Faulkner v. United Technologies Corp., Sikorsky Aircraft Div.

• Citation: 240 Conn. 576,693 A.2d 293
• Decision Date: 22 April 1997
• Docket Number: No. 15475,15475
• Court: Supreme Court of Connecticut
• Parties: , 65 USLW 2703, 12 IER Cases 1334 John FAULKNER v. UNITED TECHNOLOGIES CORPORATION, SIKORSKY AIRCRAFT DIVISION et al.

Page 293

693 A.2d 293

240 Conn. 576, 65 USLW 2703, 12 IER

Cases 1334

John FAULKNER v. UNITED TECHNOLOGIES CORPORATION, SIKORSKY AIRCRAFT DIVISION et al.

No. 15475.

Supreme Court of Connecticut.

Argued Feb. 18, 1997.

Decided April 22, 1997.

Richard W. Gifford, West Hartford, for appellant (plaintiff).

Felix J. Springer, with whom, on the brief, was Michael K. Murray, Hartford, for appellee (named defendant).

Before CALLAHAN, C.J., and BORDEN, BERDON, NORCOTT and KATZ, JJ.

CALLAHAN, Chief Justice.

The plaintiff, John Faulkner, appeals ¹ from the judgment of the trial court, Freed, J., rendered in favor of the named defendant United Technologies Corporation, Sikorsky Aircraft Division, ² after the court, Corradino, J., struck the first count of the plaintiff's substitute complaint. In that count, the plaintiff alleged that the defendant breached the implied covenant of good faith and fair dealing in their employer-employee relationship by discharging him for refusing to participate in a scheme to defraud the United States government. The plaintiff claims that his discharge for refusing to participate in the scheme violated public policy against government contract fraud as expressed in the Major Frauds Act. 18 U.S.C. § 1031. He argues that the trial court improperly struck the first count of his substitute complaint on the ground that it failed to allege a connection between the public policy expressed in the federal statute and the public policy of the state of Connecticut. We reverse the judgment of the trial court and remand the case for further proceedings.

The first count of the plaintiff's substitute complaint alleged the following relevant facts. The plaintiff worked for the defendant as a supplier quality assurance representative from October 2, 1978, until April 29, 1991, when he was discharged by the defendant. The plaintiff's job involved inspecting helicopter parts provided by various suppliers to ensure that the parts met with the defendant's engineering specifications. As part of his job, he was required to inspect parts supplied by subcontractors that were to be used in constructing United States Army Blackhawk helicopters that the defendant was producing pursuant to contracts with the federal government. On numerous occasions, the plaintiff rejected substandard and defective parts provided by suppliers despite pressure from the suppliers and from his superiors to accept the parts. The plaintiff reported the existence of the defective parts to his superiors, who did nothing constructive in response, but instead warned the plaintiff that he might be disciplined in the future for rejecting parts he deemed defective. Thereafter, the allegedly defective parts were used in the construction of various Blackhawk helicopters.

On April 29, 1991, the defendant discharged the plaintiff on the ground that he had engaged in misconduct. In his complaint, the plaintiff alleged that the defendant actually discharged him because he refused to accept the substandard and defective helicopter parts supplied by the defendant's subcontractors on the Blackhawk helicopter project. He alleged further that the defendant discharged him because he refused to participate in allowing the use of the defective parts in producing helicopters under the government contract. He claimed that the defendant's action constituted a breach of the covenant of good faith and fair dealing existing between the parties because the discharge violated public policy against government contract fraud as expressed in the Major Frauds Act. 18 U.S.C. § 1031(a). ³

The trial court construed the first count of the plaintiff's substitute complaint as alleging a wrongful discharge claim pursuant to the public policy limitation on the at-will employment doctrine, as enunciated in Sheets v. Teddy's Frosted Foods, Inc., 179 Conn. 471, 427 A.2d 385 (1980), and its progeny. The court determined that, when a plaintiff brings such a claim charging a violation of public policy as expressed in a federal statute, the plaintiff must allege in his complaint that that violation of federal public policy also interfered with an important state interest. The court stated: "[T]here must be a substantial connection between the federal law that is violated and the state's own public policies. The federal law must protect an interest that has a substantial impact on state concerns." Because the plaintiff had failed to include in his complaint an allegation that his discharge implicated state public policy concerns, the trial court granted the defendant's motion to strike.

" 'The purpose of a motion to strike is to contest ... the legal sufficiency of the allegations of any complaint ... to state a claim upon which relief can be granted. In ruling on a motion to strike, the court is limited to the facts alleged in the complaint. The court must construe the facts in the complaint most favorably to the plaintiff.' ... If facts provable in the complaint would support a cause of action, the motion to strike must be denied." (Citations omitted.) Waters v. Autuori, 236 Conn. 820, 825-26, 676 A.2d 357 (1996). We conclude that the allegations of the plaintiff's substitute complaint, if proved, would constitute a viable cause of action.

