MATTHEW W. BRANN, District Judge.
Pending before this Court is a motion to dismiss, filed by Triangle Tech, Inc., Timothy McMahon, Catherine Waxter, Lisa Capuzzi, and Deborah Hepburn (hereinafter collectively "Defendants") which seeks to dismiss a complaint filed by Joseph Drumm, Ronald McElwee, Carol Beck, and Lisa Delbaugh (collectively "Plaintiffs") for failure to state a claim upon which relief can be granted, pursuant to Federal Rule of Civil Procedure 12(b)(6).
This matter arises from employment relationships between the parties. Plaintiffs were each employed by Defendant Triangle Tech in various capacities. Defendant Triangle Tech operates technical schools throughout Pennsylvania in the following locations: Sunbury, DuBois, Bethlehem, Pittsburgh, Greensburg, and Erie. On June 5, 2014, Plaintiff Drumm, employed at the time as the Director of the Sunbury School, one of the Triangle Tech schools, was allegedly directed by Defendant Waxter to fraudulently sign and back-date a document in order to secure financial aid funds by the United States Department of Education (hereinafter "the Department of Education"). After refusing to do so, Plaintiff Drumm proceeded to report the incident to his immediate supervisor, Defendant Hepburn, and Sofia Janis, the Vice President of Human Resources. On June 18, 2014, Ms. Janis contacted Plaintiff Drumm, indicating that a thorough investigation had been conducted into the matter which yielded no evidence of wrongdoing. The next day, Plaintiff Drumm filed a complaint with the Accrediting Commission of Career Schools and Colleges.
A few days later, on June 25, 2014, Plaintiffs Drumm and McElwee met with the Office of Inspector General (hereinafter "OIG"), the administrative agency charged with investigating complaints of "waste and abuse to improve the efficiency and effectiveness of the Department of Education programs and operations."
An investigation was conducted through the months of July and August 2014. On August 11, 2014, Defendant Hepburn scheduled a mandatory pre-accreditation meeting at which Defendant McMahon, the President of Triangle Tech, notified all the employees, including all Plaintiffs, that a Department of Education complaint was filed against Defendant Triangle Tech and that he was "extremely disappointed."
As a result of the OIG investigation, Defendant Triangle Tech. repaid approximately $70,000 to the Department of Education for financial aid it improperly received. Plaintiffs allege that "[s]hortly thereafter, Defendants began a concerted effort to investigate Plaintiffs (sic) actions in the workplace with the intent of finding a basis for immediate termination."
Plaintiffs Drumm, Delbaugh, and Beck were suspended without pay on November 20, 2014, pending an investigation into their behavior in the workplace. On December 3, 2014, Plaintiff Drumm was terminated for fostering an unprofessional culture in the workplace. The next day, Plaintiffs Delbaugh and Beck were terminated for bullying and violations of wage and hour laws, respectively.
On July 24, 2014, the day before he met with the OIG investigator, Plaintiff McElwee notified his supervisor that he intended to request time off for the birth of his first child, who was due in September 2014. On September 24, 2014, Plaintiff McElwee provided notice to Defendant Triangle Tech that he intended to take two weeks of Family Medical Leave pursuant to the FMLA (which was beginning on approximately September 30, 2014) for the birth of his child. Two days later, on September 26, 2014, an Employee Leave of Absence Request Form was received and approved by supervisors and a Notice of Eligibility and Rights & Responsibilities pursuant to the FMLA was prepared and issued to Plaintiff McElwee, indicating that he was eligible for leave.
Plaintiff McElwee's child was born on September 29, 2014 with serious medical issues. The next day, Plaintiff Drumm informed the other supervisors of the child's serious medical issues and Plaintiff McElwee was asked to provide sufficient certification to support his request for leave pursuant to the FMLA. That same day, Plaintiff McElwee provided a certificate reflecting the child's birth.
Several days later, on October 7, 2014, Plaintiff Drumm was advised that Plaintiff McElwee would be terminated due to poor performance and was directed to prepare the termination paperwork. On October 8, 2014, Plaintiff McElwee submitted a Certification of Health Care Provider for Family Member's Serious Health Condition to Triangle Tech reflecting two weeks of consecutive leave and intermittent leave thereafter. On October 13, 2014, Plaintiff McElwee was terminated due to poor performance, as planned.
