Mayo v. Questech, Inc.

• Citation: 727 F. Supp. 1007
• Decision Date: 27 December 1989
• Docket Number: Civ. A. No. 89-0987.
• Court: U.S. District Court — Eastern District of Virginia
• Parties: William L. MAYO, Plaintiff, v. QUESTECH, INC., et al., Defendant.

727 F. Supp. 1007

William L. MAYO, Plaintiff, v. QUESTECH, INC., et al., Defendant.

Civ. A. No. 89-0987.

United States District Court, E.D. Virginia, Alexandria Division.

December 27, 1989.

Thomas J. Curcio, Cohen, Dunn & Sinclair, Alexandria, Va., Lawrence Z. Lorber, J. Robert Kirk, Kelly Drye & Warren, Washington, D.C., for plaintiff.

Norman H. Singer, Daniel G. Grove, Keck, Mahin & Cate, Washington, D.C., for defendant.

MEMORANDUM OPINION

ELLIS, District Judge.

Introduction

In its present posture, this employment contract and discrimination dispute presents two questions that are as yet unsettled in this Circuit. First, because the individuals named in the complaint were not named by plaintiff as respondents in the Equal Employment Opportunity Commission ("EEOC") proceeding concerning his discrimination claim, the question arises whether they are proper defendants in plaintiff's Title VII¹ claim here. The second question is whether the "Whistleblower" statute, 10 U.S.C. § 2409, affords plaintiff and others a private cause of action.

The matter is before the Court on defendants' motion to dismiss pursuant to Rules 12(b)(1) and 12(b)(6), Fed.R.Civ.P. The questions have been briefed and argued and are ripe for disposition. For the reasons stated here, the Court concludes that in the circumstances of this case, the failure to name the individual defendants as respondents in the EEOC proceeding is no bar to their being named here as Title VII defendants. Further, the Court concludes that the Whistleblower statute's language, legislative history and purpose all point persuasively to the absence of any private right of action.

Facts²

This action arises from the discharge of plaintiff, William M. Mayo, from his position as President and Chief Executive Officer ("CEO") of defendant QuesTech, Inc. Mayo, a District of Columbia resident, alleges, inter alia, that his discharge violated Title VII and the federal Whistleblower statute.

QuesTech is a publicly-held Virginia corporation engaged in providing technical and professional services to the federal government, especially the Department of Defense and the National Aeronautics and Space Administration. At the time of Mayo's discharge, QuesTech employed approximately 1000 persons and had gross annual revenues of approximately $70 million. The individual defendants are variously Virginia and Maryland citizens who served as directors of QuesTech during the period relevant to plaintiff's claims. One, John L. McLucas, served as QuesTech's Board Chairman. Other director defendants held positions, subordinate to plaintiff's, as officers of QuesTech or as officers and directors of one or more of QuesTech's divisions or subsidiaries.

In early 1987, QuesTech began recruiting Mayo to become QuesTech's President and CEO. At the time, Mayo was President of Comsat General Corporation ("Comsat") and was earning an annual salary of $140,000 plus substantial benefits. Mayo's position at Comsat was secure and he had no plans to leave that company or to look for other employment. To entice Mayo, QuesTech assured him that the President and CEO positions at QuesTech would provide him with an opportunity for significant professional, personal and financial growth. QuesTech told Mayo, however, that the company's needs would require Mayo to make a commitment to remain at QuesTech's helm for some minimum period of time. Negotiations followed. In March 1987, Mayo accepted QuesTech's offer to become President and CEO of the company, as well as a member of its Board of Directors for a period of no less than three years. Mayo's initial yearly compensation was set at $150,000 plus an annual director's fee of $20,000 and an annual incentive bonus based on the company's performance.

Plaintiff commenced his duties at QuesTech in May of 1987. During the year that followed, QuesTech posted its best-ever financial results. Profits for the first three quarters of 1988 substantially exceeded those for the same period in 1987. In recognition of this, QuesTech's Board raised Mayo's salary $15,000 per year.

