Opinion
CAUSE NO. A-19-CV-0640-LY
2020-10-20
Laura WONDERCHECK, Plaintiff, v. MAXIM HEALTHCARE SERVICES, INC., Defendant.
Matthew Barton Caponi, Austin Harris Kaplan, Kaplan Law Firm PLLC, Austin, TX, for Plaintiff. Lindsay A. Hedrick, Victoria L. Bliss, Jones Day, Dallas, TX, for Defendant.
Matthew Barton Caponi, Austin Harris Kaplan, Kaplan Law Firm PLLC, Austin, TX, for Plaintiff.
Lindsay A. Hedrick, Victoria L. Bliss, Jones Day, Dallas, TX, for Defendant.
ORDER DENYING CROSS-MOTIONS FOR SUMMARY JUDGMENT AND RESETTING FINAL PRETRIAL CONFERENCE
LEE YEAKEL, UNITED STATES DISTRICT JUDGE
Before the court is Plaintiff Laura Wondercheck's complaint, which alleges that her former employer Defendant Maxim Healthcare Services, Inc. ("Maxim"), a federal contractor, wrongfully retaliated against her by terminating her employment after she made whistleblowing reports that her supervisor was committing fraud against the federal government. See 41 U.S.C. § 4712 (National Defense Authorization Act); 31 U.S.C. § 3730(h) (False Claims Act). Maxim answered and raised affirmative defenses. Wondercheck moves for a partial summary judgment on the issue of liability on both claims and Maxim moves for summary judgment as to the entire action. Background
The whistleblower protection provision of the National Defense Authorization Act is titled "Enhancement of contractor protection from reprisal for disclosure of certain information." 41 U.S.C. § 4712.
Before the court are Defendant Maxim Healthcare Services, Inc.'s Motion for Summary Judgment filed August 17, 2020 (Doc. #20), Wondercheck's Plaintiff's Response to Defendant's Motion for Summary Judgment filed August 31, 2020 (Doc. #22), and Defendant Maxim Healthcare Services, Inc.'s Reply in Support of Its Motion for Summary Judgment filed September 14, 2020 (Doc. # 25), Wondercheck's Plaintiff's Motion for Partial Summary Judgment filed August 17, 2020 (Doc. # 21), Defendant Maxim Healthcare Services, Inc.'s Response to Plaintiff's Motion for Partial Summary Judgment filed August 31, 2020 (Doc. #23), and Plaintiffs Reply to Defendant's Response to Plaintiff's Motion for Summary Judgment filed September 14, 2020 (Doc. # 24). On September 29, 2020, the court granted Maxim's unopposed request to supplement its summary proof and the supplement–completed certification pages or the signed errata sheets for deposition transcripts–was added to Clerk's Document No. 23.
In July 2015, Maxim hired Wondercheck to work as a pharmacy technician at the United States Immigration and Customs Enforcement Agency's ("ICE") South Texas Family Residential Facility in Dilley, Texas ("Dilley facility"). The Dilley facility, is a detainment center for undocumented immigrant women and children that provides, inter alia , medical services to those awaiting due process before immigration courts. Maxim, a for-profit company, contracted with ICE to provide on-site medical staffing services at the Dilley facility.
Maxim's medical staffing services rendered at the Dilley facility are governed by contracts including No. HSCEDM-15-C-0004 (the "Contract"), which was awarded to Maxim by ICE. Under the Contract, Maxim agreed to perform the work detailed in the Contract's statement of work in accordance with the terms and conditions for the work.
ICE Contracting Officers and ICE Health Services Corps employees exercised oversight of Maxim's operations at the Dilley facility. ICE Contracting Officers ensured compliance with the Contract's terms and conditions, monitored performance, verified invoices, and provided direction to Maxim with regard to Maxim's execution of its duties and obligations under the Contract. ICE Health Services Corps employees were in charge of the medical clinic in which Maxim employees worked. ICE's contractual remedies for ensuring Maxim's compliance with the Contract included the ability to terminate the Contract for noncompliance. ICE also reserved the right to request the removal of any Maxim personnel whose performance was unsatisfactory, as well as to deny access to any Maxim employee to the Dilley facility if the employee did not maintain certain "Attributes and Professional Qualities," which included integrity and honesty. ICE also reserved the right to deny facility access to any contract employee whose actions conflicted with federal standards of conduct, which included a duty to disclose waste, fraud, abuse, and corruption. See 5 C.F.R. § 2635.