Under Federal Rule of Civil Procedure 12(b)(6), a defendant may file a motion to dismiss for "failure to state a claim upon which relief can be granted." Such a motion "tests the legal sufficiency of a pleading" and "streamlines litigation by dispensing with needless discovery and factfinding."
Beginning in 2007, the Supreme Court of the United States initiated what some scholars have termed the Roberts Court's "civil procedure revival" by significantly tightening the standard that district courts must apply to 12(b)(6) motions.
Accordingly, after Twombly and Iqbal, "[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'"
The plausibility determination is "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense."
When disposing of a motion to dismiss, a court must "accept as true all factual allegations in the complaint and draw all inferences from the facts alleged in the light most favorable to [the plaintiff]."
As a matter of procedure, the United States Court of Appeals for the Third Circuit has instructed that:
Defendants argue that Plaintiffs' claims under the False Claims Act must be dismissed because they have failed to state a prima facie claim as required under the law. The False Claims Act, 31 U.S.C. § 3729 et al., imposes liability on a person who "knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval."
The False Claims Act also provides relief from retaliatory actions for any employee, contractor, or agent who is "discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against . . . because of lawful acts done by [that person] . . . to stop 1 or more violations" of the False Claims Act.
First, Defendants contend that, because there is no individual liability under the False Claims Act, the counts under the False Claims Act against Defendants McMahon, Waxter, Capuzzi, and Hepburn in their individual capacity must be dismissed. Section 3730(h) of the False Claims Act provides protection to the employee who is discharged or discriminated against "by his or her employer."
Second, Defendants argue that Plaintiffs have failed to articulate a prima facie claim for retaliation under the False Claims Act with regards to Plaintiffs Delbaugh and Beck because they have failed to plead any facts alleging that either Plaintiff engaged in any protected conduct. Plaintiffs, in their brief in opposition to Defendants' motion to dismiss, argue that they sufficiently pled that Plaintiffs Delbaugh and Beck "supported Drumm and McElwee in the protected activity and participated in the OIG investigation."
After review, this Court agrees that Plaintiffs have failed to plead any facts that Plaintiffs Delbaugh and Beck engaged in any protected conduct. The amended complaint pleads the following facts with regard to Plaintiffs Delbaugh and Beck and the OIG investigation: 1) all Plaintiffs, along with all the other employees, were in attendance at the mandatory meeting on August 11, 2014 where Plaintiffs were told someone had filed the Department of Education complaint;
None of these allegations support Plaintiffs' argument that Plaintiffs Delbaugh and Beck were involved in the OIG investigation or were in any way engaged in protected conduct. In addition to the allegations listed above, Plaintiffs cite paragraphs 65-68 of their amended complaint in support for their contention that Plaintiffs Delbaugh and Beck were involved in the investigation. These paragraphs, however, only mention "Plaintiffs" collectively. Plaintiffs make specific allegations directly linking Plaintiffs Drumm's and McElwee's conduct to the OIG investigation but seek to lump all of the Plaintiffs together in alleging that their "actions w[ere] protected conduct . . . under the Fair Claims Act . . ."
Defendants next argue that Plaintiffs have failed to plead any facts that would demonstrate a causal connection between Plaintiffs Drumm's and McElwee's involvement in the OIG investigation. They argue that merely stating that an adverse employment action occurred after protected conduct is insufficient to support a retaliation claim under the Fair Claims Act as a matter of law. Plaintiffs, on the other hand, argue that a causal connection can be shown through a suggestive temporal proximity between the protected activity and the alleged retaliation. Defendants counter that the time between the OIG investigation and the alleged adverse employment action in the instant matter does not suggest retaliation.
As stated above, to survive a motion for summary judgment in a retaliation action under the False Claims Act, a plaintiff must plead sufficient facts to establish that 1) the plaintiff engaged in protected activity, 2) the employer took a materially adverse action against the plaintiff, and 3) there was a causal connection between the protected activity and the employer's action.
In the case at hand, it is undisputed that Plaintiffs have pled sufficient facts to suggest that Plaintiffs Drumm and McElwee were likely engaged in protected activity and that both suffered materially adverse actions in the form of termination from employment. The question here, however, is whether there was a causal connection between the protected activity and the adverse action.
Plaintiffs allege that on June 5, 2014, Plaintiff Drumm was directed to sign and back-date a financial aid document.
On August 11, 2014, the mandatory meeting was held at which Plaintiffs were notified that Defendants knew that a complaint had been filed.
