Fruge v. Bd. of Governors of the Fed. Reserve Sys.

Decision Date29 September 2022
Docket NumberCivil Action 1:20-cv-02811 (CJN)
CourtU.S. District Court — District of Columbia

LAURIE FRUGE, Plaintiff,


Civil Action No. 1:20-cv-02811 (CJN)

United States District Court, District of Columbia

September 29, 2022



Plaintiff Laurie Fruge claims that her former employer, the Board of Governors of the Federal Reserve System, unlawfully retaliated against her for making a series of protected disclosures related to misconduct or mismanagement by her supervisors and co-workers. The Board moves for summary judgment, arguing that few of Fruge's disclosures were protected, that there is no causal nexus between any protected disclosure and any adverse employment action, and that, as to the adverse actions it did take, it would have done so even absent her disclosures. The Court agrees and grants summary judgment to the Board.


The Federal Reserve System, the nation's central bank, consists of the Board of Governors, the Federal Open Market Committee, and twelve regional Reserve Banks.[1] The Reserve Banks


are legally distinct entities with separate management. The Board of Governors is a federal government agency divided into more than a dozen divisions. One of those divisions is the Division of Reserve Bank Operations and Payment Systems (RBOPS). It is responsible for overseeing Reserve Bank operations and issuing currency. Eichner Decl. ¶ 1.

When Fruge permanently joined the Board in 2003, her direct supervisor was Michael Lambert. Fruge Tr. at 13:13-15, 14:6-16. After some restructuring, Lambert became her second-level supervisor. Id. at 13:16-19, 14:17-20. Fruge's first-level supervisors changed over the years, but beginning around 2011, her direct supervisor was Shaun Ferrari. Id. at 14:1-11; Def.'s Ex. 10.

From 2003 to February 2019, Fruge worked as an analyst in the RBOPS Division, specifically in the Banknote Issuance and Cash Operations (BICO) group of the Cash Section. Fruge Tr. at 12:15-13:12. She began as a Financial Services Analyst, grade 25, but in 2003 or 2004 she was promoted to Senior Financial Services Analyst, grade 26, and she remained in that grade level through her tenure with the Board. Id. at 14:21-15:18. Fruge audited the Reserve Banks' cash operations and at times participated in system-wide projects. Id. at 16:5-22, 19:1920:7. Her responsibilities involved travel to the banks to work on-site for days at a time and in total about three months out of a year. Id. at 35:21-36:12. For four Reserve Banks each year, the BICO team and RBOPS Division (and thus Fruge) would review the banks' currency operations and assess whether any issues merited a finding that something was amiss. Id. at 20:8-21:2, 24:2026:12. If a finding was made, it would be given one of four severity levels, ranging from minor to highly significant. Id. at 28:7-12. The severity levels lacked “clear-cut definitions,” and reasonable minds could disagree on the appropriate level. Id. at 28:7-29:17. The BICO team


would recommend severity levels, which were submitted to Lambert and division leadership for review and approval. Id. at 25:11-26:16.

Up through the 2014 review cycle, the Board rated employees under its Performance Management Program. The review period ran from October through September, and employees would receive one of five ratings: unsatisfactory, marginal, commendable, outstanding, or extraordinary performance. See Def.'s Ex. 2 at 4737, 4743. In nine review cycles, Fruge was rated “commendable,” and in three she was rated “outstanding,” including the reviews in 2013 and 2014. Def.'s Exs. 2-13.

Fruge was often rated very highly for her job knowledge and her ability to manage her responsibilities. Id. But at the same time she was frequently criticized for her communication and interpersonal skills. Id. In 2003 and 2004, and again in 2009 and 2010, Fruge's reviewers raised significant concerns with her collegiality and perceived aggression and disrespect towards her colleagues. Def.'s Exs. 2-3, 8-9. As one example, Fruge's 2003 performance evaluation noted that she “demonstrates behavior that could easily be interpreted as disrespectful.” Def.'s Ex. 2 at 4743. Fruge did make some effort to improve her communication and, despite some criticisms here and there, she was rated as “meet[ing] expectations” for her interpersonal skills from 2005 to 2014. Def.'s Exs. 4-13.

Shaun Ferrari was hired at the Board around 2004 as a Junior Analyst and Fruge's coworker. Fruge Tr. at 50:5-20. The two initially had a good working relationship. Id. at 51:1114. But over time Fruge noted concerns with Ferrari's conduct, including his engaging in unnecessary business travel, coming to work late and hung over, and charging inappropriate expenses to the Board. Id. at 53:13-58:20. Fruge first reported her concerns to her supervisor, Lorelai Pagano, in about 2009. Id. at 55:13-17. Pagano told Fruge that she had discussed these


concerns with Lambert and Ferrari, but because there was no corroboration of the alleged misconduct, no action would be taken. Id. at 57:18-59:14.