Each Maxim employee signed a Contract position description, which detailed the particular aspects of the position and also included the required attributes and professional qualities expected of the individual as an employee working at the Dilley facility.
Upon beginning employment with Maxim at the Dilley facility, employees received extensive compliance training, which continued annually. According to Maxim's Code of Conduct's section titled REPORTING CHANNELS, all employees
have a duty to report any suspected violation of law, this Code, or Company policies and procedures to Maxim. Suspected violations may be reported to your manager, the Compliance and Ethics Department, the Legal Department, a member of the Company Compliance Committee, or anonymously through the Integrity Hotline, as described below. Failure to report suspected violations of law, this Code, or Company policies and procedures violates this Code and
may lead to corrective action up to and including termination.
If you have concerns about reporting to your manager, or you have done so and the conduct has not been corrected, contact the Compliance and Ethics Department, the Legal Department, a member of the Company Compliance Committee, or report your concerns through the Integrity Hotline as described below.
The Code next describes how employees may access the hotline and other methods for reporting violations. Maxim also maintained a Whistleblower Protection Policy for employees who reported noncompliance matters. Finally, Maxim had a corrective-action policy, which provided for progressive discipline for employees who were remiss in their duties, but Maxim reserved the right to bypass disciplinary steps based on the severity of an action.
As a Maxim pharmacy technician at the Dilley facility, Wondercheck was responsible for meeting standards set by Maxim and the ICE Health Services Corps. Under Maxim's job description as a pharmacy technician, which Wondercheck signed on June 22, 2015, Wondercheck's duties included preparing and dispensing medications, ordering medication supplies, and checking medications received against orders placed. Additionally, she was to "[r]eport[ ] potential violations of Company policy, Code of Conduct, and/or applicable laws and regulations to the Company hotline through the chain of command, to the Compliance and Ethics Department, or through other channels."
Under the ICE Health Services Corps job description, which Wondercheck signed on February 2, 2015, she was to possess certain "Attributes and Professional Qualities," including strong oral and written communication skills, excellent interpersonal skills, critical thinking skills, integrity, and honesty.
Wondercheck signed the operative version on September 22, 2015, which also included requirements of integrity and honesty.
Wondercheck was required to certify that she had read Maxim's Code of Conduct annually. The Code of Conduct provided that all employees "are required to report potential fraud or abuse to [Maxim] through the Integrity Hotline or otherwise. Failure to report potential fraud or abuse to [Maxim] violates this Code and may lead to corrective actions up to and including termination." Maxim also provided Wondercheck compliance training, which covered topics such as fraud, abuse, and waste, and reiterated that it was an employee's "duty to report any suspected violation of law, the Code of Conduct, or Company policies and procedures."
Wondercheck's employment history
In reviewing the summary-judgment proof, there are two matters related to Wondercheck's employment with Maxim that are significant–Wondercheck's actions regarding (1) refrigerator-temperature reports, and (2) fraud reports. The court addresses these issues as they occurred chronologically.
Wondercheck's refrigerator-temperature reports
In late 2015, Maxim discovered that the temperatures of certain refrigerators and freezers utilized by the pharmacy had not been overseen or managed properly, leading to the destruction of approximately $80,000 worth of vaccines. Maxim and ICE Health Services Corps implemented a revised version of the local operating procedures related to refrigeration-temperature management, and Maxim educated its pharmacy staff, including Wondercheck, about reporting out-of-range temperatures in a timely manner. In May 2016, Maxim reviewed the pharmacy's refrigerator temperature logs for April and May 2016. Maxim discovered that on eight occasions, out-of-range temperatures had been recorded and there had been a failure to take corrective action as required by the revised policy and procedure. All of the out-of-range temperatures were reported by Wondercheck. In late May 2016, Maxim Contract Manager, Shawn Coffin interviewed Wondercheck about her failure to follow the refrigeration-management policy. Although Wondercheck's failure to follow the procedures was cause for Maxim to terminate Wondercheck's employment, on June 22, 2016, Maxim gave Wondercheck an Initial Warning. The warning given to Wondercheck provided that, "[u]nsatisfactory job performance in the future may result in additional corrective action up to and including termination of employment."