Plaintiffs then make the two following allegations: "McMahon was aware Drumm filed the complaint;" and "[i]t is believed that McMahon was aware that McElwee accompanied Drumm to his meeting with the DOE investigator and provided information."
Plaintiff McElwee was terminated on October 13, 2014.
The Third Circuit has held that where the temporal proximity between protected activity and the adverse action is "unusually suggestive," it is sufficient standing alone to create an inference of causality . . ."
If the time period between the protected activity and the adverse employment action is insufficient to establish unusually suggestive temporal proximity, the plaintiff must plead additional facts that when "looked at as a whole, may suffice to raise the inference."
Plaintiffs merely indicate that Defendants were aware that Plaintiff Drumm made the report and that it is believed that Plaintiff McElwee assisted him. Plaintiffs make no statements indicating how Defendants became aware of Plaintiffs Drumm's and McElwee's protected conduct or what made them believe that Defendants suspected them. They state only that Defendants knew of the protected activity and that the Plaintiffs were then terminated as a result, relying on the argument of temporal proximity.
Plaintiff Drumm made the complaint to the Department of Education on June 18, 2014. Plaintiff McElwee was terminated on October 13, 2014 and Plaintiff Drumm was suspended without pay on November 20, 2014 and then terminated on December 3, 2014. Defendants had notice that the complaint was filed sometime before August 11, 2014, the date on which the mandatory meeting was held. Plaintiffs indicated that Defendant McMahon knew Plaintiff Drumm filed the complaint, but fail to specify the date on which Defendants became aware. It appears that Defendants could have found out that Plaintiff Drumm filed the complaint anytime between July 18, 2014 and November 20, 2014.
Upon a careful reading of Plaintiffs' amended complaint, however, it would seem that Plaintiffs allege that Defendants knew that Plaintiff Drumm had filed the complaint prior to or around August 21, 2014, the date the Department of Education's finding was released. Plaintiffs indicate that shortly after this date, "Defendants began a concerted effort to investigate Plaintiffs (sic) actions in the workplace with the intent of finding a basis for immediate termination."
Accordingly, Plaintiffs' claims pursuant to the False Claims Act are dismissed. The Court will grant leave to permit these Plaintiffs to amend their complaint against Defendant Triangle Temp in order to provide more facts to meet the pleading standard to establish a prima facie case under the False Claims Act.
The intent of the Pennsylvania Whistleblower Law is to protect employees who make good-faith efforts to alert authorities to governmental waste or wrongdoing from retaliation from their employer.
Defendants argue that Plaintiffs' claim under the Pennsylvania Whistleblower Law fails as a matter of law.
The Pennsylvania Whistleblower Law reads as follows:
Defendants argue that this Court must dismiss Plaintiffs' claims under the Pennsylvania Whistleblower Law because Plaintiffs have failed to plead that Defendant Triangle Tech falls within the definition of "employer" under the act. Defendants also argue that Plaintiffs have failed to aver any facts to support the contention that Defendants' actions regarding the financial aid documents fall within the definition of "waste" or "wrongdoing" under the act.
For the purposes of the Pennsylvania Whistleblower Law, an "employer" is defined as either a public body or an individual, partnership, association, for-profit corporation, or not-for-profit corporation that "receives money from a public body to perform work or provide services relative to the performance of work for or the provision of services to a public body."
In their amended complaint, Plaintiffs allege that Defendant Triangle Tech receives federal and state funding to operate as a technical school and is thus a public body under the act.
While the definition of employer is broad, the Pennsylvania Whistleblower Law provides relatively narrow definitions of "waste" and "wrongdoing." "Waste" is defined as "[a]n employer's conduct or omissions which result in substantial abuse, misuse, destruction or loss of funds or resources belonging to or derived from Commonwealth or political subdivision sources."
"Wrongdoing," on the other hand, refers to "[a] violation which is not of a merely technical or minimal nature of a Federal or State statute or regulation, of a political subdivision ordinance or regulation or of a code of conduct or ethics designed to protect the interest of the public or the employer."
In the matter at hand, Plaintiffs plead the following:
After Plaintiff Drumm refused, Plaintiffs allege that "Waxter, or another individual at her direction acquiesced by Defendants, signed and back-dated the document for submission to the DOE."
Considering the amended complaint on its face, it is unclear whether Defendant Triangle Tech actually violated a statute or regulation. Plaintiff does not specifically state which statute or regulation Defendants violated and the Department of Education's finding that "any wrongdoing . . . was corrected" leads this Court to conclude that the Department of Education did not definitively find that Defendants violated a statute or regulation.