In the 2011 review cycle, Ferrari became Fruge's first-level supervisor and reviewer. See Def.'s Ex. 10. Ferrari noted in that year's review that “section and Reserve Bank staff at times describe[] Laurie as aggressive and argumentative,” and that Fruge's apparent “lack of willingness to update management proactively and continued communication challenges with section and Reserve Bank staff are currently limiting her potential for advancement.” Id. at 4680-81; see also Def.'s Ex. 14 at 7008 (Vice President of Reserve Bank of Kansas City informing Ferrari that Fruge's audit approach “was operationally disruptive because of how demanding, openly critical and intimidating she was,” noting that “she was quick to render a judgment before fully understanding a situation,” and stating that she “was openly critical of staff performance, directly to them and to their coworkers”).

Fruge's communication difficulties continued. In 2012, Ferrari again emphasized that Fruge needed to improve her working relationships with Board and Reserve Bank staff. Def.'s Ex. 11 at 6166. The 2013 evaluation noted Fruge's progress. Def.'s Ex. 12 at 6175. But her 2014 evaluation stated that “communication among section members is at times strained.” Def.'s Ex. 13 at 6181.

Fruge often received feedback about her failure to keep her managers in the loop. See, e.g., Def.'s Exs. 4, 9-10. And her reviewers commented about her inflexibility or lack of inclusion with regard to her colleagues' opinions about substantive work. See Def.'s Ex. 10 at 4679; Def.'s Ex. 11 at 6165; see also Def.'s Ex. 15 at 1342 (Director of RBOPS Louise Roseman believed Fruge was “not politically astute,” “not a people person,” and she “viewed things as black and


white which resulted in her seeing things at the Reserve Banks as more extreme issues than others would have viewed them”).

Jaclyn Hodges joined the Board in 2008. Fruge Tr. at 59:19-20; Def.'s Ex. 19. Over time, Fruge noticed that Hodges became very difficult to work with-constantly questioning decisions and trying to poke holes in presentations to the point of being abusive. Fruge Tr. at 63:3-64:6, 66:8-15. On one team project, Fruge and other team members went to Ferrari to try to remove Hodges because she was so difficult to work with. Id. at 63:6-22. Fruge describes Hodges's communication style as “very accusatory, very critical, very disruptive, very abrasive” towards nearly everyone, but she asserts that Hodges was much kinder to Ferrari and Lambert. Id. at 65:1767:1.

* * *

In late 2014 or early 2015, the division received the results of a “climate survey” and held a meeting to discuss the results. Id. at 85:2-21. At the division meeting, then-RBOPS Division Director Louise Roseman invited employees to meet with her regarding the results or any concerns they had. Id. at 85:16-86:3.

Shortly thereafter, Fruge met with Roseman to raise a long list of workplace grievances. Id. at 84:20-86:10. At the meeting and in a document outlining her concerns, Fruge noted, inter alia, favoritism and poor leadership by Lambert (including inaccurate reviews of Fruge's performance); abuse and poor leadership by manager Genie Foster and Assistant Director Pagano; improper travel and mismanagement by Ferrari; and a romantic relationship between Ferrari and Hodges that Fruge asserted led to undeserved promotions, awards, and perks for Hodges.[2] See id.


at 86:8-10; Def.'s Exs. 17-18. At this time, Ferrari was still Fruge's first-level supervisor and Lambert was her second-level supervisor. Hodges was still Fruge's colleague in the BICO group; although she had begun her tenure a grade junior to Fruge in 2008, by that time she was two grades above Fruge. Def.'s Exs. 1, 19.

Director Roseman referred the allegations to the head of Employee Relations, Allison

Dichoso, and in February 2015 Dichoso questioned Ferrari about his conduct. See Def.'s Exs. 18, 20-22. The Employee Relations team also told Fruge that Ferrari and Hodges would be interviewed regarding the allegations. See Def.'s Ex. 23; Fruge Tr. at 83:3-5. Evidence suggests Ferrari and Hodges were informed about these allegations. Fruge Tr. at 82:3-8; Def.'s Ex. 31.

Fruge raised an extensive list of issues, but the record suggests her primary focus was why certain individuals had been promoted while she had not. See Def.'s Ex. 24; Def.'s Ex. 25 (requesting that Employee Relations investigate her non-promotion as well as the promotion practices in her division); see also Def.'s Ex. 23 at 431 (explaining Fruge's rejection of the suggestion to go to the Board's Equal Employment Opportunity group “if harassment was really the issue” and that Fruge “kept saying she does more than what her job involves and that she should be promoted”); Def.'s Ex. 26 at 273 (“[Fruge's] perception of a...

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