McBride v. Peak Wellness Ctr., Inc.

• Decision Date: 06 August 2012
• Docket Number: No. 11–8037.,11–8037.
• Parties: Lisa G. McBRIDE, Plaintiff–Appellant, v. PEAK WELLNESS CENTER, INC., Defendant–Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

688 F.3d 698

115 Fair Empl.Prac.Cas. (BNA) 1185

34 IER Cases 228

19 Wage & Hour Cas.2d (BNA) 757

Lisa G. McBRIDE, Plaintiff–Appellant,

v.PEAK WELLNESS CENTER, INC., Defendant–Appellee.

No. 11–8037.

United States Court of Appeals,Tenth Circuit.

Aug. 6, 2012.

Bruce S. Asay, Associated Legal Group, LLC, Cheyenne, WY, for Plaintiff–Appellant.

Patrick E. Hacker (Gregory P. Hacker with him on the brief), Hacker, Hacker & Kendall, P.C., Cheyenne, WY, for Defendant–Appellee.

Before KELLY, BALDOCK, and TYMKOVICH, Circuit Judges.

TYMKOVICH, Circuit Judge.

Lisa McBride is an accountant who worked as Peak Wellness Center's business manager for about nine years. Peak terminated her in 2009, citing job performance and morale issues. McBride, however, claims she was terminated in retaliation for bringing various accounting improprieties to the attention of Peak's Board of Directors.

McBride brought several federal and state-law claims against Peak, among them (1) whistleblower retaliation under the federal False Claims Act (FCA); (2) violations of the federal Fair Labor Standards Act (FLSA); (3) breach of employment contract; (4) breach of implied covenant of good faith and fair dealing; (5) defamation; and (6) a federal sex discrimination claim under Title VII of the Civil Rights Act. After discovery, Peak moved for summary judgment on all claims, and the district court granted the motion. McBride appeals the grant of summary judgment, arguing that significant issues of material fact remain unresolved and that her claims should proceed to trial. She also appeals the district court's denial of an evidentiary motion.

Finding no error in the district court's decision, we AFFIRM its grant of summary judgment in favor of Peak.

I. Background

McBride, a certified public accountant, served for nine years as the business manager of Peak, a non-profit drug rehabilitation center in Laramie County, Wyoming. Peak received much of its funding from federal and state grants, and one of McBride's job responsibilities was to ensure that Peak's use of grant money complied with applicable accounting principles.

McBride was also responsible for coordinating periodic audits performed by external private entities. McBride claims she notified Peak regarding possible improprieties in the use of grant money, but that her efforts to address these concerns were met with resistance and retaliation.

The record indicates that McBride did not get along with some of her coworkers. Emails among Peak employees reveal that some viewed McBride as meddlesome; for example, one coworker became angry when McBride contacted one of Peak's vendors regarding deficiencies in invoices the vendor had submitted to the coworker. Other emails included personal insults directed at McBride behind her back.

McBride also experienced friction in her relationship with her supervisor, Dr. Birney, who was Peak's executive director. According to Birney, McBride failed to bring her concerns regarding grant money accounting to him. Instead, McBride went over his head and raised her concerns directly in front of the Board of Directors. Birney was also concerned about McBride's job performance and her impact on employee morale.

In the years leading up to her termination, McBride received several negative performance reviews. These reviews included suggestions for improvement, but subsequent reviews did not reflect any progress. Peak ultimately terminated McBride in January 2009.

About two months after she was terminated, McBride requested a Board of Directors review of her termination. Her request also included allegations of fraud committed by other Peak employees, including Birney. The Board commenced an internal investigation, but found no evidence of fraud. After concluding its investigation, the Board decided not to re-hire McBride.

McBride sued Peak, bringing the aforementioned claims under federal and state law. The district court granted summary judgment in favor of Peak on all claims.

II. Discussion

A. Standard of Review

“We review the district court's summary judgment decision de novo, applying the same standard as the district court.” Brammer–Hoelter v. Twin Peaks Charter Acad., 602 F.3d 1175, 1184 (10th Cir.2010). “In applying this standard, we examine the factual record and draw reasonable inferences therefrom in the light most favorable to the nonmoving party,” that is, McBride. Id. (quoting Clinger v. N.M. Highlands Univ. Bd. of Regents, 215 F.3d 1162, 1165 (10th Cir.2000)).