Defendants also argue that Plaintiffs have failed to effectively articulate a prima facie claim under the Pennsylvania Whistleblower Law because they failed to establish that Plaintiffs Delbaugh and Beck engaged in any protected activity and Plaintiffs Drumm and McElwee engaged in a protected activity under the Pennsylvania Whistleblower Law. Defendants further contend that Plaintiffs have failed to plead any facts establishing a causal connection between the protected activity and the adverse employment action.
To establish a prima facie case under the Pennsylvania Whistleblower Law, the plaintiff must establish that he made a good faith report of wrongdoing or waste to the appropriate authorities prior to the alleged retaliation.
As discussed at length above with regard to the False Claims Act, Plaintiffs fail to state any facts alleging that Plaintiffs Delbaugh and Beck were in any way engaged in the protected activity. Consequently, their claims under the Pennsylvania Whistleblower Law are dismissed.
Plaintiffs Drumm and McElwee again rely on temporal proximity alone in arguing that the termination of their employment was retaliation for the report to the Department of Education. Six or seven weeks lapsed between the time Defendants began making "concerted effort[s] to investigate Plaintiffs (sic) actions in the workplace with the intent of finding a basis for immediate termination"
Defendants further contend that, if Plaintiffs are making a claim for wrongful termination under Pennsylvania Law, which is unclear in their amended complaint, the claim should be dismissed as a matter of law. "Under Pennsylvania law, an at-will employee of a private sector employer `can be terminated for good reason, bad reason, or no reason at all.'"
Defendants argue that Plaintiffs have failed to allege any specific public policy of the Commonwealth of Pennsylvania that has been violated because of the termination of the Plaintiffs' employment and rely only on a purported violation of federal law. They state that, while the amended complaint contains a vague reference to state law and a reference to the Pennsylvania Whistleblower Law, Plaintiffs essentially rely on violations of federal law and not a law of the Commonwealth of Pennsylvania.
In Kelly v. Retirement Pension Plan for Certain Home Office, the Third Circuit held that, for the public policy exception to apply to the general rule in Pennsylvania, "the alleged violation of public policy must be of Pennsylvania public policy, not solely an alleged violation of federal law."
In their amended complaint, Plaintiffs fail to allege any violation of Pennsylvania law, aside from the Pennsylvania Whistleblower Law, which this Court found inapplicable to the matter at hand because there was no finding of "waste" or "wrongdoing," as required by the statute and subsequent case law. Accordingly, any claim under the public policy exception to the general at-will rule in Pennsylvania is dismissed.
Defendants also argue that Plaintiff McElwee's FMLA violation claim must fail as a matter of law because, while he pleads that he submitted a FMLA certification for two weeks off for the birth of his child, he failed to plead that he submitted a second FMLA certification for the separate and distinct leave he allegedly required after the child was born and he learned of the child's serious medical condition. Therefore, they argue, Plaintiff McElwee failed to satisfy his duties and obligations under the FMLA and was therefore not eligible for any FMLA leave for the child's illness. In their reply brief, Plaintiffs fail to address this argument and simply restate the allegations in the amended complaint in support of their argument that Plaintiff McElwee was terminated for taking his FMLA leave.
The FMLA, 29 U.S.C. § 2601 et al, provides twelve weeks of leave over any twelve-month period to employees experiencing "a serious health condition that makes the employee unable to perform the functions" of the employee's position.
Plaintiffs here, however, allege the opposite. Plaintiffs contend that Plaintiff McElwee requested two weeks off for the birth of his child. The requested leave was granted and he took the leave. Plaintiff McElwee does not plead that he submitted a second request for the additional time off that he required once his child was born with a serious medical issue. Plaintiffs fail to clarify the matter in their brief in opposition. Consequently, this claim must be dismissed.
Finally, Defendants argue that Plaintiffs' requests for punitive damages must be dismissed because of Plaintiffs' failure to allege any factual averments which support a finding that Defendants' alleged conduct rose to the level necessary for an award of punitive damages.
Plaintiffs' punitive damages requests for punitive damages under the Pennsylvania Whistleblower Law and the FMLA fail as a matter of law because punitive damages are unavailable under those statutes.
In accordance with the foregoing analysis, Defendants' motion to dismiss Plaintiffs' complaint in its entirety is granted.
An appropriate Order follows.
