The district court granted the defendant’s motion of judgment as a matter of law on the plaintiff’s claims of retaliation for protected conduct under the False Claims Act, Defense Contractor Whistleblower Protection Act, and California Labor Code, finding that the plaintiff’s activity involved a minor internal issue that was not covered by any of the statutes. The court also found that the plaintiff failed to allege fraud or any violation of a law or regulation, and that his communications to his supervisor did not suggest that any law had been broken or that he engaged in any protected whistleblower activity. Because the plaintiff had not engaged in protected activity, the defendant was not on notice of such activity, and therefore any adverse employment decisions were not the result of retaliation.
The case
David Lillie sued his former employer, ManTech International Corp., alleging the company retaliated against him by terminating his employment after he reported that he had received allegedly-unauthorized access to “classified/proprietary” information owned by a third-party government contractor. Lillie alleged claims for retaliation in violation of the False Claims Act, Defense Contractor Whistleblower Protection Act, and California Labor Code.
A jury found for plaintiff with respect to all of his claims and awarded plaintiff $1,505,561 in total damages. ManTech moved for summary judgment, or alternatively, for a new trial. The plaintiff moved for two times back pay and interest and attorneys’ fees.
Lillie had been employed by ManTech to provide reliability engineering support services to the Jet Propulsion Laboratory, a federally-funded research and development center under NASA. Between October 2014 and December 2014, Lillie was furloughed twice and was later terminated in February 2015, after declining to be reclassified as a part time employee. While Lillie was originally designated as eligible for rehire, he was later deemed ineligible.
The parties disputed the reason Lillie was furloughed and ultimately terminated. ManTech asserted he was terminated due to a lack of funding, but Lillie contended he was unlawfully terminated in retaliation for his disclosing that he was provided unauthorized access to certain proprietary files, which he maintained were the property of Lockheed Martin.
In brief, Lillie had been given access to certain Lockheed documents that he needed to prepare an extreme-value analysis of the electronics used in a spacecraft to ensure that the spacecraft would not be damaged in any way. Though Lockheed declined to provide the documents to ManTech, they were later uploaded to an internal server for Lillie’s use. Lillie testified that he was later asked to delete all references to the files from his work product, which he declined to do. Lillie believed coworkers were attempting to conceal who accessed and used the files, though his name remained as the author of the work product.
Lillie contacted JPL’s ethics office to discuss the issue, concluding that he should not have had access to the files. However, the office did not conduct an investigation. Lillie also informed his supervisor of the issue. Within 10 days, Lillie was furloughed, due to lack of funding. He returned to work on November 11, but was furloughed again on December 19. At the end of the 30-day furlough period, Lillie was offered part-time or on-call employment, but declined. His employment was then terminated. Though ManTech blamed funding problems, Lillie testified that other employees indicated work was available on various projects. The jury found in favor of Lillie and awarded him back pay, lost future earnings, and some punitive damages.
ManTech filed a motion for judgment as a matter of law, or alternatively, for a new trial. The defendant argued that Lillie’s inquiry to JPL involved at most a possible breach of a non-disclosure agreement and that he did not report any concerns about fraud on the government. According to ManTech, Lillie lacked a subjective belief that he was engaged in protected activity, as contemplated by the FCA, and that no reasonable employee could have objectively believed that ManTech was committing fraud against the government. ManTech also argued that nothing in the record would have put it on notice that anyone was investigating potential fraud.
The court examined whether Lillie engaged in protected activity as contemplated by the FCA. While Lillie expressed his concerns to the JPL ethics office, his supervisor, and his local congressional representative’s office, his allegations did not suggest ManTech engaged in fraud. In addition, Lillie testified he reported the incident because he feared for his security clearance and because he believed it was required by his job. Importantly, the court noted that reports of compliance concerns are not protected by the FCA. However, the court reasoned that the repeated reports to various authorities and the plaintiff’s characterization that the incident was an alleged “government coverup” suggested that Lillie believed in good faith that ManTech was possibly committing some kind of fraud against the government. The court found that legally sufficient to satisfy one prong of the test for determining whether the plaintiff engaged in protected activity.
However, the court found the allegations failed the objectivity prong of the test. The court explained that the mere receipt of federal funds does not transform any potential regulatory or contractual violation into an FCA claim. While the plaintiff may have believed he was investigating an FCA claim, the court found little support in the record, and concluded that a reasonable jury would not have found that unauthorized access to a competitor’s proprietary files had the result of defrauding the government or creating a coverup. Even treating the evidence in the light most favorable to the plaintiff, the court found no nexus between his access to the files and ManTech’s receipt of payment from the government.
Similarly, the court found the evidence did not support a finding that ManTech had notice the plaintiff engaged in protected activity. Previous courts have held this standard is not met when a plaintiff indicates they are reporting an error or some form of noncompliance, without raising allegations of fraud. While the plaintiff could have notified his supervisor of his alleged protected activity, the supervisor learned of Lillie’s contact with his local congressional office only after the termination. Further, Lillie’s email to his supervisor said the files might be proprietary, or might not. Lillie also signed the work product because he believed his concerns had been addressed, and did not raise his additional concerns until after his final furlough prior to termination. Those concerns were not brought to ManTech until after the termination. Accordingly, the court held that ManTech was not on notice of the alleged protected behavior.
Because the court held that the defendant was not on notice of the protected activity, it concluded it need not examine whether ManTech discriminated against Lillie because of the activity.
Because the plaintiff failed to produce evidence he engaged in protected activity, other than his own belief, the court granted the defendant’s motion for judgment on the FCA claim.
Next, the court turned to the defendant’s motion regarding the DCWPA claim, noting that the act’s definition of protected activity is broader than under the FCA, because the DCWPA protects disclosures of five types of misconduct. Further, under the DCWPA, the protected activity must only be a contributing factor, a lower test than the “but for” standard under the FCA.
ManTech argued that none of Lillie’s complaints were protected disclosures of covered misconduct. Under the DCWPA, protected activity covers the disclosure of a gross waste of funds, substantial and specific danger to public health or safety, gross mismanagement or abuse of authority, or a violation of a law, rule, or regulation. The court found the plaintiff’s evidence failed to demonstrated his activity fell under any of these areas.
While the plaintiff argued that he had informed his supervisor that JPL had unlawfully provided him with access to proprietary files and was attempting to cover this up, the court found this assertion undermined by the evidence. The plaintiff’s internal communications did not mention suspected illegality and in fact indicated the files might not be proprietary. At most, the plaintiff’s disclosures suggested a violation of the contractual agreement with Lockheed Martin. Likewise, the court held the defendant did not have notice Lillie engaged in protected activity. Accordingly, the court granted ManTech’s motion for judgment on the claim under the DCWPA.
Finally, the court considered the claim under the California Labor Code, which states that an employer shall not retaliate against an employee for disclosing information that discloses a violation of state or federal statute, or a violation of or noncompliance with a local, state, or federal rule or regulation. However, the law again requires the plaintiff to show he engaged in protected activity, that his employer subjected him to an adverse employment decision, and that there was a link between the two.
ManTech argued that Lillie had not made any disclosure regarding an alleged violation of state or federal law. However, the court noted that other courts have not required a plaintiff to specifically identify a state or federal statute, where they had a reasonable belief that the conduct they reported was unlawful. Nonetheless, as above, the court found the plaintiff failed to make his case, and granted the defendant’s motion on this claim.
The court also conditionally granted the motion for a new trial, should the Court of Appeals find that judgment as a matter of law was not appropriate.
