Appeal of the district court’s dismissal of a suit alleging retaliation is granted, where the plaintiff’s actions were intended to help her employer avoid submitting false certifications and false claims for payment, which the appeals court explained is also considered protected activity. The appeals court also found the activity was outside the plaintiff’s regular job responsibilities, as she was not responsible for ensuring compliance with grant funding requirements or for communicating potential noncompliance to the funding agency, and therefore her actions were protected. The court found the defendant was on notice of the activity, because the plaintiff specifically raised the issue of noncompliance and the potential for false certifications and claims to her direct superior and other officials. The court also found that the timing of events—the protected activity, a public excoriation by the plaintiff’s supervisor, and the adverse employment action—supported the allegation that the plaintiff’s termination was retaliation. The appeals court also explained that the complaint did not need to meet Rule 9(b)’s heightened pleading standard for fraud claims, because the rule applies to qui tam actions, not to retaliation claims, because such claims do not themselves assert or seek to prove actual fraud.
Sylvia Singletary appealed a lower court’s dismissal of her lawsuit alleging Howard University terminated her employment in retaliation for her airing of False Claims Act violations.
Singletary alleged the university fired her for objecting to its failure to maintain the humane laboratory animal living conditions on which its receipt of federal funding was conditioned. As a recipient of federal funding for research activities involving animals, Howard University is subject to the Animal Welfare Act and the Health Research Extension Act, and their accompanying regulations, which together require facilities to have an internal compliance infrastructure to enforce the animal-care standards. The laws also provide the National Institutes of Health the authority to rescind funding due to repeated violations. Dr. Singletary was employed as the attending veterinarian, responsible for general veterinary care and oversight of other aspects of animal handling and care. In this role, Singletary also was a member of the University’s Animal Care and Use Committee, a required compliance mechanism.
According to Singletary, between Summer 2013 and Spring 2014, she repeatedly warned her direct supervisor that the air temperature in the laboratory animals’ living quarters was too high. She explained that the conditions, which were caused by equipment failures, were not in compliance with NIH standards and violated the terms and conditions of the University’s NIH grants. However, no action was taken. Singletary took her concerns to other officials, but again on actions were taken. During the period Singletary raised her concerns, the university made certifications to NIH and other agencies that it complied with regulations for adequate animal care.
In April 2014, Singletary discovered that some laboratory animals had died of heat exhaustion. She emailed her concerns directly to NIH, explaining that the laboratory lacked adequate air conditioning for the animals. NIH directed Singletary’s supervisor to submit a corrective action plan and the issue was finally addressed. Soon after, Singletary’s supervisor “excoriated” her during a faculty meeting and her employment contract was cut short by six months. In response, Singletary resigned and later filed suit against the university, alleging retaliation for protected activity.
The district court dismissed the complaint, finding that her complaints about animal mistreatment were not protected activity because they were part of her role as attending veterinarian. The court also denied her motion to amend her complaint, concluding it was futile.
The appeals court concluded the district court erred in its ruling, finding that Singletary plausibly alleged that she engaged in protected activity and that the University retaliated against her because of that activity. The court noted the FCA protects activity taken prior to a proceeding, and also lawful act taken to stop FCA violations. According to the court, this second prong is met as long as the employee has an objectively reasonable belief that the employer is violating, or will violate, the False Claims Act.
First, the court found no dispute that Singletary’s actions protesting the laboratory conditions and informing NIH of the violations were lawful. The court also found her actions were taken to try to prevent what she reasonably believed would be the presentation of false claims by the University. Singletary repeatedly warned the university that conditions in the lab did not meet NIH standards, compliance with which was a condition of the grant. Singletary also had a reasonable belief that the university would not report the issue to NIH and would be at risk of submitting a false certification of compliance with NIH standards. Because those certifications were required for the university to continue to receive funding, she had a reasonable belief that the university could submit a false claim for payment.
Third, the court noted that Singletary took action that matched her verbal protests by filing complaints in which she warned that the university was at risk of violating the terms of its grant and asked officials to take action to head off any false claim. She even tried to bring the University into at least partial compliance with the law by directly reporting to the NIH the animal deaths and the overheated conditions that caused them.
