In a case that reiterates the importance of documentation, an employer avoided liability for an employee’s retaliation claim under the False Claims Act where it was able to demonstrate the legitimacy of its decision to eliminate her position and that she had performance issues that pre-dated her whistleblower complaint.

In Musser v. Paul Quinn College, the plaintiff alleged that she had been terminated in retaliation for making a whistleblower complaint about fraud under the False Claims Act. The U.S. Court of Appeals for the Fifth Circuit, however, found that the employer had offered a legitimate non-retaliatory reason for the termination – a departmental reorganization that resulted in the elimination of her position and her poor performance.

With regard to the reorganization in particular, the employer was able to show that her job duties were reassigned to other, existing employees and no one was hired to replace her. Although the plaintiff argued that the decision did not actually result in cost savings, the Fifth Circuit noted that cost was not the only stated reason for the reorganization – it was also to streamline staff. Moreover, even if, in hindsight, the decision did not result in cost savings, that would only establish that the reason was mistaken, not dishonest, and, as the Fifth Circuit asserted, its role is not to second-guess business decisions.

In addition, the employer was able to demonstrate a history of poor performance resulting in discussions about possible termination that pre-dated the whistleblower complaint. This evidence also undermined the plaintiff’s retaliation claim.

The lesson for employers here is the importance of detailed, accurate and contemporaneous documentation. Although such documentation may not prevent an employee from asserting a claim, it will enable the employer to defend itself effectively.