Wondercheck's fraud reports
Pharmacist An Nguyen, also a Maxim employee, was Wondercheck's direct supervisor throughout Wondercheck's employment with Maxim at the Dilley facility. Brad Switter, was also employed as a pharmacy technician by Maxim, was a coworker of Wondercheck, and was supervised by An Nguyen.
In February 2016, Wondercheck first observed An Nguyen ingest a Lovaza pill, that An Nguyen had improperly took off the pharmacy shelf at the Dilley facility. Wondercheck spoke with An Nguyen about his improper actions, telling him he needed to stop the improper behavior. Wondercheck later discovered that An Nguyen was ordering pharmaceuticals for men, which were not administered to the women and children at the Dilley facility, including Rogaine, Lovaza, and Metformin 850 mg tablets. Wondercheck learned that An Nguyen was taking these medications to use himself and was giving them to his family members. On June 9, 2016, Wondercheck called Maxim's Integrity Hotline and reported An Nguyen's actions.
Lovaza is a fish oil supplement usually taken for heart health.
Based on Wondercheck's hotline call, Coffin began an informal internal investigation of the matter. He confirmed An Nguyen's actions and learned that Wondercheck had known about An Nguyen's improper actions for at least four months before she called the hotline. When Coffin spoke with Wondercheck, he asked her why she had waited so long to report An Nguyen's actions. Wondercheck told Coffin that she wished she had reported An Nguyen's actions earlier. Wondercheck maintained she waited to make the report until she had a good faith belief that An Nguyen was committing fraud. Wondercheck stated by deposition that she did not have a good faith belief that An Nguyen was committing fraud until the first order for Minoxidil, a male hair growth product not used by women or children, arrived at the pharmacy in May 2016, near the time she called the hotline. It was then she concluded that An Nguyen was committing fraud upon the federal government. Coffin's investigation revealed that Switter also knew of An Nguyen's actions, but Switter never reported An Nguyen's improper actions to anyone.
After Wondercheck's interview with Coffin, Maxim began a full internal investigation of matters surrounding Wondercheck's fraud report. During the time of that investigation, Maxim was also investigating Wondercheck's April and May 2016 mismanagement of refrigeration temperatures. An Nguyen submitted his resignation of employment on June 19, 2016, with an effective date of July 2, 2016. Maxim did not accept his resignation, due to the pending active investigation. Upon finalizing the investigation, Maxim terminated An Nguyen's employment retroactively, to be effective as of June 21, 2016. On June 28, Wondercheck and Switter were placed on administrative leave for the remainder of the internal fraud investigation.
On June 22, 2016, Maxim gave Wondercheck the Inital Warning related to the refrigerator temperatures.
On June 28, Maxim updated Dilley facility's ICE representatives and officers about the results of Maxim's internal investigation, and Maxim's determination that Wondercheck and Switter each failed to immediately report An Nguyen's misconduct. What the ICE representatives were not told by Maxim was that it was Wondercheck who made the hotline-fraud report.
Linda Applewhite, the ICE Contracting Officer responsible for ensuring compliance with the Contract, determined that "Wondercheck and Switter failed to report the fraud by An Nguyen immediately." Because of Wondercheck's delayed reporting and Switter's nonreporting of An Nguyen's improper actions, Applewhite determined that Wondercheck and Switter no longer met the Attributes and Professional Qualities required by ICE Health Services Corps's Position Description. By a declaration submitted as summary-judgment proof, Applewhite stated, "In my over three decades working with contracts, many with the United States Government, I had never seen a contractor's employee fail to immediately report known fraud and abuse like Ms. Wondercheck and Mr. Switter." She sought and received approval from ICE to request that Maxim remove Wondercheck and Switter from the Contract.
On June 28, Applewhite emailed Maxim's Senior Program Manager, Daniel Murphy, and requested that Wondercheck and Switter be removed from the Contract. Because ICE requested that Wondercheck and Switter be removed from the ICE contract, Maxim maintained it could not employ them at the Dilley facility. Additionally, Maxim had no other pharmacy-technician positions available in Texas.
