Myers v. Alutiiq Intl. Solutions LLC, et al., No. 10- CV-2041 (ABJ), 2011 WL 4018230 (D.D.C. Sept. 12, 2011).
Judge Amy Jackson of the U.S. District Court recently issued a good decision that addresses two somewhat unsettled issues relating to the commonlaw wrongful termination in violation of public policy claim.
Judge Jackson finds that (1) the employee does not have to prove an actual violation, only that the employee had a reasonable belief that the employer was violating the law; and (2) that there can be individual liability on this claim. In the past, individual defendants usually had to be brought in on a civil conspiracy claim, but if this ruling gets adopted by other courts, then it may be simpler to plead the individual defendants on the wrongful termination claim.
This plaintiff worked for a government contractor that provided services to the Department of State.
Some excerpts follow - emphasis added:
. . . . Plaintiff's complaint raises the question of whether reporting wrongdoing in connection with government contracting falls within the public policy exception to an at-will employment relationship. 5 U.S.C. § 2302 reflects a clear public policy of encouraging government employees to come forward and report possible problems in federal programs, and there are many other whistleblower protection statutes that protect not only government employees, but private sector employees as well. See, e.g., 15 U.S.C. § 2087 (Consumer Product Safety Improvement Act); 18 U.S.C. § 1514A (SarbanesOxley Act); 29 U.S.C. § 660 (Occupational Safety & Health Act).
The Federal Acquisition Regulations ("FAR") express a policy that contractors avoid or mitigate organizational conflicts of interests and state that "[e]ach individual contracting situation should be examined on the basis of its particular facts and the nature of the proposed contract." 48 C.F.R. § 9.505. The FAR also prohibits personal conflicts of interest . . . . 48 C.F.R. § 3.101-1. The FAR further prohibit employers from "discharg[ing], demot[ing] or otherwise discriminat[ing] against an employee as a reprisal for disclosing information to ... an authorized official of an agency ... relating to a substantial violation of law related to a contract...." 48 C.F.R. § 3.903.
Plaintiff alleges that the close personal relationship between the COR, Bailey, and a government contractor, Lori Strickland, violated federal contracting regulations. Compl. ¶ 45. He further alleges that his employers knew that he reported those violations to his supervisors and to the OIG. Id. ¶ 46. Finally, he alleges that he was fired immediately after the OIG concluded that most of his allegations were substantiated and that Bailey and Lori Strickland were subject to discipline. Id. ¶ 47. Accepting plaintiff's allegations as true and resolving all inferences in his favor, as the Court must do at this juncture, plaintiff in this case has alleged sufficient facts to state a claim under the Carl public policy exception to the general rule against wrongful discharge claims by at-will employees. See Ware v. Nicklin Assocs., Inc., 580 F.Supp.2d 158 (D.D.C.2008) (finding that plaintiff stated a wrongful discharge claim where she alleged she had knowledge of an illegal billing scheme, her employers were aware of her knowledge, and she was fired because of that knowledge).
Defendants argue that plaintiff "cannot and does not explain how COR Bailey's alleged actions constituted a 'substantial violation of law' under these sections so as to make applicable FAR 3.903." Defs.' Reply at 3. But plaintiff is not required to establish here that his employers violated any particular provision of the FAR; the FAR provisions are relevant to this motion because they are illustrative of the strong public policy against conflicts of interest and favoring the protection of whistleblowers. In Vreven, the plaintiff had reported concerns to her supervisors that the defendant was evading taxes in violation of the Internal Revenue Code. 604 F.Supp.2d at 11. The court held that the plaintiff stated a claim for wrongful discharge under Twombly and the Carl standard even though she had not specified the manner in which the defendant allegedly violated its tax exempt status. The court found that the allegations "make plausible the conclusion that defendant discharged plaintiff as a result of her objections to alleged violations of defendant's tax exempt status." Id. at 14. Here, plaintiff has alleged sufficient facts to make plausible the conclusion that defendants fired him in retaliation for reporting alleged violations of federal contracting regulations.
ii. Plaintiff states a claim for wrongful termination against the individual defendants
The individual defendants argue that they cannot be held liable as a matter law for a wrongful termination claim. Although the D.C. Court of Appeals has not addressed this question directly, a review of its opinions in the employment area suggests that it would not bar claims for wrongful discharge against individual employees if the facts established that the individuals acted improperly or illegally. Because the Court must draw all reasonable inferences in plaintiff's favor at this stage, it will allow the wrongful termination claim against the individual defendants to proceed.
Defendants cite decisions of other states holding that individual supervisors cannot be held liable for wrongful termination. Defs.' Mem. at 11.While it is true that some states prohibit wrongful termination suits against individual supervisors, it is equally true that several states allow such claims. See Physio GP, Inc. v. Naifeh, 306 S.W.3d 886, 892 n. 2 (Tex.App.2010) (Hudson, J., dissenting) (collecting cases on the split of authority). The states recognizing individual liability reason that individuals are liable for their own torts, even as agents acting on behalf of their employers. See, e.g., Jasper v. H. Nizam, Inc.,764 N.W.2d 751, 775- 76 (Iowa 2009); Ballinger v. Del. River Port Auth., 800 A.2d 97, 110-11 (N.J.2002); Harless v. First Nat'l Bank in Fairmont, 289 S.E.2d 692, 698-99 (W.Va.1982). According to that logic, employees can be liable for a wrongful discharge claim just as any other tort. See, e.g., Jasper, 764 N.W.2d at 775-76; Ballinger, 800 A.2d at 110-11; Harless, 289 S.E.2d at 698-700. These courts "reason that individual liability promotes deterrence and better decision making because it allows the active wrongdoer to be held directly responsible." Physio, 306 S.W.3d at 888, citing Borecki v. E. Int'l Mgmt. Corp.,n 694 F.Supp. 47, 59 (D.N.J.1988); Jasper, 764 N.W.2d at 776.
On the other hand, the states that do not allow wrongful termination claims against individual supervisors explain that "the employment relationship is the source of the duty in wrongful discharge torts." Physio, 306 S.W.3d at 888. That relationship exists only between employer and employee and not between two employees, and only the employer has the power to terminate an employee. Id. (citations omitted). These courts further reason that individual liability is unnecessary to deter employees "because liable employers will likely take their own measures to deter agents or employees from wrongfully exercising termination authority." Id. at 889. Indeed, fear of liability could discourage supervisors from terminating employers under legitimate circumstances. Id. (citations omitted). Finally, these courts express the concern that it can be difficult to determine which individuals should be liable for a decision to terminate. Id. (citations omitted).
The Court finds the reasoning of the states that have allowed claims against individual employees to be more consistent with the law of the District of Columbia. Although the D.C. Court of Appeals has not directly ruled on this issue in the context of a wrongful discharge action, it has recognized that there may be some circumstances where an individual supervisory employee can be liable for tortious interference with another employee's contractual relations with the employer. . . .
. . . . This holding is in keeping with the reasoning of the courts in other states that allowed wrongful termination claims against individual employees because individuals are liable for their own torts, even as agents acting on behalf of their employers. Therefore, reading Sorrells in conjunction with Carl, the Court finds that the D.C. Court of Appeals would allow claims against individual supervisors for wrongful discharge if it was shown that their conduct was sufficiently wrongful and violative of an important public policy.
The decision is available online at: https://ecf.dcd.uscourts.gov/cgi-bin/show_public_doc?2010cv2041-7.
– submitted by Alan R. Kabat