Labor & Employment Law Daily Despite poor performance, employee fired two months after whistleblowing has retaliation claim revived
Monday, September 16, 2019

Despite poor performance, employee fired two months after whistleblowing has retaliation claim revived

By Wayne D. Garris Jr., J.D.

The employee, who was responsible for managing maintenance contracts with the government, reported that his employer charged the government for work that had not been completed and provided false information about its employees with disabilities.

Reversing the district court’s grant of summary judgment, the Fifth Circuit held that an operations manager for a maintenance company who was terminated two months after his employer became aware of his whistleblowing activity raised genuine issues of fact regarding his termination. Even though the employee concededly had performance issues, including failing to properly manage government contracts, which were worthy of termination, his employer knew of his deficiencies for several years without terminating him. The employer’s failure to discipline another operations manager who had the same performance issues as the employee suggested that the employee’s whistleblowing may have been the real reason for his termination (Garcia v. Professional Contract Services, Inc., September 11, 2019, Elrod, J.).

Disabled employees. The employee worked as a senior operations manager for a nonprofit company that provides maintenance services on government-owned properties; it hires individuals who are “severely disabled” under the Javits-Wagner-O’Day Act, which provides employment opportunities for people with disabilities by promoting their access to federal contracts. As operations manager, he was responsible for ensuring that the employer was complying with its government contracts.

Performance issues. In March 2013, the employer discovered that a border patrol facility under its contract had not been serviced in two years, even though the employer had been billing the government for work at the facility. Concluding that the employee did not properly manage the location, the employer issued him a final written warning, but he contended that a supervisor told him the border patrol asked that they discontinue work at the facility and took back the employer’s key to the facility. Two months later, the employer discovered that the employee failed to service two more locations in El Paso and terminated his employment.

Whistleblowing. But the employee claimed that the employer knew about his performance issues for years and was really firing him because of his whistleblowing activity. Beginning in 2011, he reported to his employer that it was billing the government for cleaning parking lots at a border patrol facility but that the work wasn’t being performed. His employer ignored him, he said, so he reported the information, via e-mail, to the CFO of a nonprofit agency that assists the government in administering contracts, and also forwarded his email to the general counsels of the employer and the nonprofit.

Allegations of misconduct. The employee alleged that his supervisor refused to report the issue to management or the government; the employer was using contract managers to perform work in violation of the Javits-Wagner-O’Day Act; landscapers on other projects worked overtime, but the employer paid them as subcontractors instead of employees in order to avoid paying overtime wages; the employer was certifying employees as disabled who were not disabled; and the employer was sending its employees to specific doctors in Mexico in order to manipulate the employer’s disability numbers to get to the 75 percent disability threshold required by the Javits-Wagner-O’Day Act.

Causation. After the employee filed suit alleging retaliation in violation of the False Claims Act, the district court granted summary judgment for the employer. On appeal, the employee argued that the district court applied the wrong standard of causation when determining whether he made a prima facie case of retaliation. Although he Supreme Court held in University of Texas Southwestern Medical Center v. Nassar that a plaintiff in a retaliation claim must prove that protected activity is the but-for cause of the adverse action, it did not specify whether the but-for standard only applies at the pretext stage or at the prima facie stage. The employee argued that the but-for standard only applies at the pretext stage.

Circuit split. There is a circuit split on this question. The Fifth Circuit said that it has held, before and after Nassar, that only a showing of a causal connection is required at the prima facie stage, and a plaintiff can establish the causal connection by pointing to the close timing between the protected activity and adverse action. The court expressed surprise that the employer would rely on dicta in an unpublished decision to support its argument while ignoring Fifth Circuit precedent.

Causal connection exists. The employee established a causal connection between the protected activity and the adverse action, the appeals court concluded. While the Fifth Circuit has held that four months is sufficient to show a causal connection, yet, the Supreme Court in Clark Cty. Sch. Dist. v. Breeden approvingly cited a case that held that three months was insufficient to show causation, under either standard, the employee’s two-and-a-half-month period between the protected activity and adverse action was sufficient to establish causation.

Pretext. Although pretext was a closer question, the appeals court ultimately held that a genuine issue of fact existed as to whether the employer’s stated reason for terminating the employee was pretextual. The employee needed more than just temporal proximity to support his retaliation claim. Here, he had evidence that a similarly situated employee was not terminated for similar conduct; that his supervisor harassed him after the employer learned of his whistleblowing activity; that the employer knew for years prior to his termination that he had issues with managing the contracts assigned to him; and that the employer could have lost millions of dollars if its misconduct was discovered.

Comparators. The employer had argued, and the district court agreed, that the employee’s alleged comparator was not similarly situated because he worked in a different division within the company than the employee. But the appeals court disagreed, finding that its precedent doesn’t hold that a difference in work division alone renders two employees as not similarly situated but is one factor to be considered. In this case, the comparator was also an operations manager and was responsible for overseeing contracts, like the employee. The employee and the comparator reported to the same managers and had a similar history of work violations, but the comparator was not terminated.

Admissions. Finally, the employer argues that the employee did not dispute the facts leading to his termination because he admitted to his contract management errors and conceded that termination was appropriate. The court disagreed, noting that the employee never conceded that he was fired because of his mistakes and argued that the employer continued to employ him, despite his mistakes, until he engaged in protected activity.

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