Government Contracts Fourth Circuit: Whistleblower Successfully Pleaded Retaliation Claim
Monday, February 4, 2019

Fourth Circuit: Whistleblower Successfully Pleaded Retaliation Claim

By Government Contracts Editorial Staff

The dismissal of a False Claims Act retaliation claim was reversed and remanded because, according to the Court of Appeals for the Fourth Circuit, the relator sufficiently alleged he was engaged in protected activity. The relator, a former contractor employee, alleged the contractor terminated his employment in retaliation for raising concerns about the contractor’s failure to properly maintain aircraft engines. According to the relator, the contractor “pencil whipped” repairs by certifying inadequate and incomplete repairs as completed, and it failed to use calibrated and certified tools to make repairs. To sufficiently plead a retaliation claim under 31 USC 3730(h)(1), a relator must allege facts sufficient to support a reasonable inference he engaged in protected activity, his employer knew about the protected activity, and his employer took adverse action against him as a result. Applying the “distinct possibility” standard, the district court found the relator had not sufficiently alleged that he engaged in protected activity (61 CCF ¶81,233).

Objectively Reasonable Belief. The Fourth Circuit found the distinct possibility standard did not apply to the category of protected activity consisting of “other efforts to stop 1 or more violations of [the FCA]” (§3730(h)(1)). The court adopted the objective reasonableness standard for this category of protected activity. Under this standard, the relator sufficiently alleged he was engaged in protected activity where he had an objectively reasonable belief that the contractor was violating the FCA and that his actions were designed to stop at least one FCA violation. The relator’s complaints to management—in person and in writing—about the contractor’s pencil whipping and failure to use proper tools alleged specific illegal, fraudulent conduct against the government. The relator raised concerns about the contractor’s practice of coercing investigators to falsify engine repairs in an e-mail that included supporting documents, which supported a finding the relator engaged in “efforts to stop” a potential FCA violation.

Knowledge and Adverse Action. Addressing the second and third elements of an FCA retaliation claim, the court found the relator sufficiently pleaded the contractor knew about his protected activity. The relator complained to management on numerous occasion in person and in writing about the contractor’s allegedly fraudulent conduct, and some of his complaints triggered an investigation into whether “the machine shop was operating faulty equipment and failing to train employees.” In addition, the timeline of alleged events supported a reasonable inference the contractor terminated the relator because he engaged in protected activity. The relator was escorted out of the building after he was observed taking pictures presumably to further his complaints, and he was informed of his termination the day after he wrote an email to the managing director of maintenance about how the contractor’s fraudulent conduct could “result in catastrophic failure to an engine.” (U.S. ex rel. Grant v. United Airlines, Inc., CA-4, 63 CCF ¶81,555).

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