On July 2, 2016, Wondercheck reported to the Integrity Hotline that she believed her employment suspension was in retaliation for filing the fraud report about An Nguyen. Maxim did not investigate this report. On July 4, Wondercheck contends Switter submitted his letter of resignation, effective as of July 4, 2016. On July 11, 2016, Tom Gillespie, a Maxim supervisor, terminated Wondercheck and Switter's employment. A Corrective Action Form reflects that the explanation for Wondercheck's employment termination was that she was, "In direct violation of Maxim's Code of Conduct and Compliance training, employee failed to timely report to Maxim and Government leadership knowledge of a fellow Maxim contractor who was diverting medication and engaged in fraudulent conduct." This was the same reason Maxim gave for Switter's employment termination even though there is evidence that he had resigned earlier.
The summary-judgment proof appears possibly at odds because there is a Maxim Corrective Action Form, dated July 11, 2016, that reflects that Maxim terminated Switter's employment. Wondercheck refers the court to a letter dated July 4, 2016, with the signature redacted, that Wondercheck attributes to Switter. The substance of the July 4 letter is resignation of employment, but due to the redaction, it is unclear who is resigning.
Tho Nguyen was another pharmacist who worked with Wondercheck. Tho Nguyen was An Nguyen's friend and former roommate, they overlapped on work shifts, and Tho Nguyen observed at least some of An Nguyen's fraud, which he discussed with Wondercheck. Maxim did not terminate Tho Nguyen's employment, but rather only gave him a verbal warning. ICE and Maxim ultimately settled, with Maxim paying ICE $1,549.46 for the losses An Nguyen's fraud caused ICE.
Finally, to clarify the events timeline, Maxim did not issue the formal corrective action for the refrigeration temperatures to Wondercheck–an Initial Warning, which was the lowest form of discipline-until June 22, 2016, which was after she called the hotline the first time and reported An Nguyen's fraud. However, summary-judgment proof reflects that Coffin had conducted the interview with Wondercheck about the temperatures and recommended the corrective action before Wondercheck called the hotline.
Administrative proceedings
As required by the National Defense Authorization Act before filing this action, Wondercheck filed a whistleblower-retaliation complaint with the Office of the Inspector General. See 41 U.S.C. § 4712(b), (c). The Inspector General investigated and Maxim participated in the investigation. After more than 210 days had passed since Wondercheck submitted the complaint to the Inspector General, Wondercheck filed this action. Id. at § 4712(c)(2). The False Claims Act has no exhaustion-of-administrative-remedies requirement. Accordingly, Wondercheck has exhausted all required administrative remedies.
Maxim, by response to Wondercheck's motion for partial summary judgment, withdrew the following affirmative defenses: (1) failure to exhaust administrative remedies; (2) statute of limitations; and (3) estoppel, unclean hands, laches, and after-acquired evidence.
Arguments
Wondercheck seeks summary judgment on the issue of liability, arguing that only the issues of recoverable damages and attorney's fees should proceed to trial. Maxim seeks summary judgment as to all matters.
Wondercheck argues that Maxim wrongly terminated her employment because of the timing of her report of fraud despite the fact that Maxim has no policy requiring immediate reporting of fraud, timely reporting of fraud, or reporting fraud within any timeframe. Wondercheck contends that Maxim's discipline for other employees who totally "failed to timely report" An Nguyen's fraud, that is never called the hotline, was only an initial warning, not suspension and termination of employment as Maxim assessed against Wondercheck. Based on undisputed facts and the applicable law, Wondercheck contends that she is entitled to summary judgment as to Maxim's liability on her retaliation claims as she has established as a matter of law that Maxim violated the whistleblower-retaliation provisions of the False Claims Act and the National Defense Authorization Act. Additionally, Wondercheck contends that as a matter of law Maxim cannot carry its burden of proof on the remaining affirmative defenses.
Maxim contends that it is entitled to summary judgment on both of Wondercheck's retaliation claims because Maxim terminated Wondercheck's employment for legitimate, nonretaliatory reasons and because Wondercheck has failed to adduce sufficient evidence of pretext to withstand summary judgment. Maxim argues that even if Wondercheck can establish a prima facie case of retaliation, Maxim did not terminate Wondercheck because of her report, rather Maxim terminated Wondercheck because she delayed for too long before reporting An Nguyen's fraud. Also, Maxim argues Wondercheck failed to timely report An Nguyen's actions after Wondercheck had been subjected to discipline for a prior violation of Maxim policy. The Corrective Action Form issued for Wondercheck's prior violation regarding refrigeration temperatures warned her that future unsatisfactory performance could lead to termination of her employment. Finally, Maxim argues that ICE required Maxim to remove Wondercheck from the Contract due to Wondercheck's failure to report An Nguyen's actions sooner than she did. As Wondercheck's access to the Dilley facility had been revoked by ICE, Maxim could no longer employ Wondercheck in the job she was hired to perform.