In Sheets v. Teddy's Frosted Foods, Inc., supra, 179 Conn. at 480, 427 A.2d 385, in an effort to balance the competing interests of employers and employees, we recognized a public policy limitation on the traditional employment at-will doctrine. ⁴ Antinerella v. Rioux, 229 Conn. 479, 492, 642 A.2d 699 (1994). In Sheets, we sanctioned a common law cause of action for wrongful discharge in situations in which the reason for the discharge involved "impropriety ... derived from some important violation of public policy." Sheets v. Teddy's Frosted Foods, Inc., supra, at 475, 427 A.2d 385; see Morris v. Hartford Courant Co., 200 Conn. 676, 679, 513 A.2d 66 (1986); Magnan v. Anaconda Industries, Inc., 193 Conn. 558, 572, 479 A.2d 781 (1984). In Morris v. Hartford Courant Co., supra, at 680, 513 A.2d 66, we recognized the "inherent vagueness of the concept of public policy" and the difficulty encountered when attempting to define precisely the contours of the public policy exception. In evaluating claims, "[w]e look to see whether the plaintiff has ... alleged that his discharge violated any explicit statutory or constitutional provision ... or whether he alleged that his dismissal contravened any judicially conceived notion of public policy." (Internal quotation marks omitted.) Antinerella v. Rioux, supra, at 492, 642 A.2d 699, quoting Morris v. Hartford Courant Co., supra, at 680, 513 A.2d 66.

The plaintiff, in his substitute complaint, alleged that the defendant discharged him in violation of the public policy against government contract fraud expressed in the Major Frauds Act. 18 U.S.C. § 1031. ⁵ The Major Frauds Act "criminalizes the knowing execution or attempted execution of a scheme or artifice in order to defraud the [United States]." United States v. Frequency Electronics, 862 F.Supp. 834, 838 (E.D.N.Y.1994). The act "targets schemes to defraud the United States in connection with procurement contracts executed by (1) prime contractors with the United States, or (2) subcontractors or suppliers on contracts in which there is a prime contract with the United States," if the value of the contract upon which the fraud is based is $1,000,000 or more. United States v. Nadi, 996 F.2d 548, 551-52 (2d Cir.1993). The act provides for the imposition of fines up to a maximum of $10,000,000 and for imprisonment up to a maximum of ten years. See footnote 3. Congress enacted the Major Frauds Act "to curtail the ubiquitous and rampant fraud in the defense procurement area, 'born of greed in the private sector and inefficiency and acquiescence by the [f]ederal [g]overnment.' " United States v. Frequency Electronics, supra, 862 F.Supp. at 838, quoting Pub.L. No. 101-123, 1989 U.S.C.C.A.N. (103 Stat. 759) 593. The Joint Committee on the Judiciary asserted that procurement fraud was the most costly type of fraud being perpetrated against the federal government. S.Rep. No. 100-503, 2d Sess., 1-2 (1988); H.R.Rep. No. 100-610, 2d Sess., 3-4 (1988). The committee also noted the evils associated with the practice of "product substitution"--in which contractors provide defective products to the federal government--asserting that defense contractors that engage in "product substitution" endanger the lives of American soldiers and threaten national security. S.Rep. No. 100-503, supra, 2; see also H.R.Rep. No. 100-610, supra, 4.

Construing the plaintiff's substitute complaint in the manner most favorable to the plaintiff; Waters v. Autuori, supra, 236 Conn. at 825-26, 676 A.2d 357; we read the complaint as alleging that the defendant was involved in a scheme to defraud the federal government by providing the government with Blackhawk helicopters that were constructed using substandard and defective parts. The complaint alleged that the defendant was producing the helicopters under a government contract, ⁶ and that the defendant knew that it was using defective parts in the construction of the helicopters. As alleged in the complaint, the defendant's actions appear to constitute precisely the type of conduct that Congress intended to deter and punish by enacting the Major Frauds Act. In addition, the complaint alleged that the defendant discharged the plaintiff because he refused to approve the use of the defective parts. In sum, the complaint alleged that the defendant discharged the plaintiff because he refused to participate in violating 18 U.S.C. § 1031.

In Sheets, we stated that "an employee should not be put to an election whether to risk criminal sanction or to jeopardize his continued employment." Sheets v. Teddy's Frosted Foods, Inc., supra, 179 Conn. at 480, 427 A.2d 385. This appeal requires us to determine whether that proposition applies...