Recently, the United States District Court for the Southern District of Mississippi issued a detailed ruling dismissing an employee’s retaliatory discharge claim under the Federal False Claims Act (“FCA”). See McCollum v. Jacobs Engineering Group, Inc., No. 3:13-cv-866, 2014 WL 218441 (S.D. Miss. 2014). 

One Sentence Takeaway

While a whistleblower retaliatory discharge claim allows an employee to recover for a wrongful discharge, numerous factors will defeat the claim, particularly where the discharge was mandated by the applicable contract or where there is a documented history of performance deficiencies by the employee.

Background

The Federal Bureau of Prisons (“BOP”) awarded Jacobs Engineering Group, Inc. and Jacobs Project Management Co. (collectively “Jacobs”) a construction management contract to oversee construction of a correctional institute in Aliceville, Alabama (the “Project”). After receiving the contract, Jacobs hired Scotty McCollum (“McCollum”) as the resident field engineer for the Project. McCollum’s duties included preparation of independent government estimates for the BOP. 

The BOP began voicing complaints about McCollum’s work less than five months after McCollum began work. These complaints were primarily related to the timeliness and accuracy of McCollum’s independent government estimates and his work ethic. Jacobs noted these complaints and discussed them with McCollum on numerous occasions. Unfortunately, the relationship between McCollum and the BOP continued to deteriorate. During this time, McCollum began raising concerns about Jacobs’ billing process to his immediate supervisors.

Ultimately, the BOP exercised its contractual right to remove Jacobs’ personnel and required Jacobs to replace McCollum. Jacobs complied and, in accordance with company policy, placed McCollum on Company Convenience Leave (“CCL”). CCL grants the employee an unpaid leave of absence for sixty days, during which time the employee may seek other employment within Jacobs. If the employee is not returned to active status at the end of the sixty days then the employment is terminated. McCollum did not seek or receive additional employment within 60 days, so he was terminated. McCollum then filed a federal qui tam complaint alleging Jacobs had certified, approved, and submitted falsified change orders in violation of the FCA. The complaint also contained a claim for retaliatory discharge under the FCA. After the Department of Justice chose not to intervene in the qui tam action, McCollum filed a separate suit against Jacobs for retaliatory discharge under both federal and state law. Jacobs moved for summary judgment.

The Court’s Decision

The court granted Jacobs’ motion for summary judgment and dismissed the state and federal retaliatory discharge and wrongful termination claims. In so doing, the court identified numerous grounds supporting the dismissal. For instance, the court found that, in the absence of direct evidence of retaliation, Jacobs could shift the summary judgment burden of proof to McCollum if Jacobs could present a legitimate, non-retaliatory reason for discharging McCollum. The court found that Jacobs met this requirement because (1) Jacobs had documented the outstanding issues between the BOP and McCollum and had carried out the termination in accordance with company policy and (2) Jacobs’ contract with the BOP permitted the BOP to mandate McCollum’s removal. Each of these reasons provided a sufficient basis to shift the summary judgment burden to McCollum to show retaliatory discharge.

Additionally, the court found that McCollum was unable to meet the retaliatory discharge burden. One key finding was that McCollum was not engaged in a protected action because he did not voice concerns about the billing process to anyone besides his immediate supervisors at Jacobs until after the BOP ordered him removed. In essence, McCollum never gave Jacobs notice of his concerns about billing or Jacobs’ potential exposure to FCA liability while employed. Thus, because McCollum failed to show any protected activity or any retaliatory motive, Jacobs was entitled to summary judgment.

Practical Implications

  • Document Employee Issues – One of the primary defenses to a retaliatory discharge claim is that the employee was terminated for reasons other than the employee’s whistleblowing. Written reports documenting problems with the employee generated before the employee’s termination carry great weight when making this defense.
  • Burden Shifting – In the absence of direct evidence of retaliation, legitimate, non-retaliatory reasons for termination will assist in the expedited dismissal of retaliatory discharge claims by shifting the summary judgment burden from the employer to the employee.
  • Safety in Contracts – Absent collusion between the government and employer, courts will discount retaliatory discharge claims where the government exercised its contractual right to remove an employee.
  • Establish and Follow Company Policy on Discharging Employees – Adhering to an established company policy when discharging employees provides more evidence that the employee’s termination was due to reasons unrelated to any whistleblower claim.
  • Act in Good Faith –Jacobs’ good faith efforts to comply with its company discharge policy impressed the court. Even after McCollum was removed from the Project, Jacobs followed policy and not only gave McCollum the opportunity to apply for other positions, but offered to write letters of recommendation if needed.

Conclusion

McCollum v. Jacobs Engineering Group, Inc. provides employers with a road map for defeating retaliatory discharge claims under the FCA. While disgruntled employees are oftentimes a risk of doing business, strict adherence to specific company policy, including documenting employee issues prior to termination, will assist in defending meritless retaliatory discharge claims.