Summary-judgment review
Summary judgment shall be rendered when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine dispute as to any material fact and that the moving party is entitled to judgment as a matter of law. FED. R. CIV.P. 56(a) ; Celotex Corp. v. Catrett , 477 U.S. 317, 323–25, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ; Ragas v. Tenn. Gas Pipeline Co. , 136 F.3d 455, 458 (5th Cir. 1998). If the moving party carries its burden of showing that there is no genuine dispute as to any material fact, the burden shifts to the nonmovant to introduce specific facts or produce evidence that shows the existence of a genuine dispute regarding a material fact that prevents the grant of summary judgment in the movant's favor. FED. R. CIV.P. 56(e) ; see also Celotex , 477 U.S. at 322–23, 106 S.Ct. 2548. A dispute regarding a material fact is "genuine" if the evidence is such that a reasonable jury could return a verdict in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
On cross motions for summary judgment, the court reviews each party's motion independently, viewing the evidence and inferences in the light most favorable to the nonmoving party, determining for each side, whether judgment may be rendered in accordance with the Rule 56 standard. Amerisure Ins. Co. v. Navigators Ins. Co. , 611 F.3d 299, 304 (5th Cir. 2010) (internal citation and quotation omitted); Shaw Constr. v. ICF Kaiser Engrs., Inc. , 395 F.3d 533 fn. 8 & 9 (5th Cir. 2004).
The law
False Claims Act
The purpose of the False Claims Act is to discourage fraud against the government and the whistleblower provision is intended to encourage those with knowledge of fraud to come forward. Robertson v. Bell Helicopter Textron , Inc., 32 F.3d 948, 951 (5th Cir. 1994). Any employee shall be entitled to all relief necessary to make that employee whole if that employee is discharged or suspended because of lawful acts done by the employee to stop one or more violations of the False Claims Act. See 31 U.S.C. § 3730(h).
The Fifth Circuit applies the McDonnell Douglas burden-shifting framework to the False Claims Act's anti-retaliation provision. See Garcia v. Professional Contract Svcs., Inc., 938 F.3d 236, 240-41 (5th Cir. 2019). Under this framework, the employee must first establish a prima facie case of retaliation by showing: (1) she engaged in protected activity; (2) the employer knew about the protected activity; and (3) the employer retaliated against the employee because of her protected activity. 31 U.S.C. § 3730(h)(1) ; United States ex rel. King v. Solvay Pharm., Inc. , 871 F.3d 318, 332 (5th Cir. 2017). "A protected activity is one motivated by a concern regarding fraud against the government." Thomas v. ITT Educational Servs., Inc. , 517 F. App'x 259, 262 (5th Cir. 2013). "[E]xpress[ing] concerns about possible fraud to their employers," such as to a supervisor, is a step in furtherance of uncovering fraud, and this is protected under the False Claims Act. See Robertson , 32 F.3d at 951. At the prima facie stage, a plaintiff can meet her burden simply by showing close enough timing between the protected activity and the adverse employment action. Garcia , 938 F.3d at 243.
Upon the plaintiff establishing a prima facie case, the burden shifts to the employer to state a legitimate, non-retaliatory reason for its decision. Solvay Pharms. , 871 F.3d at 332. The employer's burden is "one of production, not persuasion, and it involves no credibility assessment." Musser v. Paul Quinn Coll. , 944 F.3d 557, 561 (5th Cir. 2019) (quoting Reeves v. Sanderson Plumbing Prods., Inc. , 530 U.S. 133, 142, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000) ).
"After the employer states its reason, the burden shifts back to the employee to demonstrate that the employer's reason is actually a pretext for retaliation." Solvay Pharms. , 871 F.3d at 332 (citations omitted). What is required is a showing of but-for causation, which requires more than mere temporal proximity. Garcia , 938 F.3d at 243-44. "The combination of suspicious timing with other significant evidence of pretext can be sufficient to survive summary judgment." Id. at 244 (quoting Shackelford v. Deloitte & Touche, LLP , 190 F.3d 398, 409 (5th Cir. 1999) ).