During this period, Mayo initiated several actions to correct what he viewed as improprieties in the conduct of several QuesTech directors. Specifically, Mayo investigated reports he received from Chairman McLucas, one of the named director defendants, that one or more of the other individual director defendants³ were having illicit sexual relationships with subordinate female employees of the company. The reports included information that in furtherance of those illicit relationships, the directors involved were diverting corporate funds to compensate the women either during, or upon dissolution of, the relationships. When Mayo confirmed the existence of some of these relationships and the related financial arrangements, he demanded that the directors involved halt the improper activities. Thereafter, Mayo continued his investigative efforts. In this connection he discovered that some of the individual defendant directors used abusive, sexually derogatory language with respect to female employees. Further, he learned that the illicit relationships interfered with employees' work performance and created a hostile and offensive working environment for all employees.

Mayo's investigation of improprieties at QuesTech was not limited to ferreting out illicit relationships and sexually harassing conduct; he also uncovered false or fraudulent claims or charges to the government by a QuesTech subsidiary in the course of administering federal government contracts and subcontracts. Mayo promptly and voluntarily disclosed the results of his investigation to the government. Thereafter, he continued to monitor and investigate whether QuesTech had made other false or fraudulent claims to the government. Mayo's investigation and reform activities also extended to the defendant director's disposition of their QuesTech stock holdings. Specifically, Mayo took action to address the failure of certain director defendants to disclose to the public their efforts to sell their substantial QuesTech stock holdings.

In March 1988, at the request of one or more of the director defendants, Mayo recommended to QuesTech's Board that one of the individual defendant directors, William E. Bigler, Jr., be terminated as Executive Vice-President/Finance and Administration, Secretary and Treasurer of QuesTech, as a result of improper and abusive treatment of subordinate females employees. The Board accepted Mayo's recommendation and authorized QuesTech to enter into a resignation agreement with Bigler containing a provision obligating Bigler not to retaliate against QuesTech or any of its directors in connection with his resignation. Bigler accepted the agreement, resigned and vacated his corporate offices. But for reasons not yet in the record, he remained a director of QuesTech throughout the period relevant to this action.

Mayo's reform efforts understandably made him singularly unpopular with many of QuesTech's officers and directors. On October 28, 1988, QuesTech's directors convened a special Board meeting to consider Mayo's removal. Mayo was present at the meeting. As a result of this meeting, the Board voted to terminate Mayo, but gave no reason for this action. In response to his termination, Mayo filed an eight-count complaint in this Court against QuesTech and the directors alleging various violations of federal and state law.⁴ The causes of action germane to this proceeding are claims under (i) Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq. and (ii) the Whistleblower statute, 10 U.S.C. § 2409(a).⁵

Defendant moved to dismiss plaintiff's complaint for lack of subject matter jurisdiction, pursuant to Rule 12(b)(1), Fed.R. Civ.P., or for failure to state a claim for which relief can be granted, pursuant to Rule 12(b)(6), Fed.R.Civ.P. After hearing oral argument, the Court took the matter under advisement and directed the parties to submit supplemental memoranda addressing (i) whether certain individual defendant directors are proper defendants in the Title VII claim where those defendant directors were not specifically named in the predicate EEOC proceeding; (ii) whether 10 U.S.C. § 2409(a) affords individuals a private cause of action; and (iii) whether the Court should decide plaintiff's state claims under the doctrine of pendent jurisdiction according to United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966). The parties each submitted supplemental memoranda and the issues are now ripe for disposition.

ANALYSIS

I. Title VII's Naming Requirement

Under Title VII, a civil action may be brought after administrative proceedings have ended or conciliation attempts have failed, only "against the respondent named in the administrative charge." 42 U.S.C. § 2000e-5(f)(1). Mayo's administrative charge in the EEOC named QuesTech, but not the individual director defendants. Whether this failure to name the individual defendants in the EEOC charge bars a subsequent civil action against them is a question that has never been squarely decided by the Supreme Court or the Fourth Circuit. But abundant authority from other circuits suggests that, under the facts of this case, Mayo's failure to name the defendants specifically is not fatal to his present civil suit.

The threshold issue is whether the naming requirement is jurisdictional and, as such, not waivable.⁶Zipes v. Trans World Airlines, 455 U.S. 385, 102 S.Ct. 1127, 71 L.Ed.2d 234 (1982), teaches that filing a timely charge with the EEOC is not jurisdictional, but is subject to equitable considerations. The "failure to name" issue was neither presented nor addressed in Zipes. Nonetheless, other courts have interpreted Zipes to mean that the naming requirement is similarly not jurisdictional.⁷ Courts have also implicitly held that a failure to name is not a jurisdictional prerequisite by allowing...