While Singletary’s communications within Howard and her email to NIH did not accuse the university of fraud, the court found that beside the point. The court explained that the relevant standard is whether Singletary’s proposed complaint plausibly alleged an objectively reasonable factual basis for the belief that her email was an effort (i) to correct or counteract false submissions that had previously been made or (ii) to provide the NIH the information needed to enforce its animal-welfare requirements before any more funding was granted.
The appeals court held the district erred in multiple areas in this aspect of the dismissal. First, the district court defined protected activity as requiring the plaintiff to have investigated matters that reasonably could lead to a viable FCA case. However, that standard does not apply to activity intended to prevent or abate violations. Second, the district court wrongly required Singletary to allege that her efforts were outside the scope of her responsibilities as attending veterinarian. The appeals court explained that factor pertained only the causal inquiry, which asks whether the university was on notice of her protected activity.
Next, the appeals court examined whether the plaintiff plausibly alleged that the university knew she engaged in protected activity, that qualifying retaliatory employment action occurred, and that the retaliation was connected to her protected activity. The court found she had. Within weeks of Singletary’s email to NIH, the university cut short her appointment.
The university argued that Singletary left voluntarily, but the court rejected this assertion, first noting there was nothing voluntary about her departure. She left only after being told her employment would terminate at the end of the year. Further, Singletary’s appointment was potentially “evergreen,” meaning that absent the discharge, she could have been retained in the position of attending veterinarian beyond the expiration of her current contract. Further, the court noted that the mere notice of termination is a cognizable adverse employment action, because wrongful discharge claims accrue, and limitation periods begin to run, at the time the employer notifies the employee that she is fired, not later on the last day of her employment. So, the court held the retaliatory action occurred on the date Singletary was informed she would be terminated.
The court also found Singletary plausibly alleged she was fired because of her protected activity. The proposed complaint plausibly showed both that the university was aware of Singletary’s protected activities and that those activities motivated her discharge. In this case, the plaintiff repeatedly urged her superiors to correct conditions in the lab and specifically stated that failing to do so would violate funding requirements. She also raised the specter of potential false certifications and claims for payment.
The university argued that Singletary was just doing her job, and therefore it lacked notice that she engaged in protected activity, but the court disagreed, noting that she specifically noted the university was out of compliance with its funding requirements. The court found that policing compliance with grant conditions was not one of Singletary’s responsibilities, and that she went outside her chain of command to raise her concerns when they were not addressed by her direct supervisor, and then to NIH. The court found that none of these activities were part of Singletary’s regular job responsibilities. In fact, her email to NIH was the only communication she had with the agency during her 20 months of employment. Further, that email too served to put the university on notice that she engaged in protected activity. Finally, the court reasoned that if Singletary’s actions were part of her job, there would have been no need for her supervisor to excoriate her at a faculty meeting or to claim she lacked professionalism and integrity.
While the university could have viewed the plaintiff’s complaints as general dissatisfaction about regulatory compliance, not as efforts to prevent fraud, the court explained that the question at the pleading stage is not whether the facts could be read differently than the plaintiff does. Instead, all reasonable inferences are made to the plaintiff’s benefit. The complaint need not conclusively foreclose any alternative. The court found Singletary’s allegations at least as plausible as the university’s assertion that it did not know she engaged in protected activity. Further, the court again noted that Singletary’s communications went beyond general complaints about lab conditions, but warned of the repercussions of noncompliance.
The court also found that the timing of Singletary’s notice to NIH, her supervisor’s public reaction, and her notice of termination supported the allegation that the negative employment action was taken in retaliation.
Finally, the district court suggested that, even assuming Singletary’s allegations were sufficient, the proposed complaint might still fall short of Rule 9(b)’s heightened pleading standard for fraud claims. The appeals court found this incorrect, noting that Rule 9(b) applies to qui tam actions, not to retaliation claims, because such claims do not themselves assert or seek to prove actual fraud.