National Defense Authorization Act
Under the National Defense Authorization Act's antiretaliation provision, an employee of a Federal contractor, "may not be discharged ... as a reprisal for disclosing ... information that the employee reasonably believes is evidence of ... a gross waste of Federal funds ... or a violation of law, rule, or regulation related to a Federal contract[.]" 41 U.S.C. § 4712(a)(1). The antiretaliation provision expressly incorporates the "legal burdens of proof specified in section 1221(e) of title 5." Id. at § 4712(c)(6).
To establish a prima facie case, an employee of a Federal contractor must show: (1) she engaged in protected activity by (a) disclosing information that she reasonably believed was evidence of "gross mismanagement of a Federal contract or grant, a gross waste of Federal funds ..., or a violation of law, rule, or regulation related to a Federal contract" and (b) making such disclosure to a covered person or body, such as a "management official or other employee of the contractor ... who has the responsibility to investigate, discover, or address misconduct;" (2) she suffered adverse employment action; and (3) the protected disclosure was a "contributing factor" to the adverse employment action. 41 U.S.C. § 4712(a)(1) ; see also Casias v. Raytheon Co. , No. 17-CV-2635-MSK-SKC, 2019 WL 1170546 *2 (D. Colo. 2019). Upon the plaintiff employee presenting a prima facie case, the contractor can then demonstrate, by clear and convincing evidence, that it would have taken the same personnel action despite the protected activity. See 5 U.S.C. § 1221(e).
Analysis
False Claims Act
Wondercheck argues that she has established her prima facie case as it is undisputed that her employment was terminated within approximately one month after she called the hotline, which is protected activity. See Garcia , 938 F.3d. at 243 (temporal proximity alone between employee's protected activity and adverse employment action can be enough to establish prima facie case). The court agrees that Wondercheck has satisfied the evidentiary burden for a prima facie case.
Maxim then has the burden to produce a legitimate, non-retaliatory reason for its actions. Maxim argues that it has three non-retaliatory reasons for terminating Wondercheck's employment: (1) Wondercheck waited too long to make her fraud report; (2) Wondercheck's failure to timely report An Nguyen's fraud was her second Maxim policy violation; and (3) ICE mandated Wondercheck be removed from the Contract.
Wondercheck argues that because each of Maxim's reasons is related to the protected activity of the hotline fraud report, none of Maxim's reasons is a legitimante non-retaliatory reason for terminating her employment. Wondercheck argues: (1) Maxim's terminating her employment for waiting too long to make her fraud report was a reprisal for engaging in the protected activity of making the hotline report and participating in the investigation; (2) Maxim's final-straw argument–the late report was her second Maxim policy violation–was related to the protected activity of reporting fraud; and (3) it was not ICE that mandated Wondercheck's suspension or termination, that was Maxim's doing.
At this stage of proceedings, Maxim's burden is one of production not persuasion, and the court does not judge the credibility of Maxim's reasons for terminating Wondercheck's employment. Therefore, assuming Maxim has presented a legitimate, non-retaliatory reason for taking an adverse employment action, the burden shifts back to Wondercheck to demonstrate that Maxim's reason is a pretext for retaliation. Garcia , 938 F.3d at 241. The combination of suspicious timing with other significant evidence of pretext can be sufficient to survive summary judgment. Id. at 244.
Wondercheck accomplishes this by showing that the adverse action would not have occurred but for the employer's retaliatory motive. Id. at 242-43. Maxim's written reason for terminating Wondercheck's employment was "failure to timely report." Maxim's policies however, contain no written requirement to "timely" report. Maxim's policy only requires that a report be made. Here Wondercheck made a report. Additionally, Wondercheck argues that although Maxim now provides three reasons for terminating her employment, decision-maker Jawn Oiler stated by deposition that there was only one reason her employment was terminated and that was Wondercheck's failure to report An Nguyen's fraud in a timely manner. Additionally, Maxim's decision-maker Tom Gillespie stated by deposition that he was unaware that Wondercheck's previous warnings had anything to do with Wondercheck's employment termination.
