off on the final internal investigative report the same day the union attorney sent a letter to the department describing their allegations. One officer had taken his complaint public on a TV newscast.

In Thursday’s ruling, the court said the officers’ claim was not based on credible information and was legally wrong. The court also said the officers had no proof they were disciplined for alleging misconduct.

The judges ruled that the whistleblower law “is not a lottery scheme under which would-be whistleblowers receive protection for making unsupported accusations if they happen to be lucky and, for reasons unknown to them, the accusations turn out to be supportable after all.”

“Rumor and suspicion do not provide an objectively reasonable foundation for an accusation of illegal government conduct,” the judges continued in their 49-page ruling.

The appeals court upheld the decision by a D.C. Superior Court judge to throw out five of the officers’ lawsuits. The judges upheld jury verdicts against Martin Freeman and Duane Fowler and vacated $12,000 in back pay the jury had awarded to Sean McLaughlin.

The judges ruled that in McLaughlin’s case, the jury had only his “assertion that an unidentified source of unknown reliability told him about the alleged misconduct.”

The court also said the union cannot recoup $430,000 in attorney fees from the city. Freeman and Fowler are no longer with the department; McLaughlin is still on the force.

Their attorney declined to comment.

Mara Verheyden-Hilliard, executive director of the Partnership for Civil Justice Fund, which has brought numerous lawsuits against D.C. police, said the decision “creates a very high bar for employees who see and report waste. . . . I’m concerned that the Office of the Attorney General, the police and the executive branch will use this opinion to stifle employees.”

But Nathan, in a statement, said the ruling merely clarifies the law and will not restrict D.C. workers from raising what he called genuine complaints of corruption through proper channels.

“The whistleblower law should not be interpreted to protect employees whose disclosures are based entirely on unsubstantiated rumor, innuendo, or sheer imagination,” Nathan said.

“Under the Court’s ruling, there is no reason legitimate whistleblowers who reasonably believe what they claim actually happened can’t come forward,” Nathan said.

In 2005, then-D.C. Council member Vincent C. Gray (D) wrote to Charles H. Ramsey, then the city’s police chief, raising questions about the city’s investigation into Freeman’s claims. Gray, who is now mayor and oversees both Lanier and Nathan, called the investigation into Freeman unfair in a July 2005 letter.

Freeman, who had previously been decorated for shooting two armed men during a robbery at a store where he had been working an off-duty overtime shift, was fired in September 2005. Two other officers were each suspended 25 days.

Gray spokesman Pedro Ribeiro said Friday that the mayor had “one set of facts” in 2005 and he described the letter as seeking clarification on behalf of a constituent.

“In the subsequent seven years, the mayor has received such clarification and he’s pleased with the ruling,” he said.