In addition to the grant of summary judgment, McBride appeals the district court's denial of expanded discovery. “We review the district court's discovery order for abuse of discretion. A district court abuses its discretion where it commits a legal error or relies on clearly erroneous factual findings, or where there is no rational basis in the evidence for its ruling.” Trentadue v. FBI, 572 F.3d 794, 806 (10th Cir.2009) (citations and quotation marks omitted). The moving party—McBride—bears the burden of showing the district court abused its discretion.

B. McBride's Claims

McBride challenges the district court's dismissal of six distinct causes of action.

1. False Claims Act Whistleblower Retaliation

McBride first claims Peak terminated her because Peak believed McBride was considering bringing an FCA qui tam suit against Peak. McBride argues this constituted illegal retaliation under the whistleblower provisions of the FCA.

The FCA imposes liability on any person who “knowingly presents, or causes to be presented, to an officer or employee of the United States Government ... a false or fraudulent claim for payment or approval,” 31 U.S.C. § 3729(a)(1), or “knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government,” § 3729(a)(2). The FCA authorizes individuals to bring qui tam suits on behalf of the government and keep a percentage of any monies recovered.

Since employees will often be in the best position to report frauds perpetrated by their employers, the FCA includes “whistleblower” provisions protecting employees who do so from retaliation. Whistleblowers are entitled to reinstatement, double back pay, and litigation costs and attorneys' fees. § 3730(h)(2). An employee need not actually file a qui tam action to qualify for whistleblower protection, but “the activity prompting plaintiff's discharge must have been taken ‘in furtherance of’ an FCA enforcement action.” United States ex rel. Ramseyer v. Century Healthcare Corp., 90 F.3d 1514, 1522 (10th Cir.1996).

In addition, a plaintiff claiming retaliatory discharge under the FCA “has the burden of pleading facts which would demonstrate that defendants had been put on notice that plaintiff was either taking action in furtherance of a private qui tam action or assisting in an FCA action brought by the government.” Id. Notice may be provided in a number of ways: for example, by informing the employer of “illegal activities” that would constitute fraud on the United States, United States ex rel. Marlar v. BWXT Y–12, LLC, 525 F.3d 439 (6th Cir.2008); by warning the employer of regulatory noncompliance and false reporting of information to a government agency, Wilkins v. St. Louis Hous. Auth., 314 F.3d 927 (8th Cir.2002); or by explicitly informing the employer of an FCA violation, Eberhardt v. Integrated Design & Constr. Inc., 167 F.3d 861, 867 (4th Cir.1999). But merely informing the employer of regulatory violations, without more, does not provide sufficient notice, because doing so gives the employer “no suggestion that [the plaintiff is] going to report such noncompliance to government officials” or bring “her own qui tam action.” Ramseyer, 90 F.3d at 1523. Whistleblowers “must make clear their intentions of bringing or assisting in an FCA action in order to overcome the presumption that they are merely acting in accordance with their employment obligations.” Id. at 1523 n. 7.

The record includes only one piece of evidence in support of McBride's assertion that Peak believed she was considering bringing an FCA action: an email to Birney from Valerie Seigel, Peak's information technology director. Seigel told Birney that, based on conversations she had with other employees, “it appears [McBride] is preparing a presentation for the auditors on how terrible [Peak] is, not just the computer system but our administration in general,” and “she was checking our Policies to see where you are out of compliance.” Supp. App. at 124.

Seigel's email to Birney was insufficient to put Peak on notice that McBride might pursue a qui tam action. First, statements about “how terrible [Peak] is” and lack of compliance with Peak's internal policies does not amount to an accusation of illegal, let alone fraudulent, conduct. Second, communicating with auditors was part of McBride's job; thus, her doing so would not indicate that she was planning to report illegal activities or initiate a qui tam action. Third, Peak's auditor was a private entity, not a government entity, which further undercuts the inference that Peak could have believed McBride was going to report Peak's alleged improprieties to the government.

Without a clearer indication that McBride was planning to report Peak to the government or file a qui tam suit, McBride's retaliation claim cannot survive summary judgment. See Ramseyer, 90 F.3d at 1522.

2. Fair Labor Standards Act Claim

McBride next claims Peak violated the FLSA by deducting time from her accrued leave on days when she did not work a full 8–hour day. She argues the FLSA forbids employers from deducting such time from salaried employees, as McBride was. She seeks to recover the value of the accrued leave wrongfully deducted.

The FLSA refers to salaried employees like McBride as “exempt” employees. Since exempt employees are not paid by the hour, the FLSA's implementing regulations prohibit employers from docking their pay for working less...