The Garcia court reversed the district court's summary judgment in favor of the employer after reviewing six areas of evidence, which the court determined suggested that the adverse action taken was a pretext and thus summary judgment was inappropriate: "(1) temporal proximity between [plaintiff's] protected activity and his firing; (2) [plaintiff's] dispute of the facts leading up to his termination; (3) a similarly situated employee who was not terminated for similar conduct; (4) harassment from his supervisor after the company knew of his protected whistleblowing conduct; (5) the ultimate stated reason for the company's termination of Garcia had been known to the company for years; and (6) the company stood to lose millions of dollars if its conduct was discovered." 938 F.3d at 241.
In Garcia , the Circuit held that the adverse action taken within two to four months of protected conduct was close enough to show a causal connection. Id. at 243. Here Maxim's suspension and termination of Wondercheck's employment both occurred within just over one month after Wondercheck made her first hotline call.
Wondercheck argues that there are material factual disputes leading up to Maxim's termination of her employment such that summary judgment in favor of Maxim is inappropriate. In Garcia , the plaintiff admitted to mistakes on the job but disputed any claim that his employment had been terminated for those mistakes. Id. Similarly, here Wondercheck acknowledges that she made mistakes regarding the refrigeration temperatures, but disputes that those actions had anything to do with Maxim suspending or terminating her employment. Wondercheck believes that the adverse actions were taken against her as a pretext for retaliation. Further, to the extent a timely report was required, although there is no Maxim policy or law that says so, and to the extent Maxim contends Wondercheck's report was untimely, Maxim cannot tell the court exactly when a report is timely or when a report becomes untimely. Therefore Wondercheck argues, to the extent a timely report was required, timeliness is a disputed material fact. Further, Wondercheck states that she took time to determine whether the conduct she saw An Nguyen engaging in violated Maxim policy or constituted fraud. She eventually discovered An Nguyen was ordering and taking Minoxidil, which she then reported. Oilar stated by deposition that it was Maxim's policy to require complainants to have a good faith belief before reporting fraud. Wondercheck states that she did not report An Nguyen's actions until she had a good faith belief that An Nguyen was committing fraud.
Tho Nguyen and Brad Switter were similarly situated as Wondercheck, but were not treated the same as Wondercheck. Although Tho Nguyen and Wondercheck had discussed An Nguyen's actions, Tho Nguyen was aware of An Nguyen's fraud, Tho Nguyen never reported any of An Nguyen's fraud to Maxim, Tho Nguyen was given only a verbal warning. Switter, who also knew about An Nguyen's fraud and did not report that fraud to Maxim, received the same adverse employment actions as Wondercheck.
In considering Maxim's motion for summary judgment and all facts in the light most favorable to the nonmovant Wondercheck, the court concludes that genuine issues of material fact remain and Maxim's motion for summary judgment regarding Wondercheck's False Claims Act allegations will be denied. Additionally, with regard to Wondercheck's motion for summary judgment, the court concludes similarly that genuine issues of material fact remain and Wondercheck's motion for summary judgment as to liability on the False Claims Act allegations should be denied.
National Defense Authorization Act
Wondercheck contends that she has established as a matter of law that Maxim violated the antiretaliation provision of the National Defense Authorization Act, and the court should render summary judgment as to liability in her favor. Wondercheck argues that she has established a prima facie case of retaliation as she engaged in a protected activity-reported An Nguyen's fraud, she suffered an adverse employment action-Maxim terminated her employment, and her reporting An Nguyen's fraud was a contributing factor in Maxim's decision to terminate her employment. Further, Wondercheck argues that Maxim cannot show by clear and convincing evidence that it would have terminated her employment despite her report of fraud. See Casias , 2019 WL 1170546 at *2-4.
Maxim contends that in addition to Wondercheck failing to show that her report was a contributing factor to her employment termination, Wondercheck cannot rebut Maxim's clear and convincing evidence that Maxim would have independently terminated her employment. Therefore, Maxim argues that it is entitled to summary judgment on Wondercheck's National Defense Authorization Act's antiretaliation claim.
Any disclosure of information by an employee of a federal contractor to a management official or other employee of the contractor is protected if the employee reasonably believes that it is evidence of gross waste of federal funds or a violation of a law, rule, or regulation related to a Federal contract. 41 U.S.C. § 4712(a)(1). Here, there is no dispute that Wondercheck engaged in protected activity when she reported her supervisor An Nguyen's fraud to the hotline. There is also no dispute that Wondercheck engaged in the fraud investigation and no dispute that she reported retaliation to the hotline when Coffin suspended her for making the fraud report.
There is also no dispute that Maxim suspended Wondercheck without pay on June 28, 2016, and terminated her employment on July 11, 2016. There is no dispute that each of these employment actions taken by Maxim were adverse to Wondercheck.
The antiretaliation provision of the National Defense Authorization Act requires only contributing-factor causation.
A contributing factor is any factor, which alone or in combination with other factors, tends to affect in any way the outcome of the decision. This element is broad and forgiving, and this test is specifically intended to overrule existing case law, which requires a whistleblower to prove that his protected conduct was a ‘significant,’ ‘substantial,’ or ‘predominant’ factor in a personnel action in order to overturn that action. Temporal proximity between the protected activity and the adverse action is a significant factor in considering a circumstantial showing of causation, the causal connection may be severed by the passage of a significant amount of time, or by some legitimate intervening event.
Cejka v. Vectrus Sys. Corp. , 292 F.Supp. 3d 1175, 1194 (D. Colo. 2018) (citing United States ex rel. Cody v. Mantech Int'l Corp. , 207 F.Supp.3d 610, 620-21 (E.D. Va. 2016) )(quoting Feldman v. Law Enforcement Assocs. Corp. , 752 F.3d 339, 348 (4th Cir. 2014) ). Under this " ‘broad and forgiving’ standard, a plaintiff has ‘a rather light burden of showing by a preponderance of the evidence that the [protected] activities tended to affect [her] termination in at least some way.’ " Id.
Wondercheck argues that she has established causation because all decision-makers had knowledge of the protected activity, and the adverse employment actions occurred within only weeks of the protected conduct. Maxim argues that although Wondercheck is correct that in most instances temporal proximity and knowledge alone are sufficient to satisfy the contributing-factor standard, here that method of establishing causation is unavailing as Wondercheck's protected disclosure ultimately revealed her own wrongdoing–delayed reporting. The court finds that fact issues remain for a jury's resolution regarding causation.
Maxim contends that even if Wondercheck could establish contributing-factor causation, Maxim has adduced clear-and-convincing evidence that it would have terminated Wondercheck even if she had not called the hotline. See 5 U.S.C. § 1221(e)(2). Wondercheck argues that Maxim is unable to establish clear-and-convincing evidence that it would have taken the same employment action absent Wondercheck's hotline reports.
The court finds that neither side has established its position on this prong of the analysis as a matter of law. Genuine issues of material fact remain and the court will deny each side's motion for summary judgment as to Wondercheck's claim that Maxim violated the antiretaliation provision of the National Defense Authorization Act by suspending and terminating her employment.
Affirmative defenses
Wondercheck contends that she is entitled to summary judgment on Maxim's remaining affirmative defenses, failure to mitigate damages and unjust enrichment. Maxim responds that there remain genuine issues of material fact regarding both defenses. The court agrees with Maxim. The court finds and concludes that there remain genuine issues of material fact with regard to both of these affirmative defenses. Wondercheck's motion for summary judgment with regard to these defenses will be denied.
Conclusion
Having considered the motions, responses, replies, summary-judgment proof, case file, applicable law, and for the foregoing reasons, the court denies both motions for summary judgment. Wondercheck's wrongful termination claims under the False Claims Act and the National Defense Authorization Act and Maxim's affirmative defenses claiming that Wondercheck failed to mitigate damages and will be unjustly enriched if allowed to fully recover her claimed damages shall proceed to trial.
IT IS ORDERED that Defendant Maxim Healthcare's Services, Inc.'s Motion for Summary Judgment filed August 17, 2020 (Doc. #20) and Plaintiff Laura Wondercheck's Motion for Partial Summary Judgment filed August 17, 2020 (Doc. #21) are DENIED.
IT IS FURTHER ORDERED that Defendant Maxim Healthcare's Services, Inc.'s affirmative defenses of failure to exhaust administrative remedies, statute of limitations, and estoppel, unclean hands, laches, and after-acquired evidence are DEEMED WITHDRAWN. See supra note 8.
IT IS FURTHER ORDERED that this action is reset for Final Pretrial Conference on November 20, 2020, at 2:30 p.m. Austin time, by telephone. Counsel may call in to the court's conference line at (877) 873-8017; Access Code 7996289.
Jury selection and trial remain set for December 2020.
The parties initial final pretrial filings are due to be filed on or before November 6, 2020.