On July 20, 2022, the Tenth Circuit affirmed a $1 million jury award to a former employee who claimed he was demoted in retaliation for reporting that his supervisor instructed him to falsify test results on a program used by the U.S. military.  Casias v. Raytheon Co., Nos. 21-1195 and 21-1205 (10th Cir. 2022).

Background

Plaintiff alleged that his supervisor instructed him to change certain data on a GPS project designed for the U.S. Air Force, which made the project appear more successful.  Plaintiff allegedly complied and then immediately notified leadership of his superior’s instruction.  A few months later, Plaintiff was reassigned from his testing role, where he managed dozens of employees, to a minor role managing only two employees.  Plaintiff eventually accepted a position at a different defense contractor where his salary, benefits and rank were lower.

Plaintiff filed suit in the U.S. District Court for the District of Colorado alleging various claims, including a claim under the Defense Contractor Whistleblower Protection Act (“DCWPA”).  The jury found for Plaintiff, and awarded him $43,000 in backpay and $1,000,000 in noneconomic damages.  The district court struck the backpay award but confirmed the noneconomic damages award.  The company filed a motion for judgment notwithstanding the verdict and remittitur after trial, arguing: (1) Plaintiff did not show an adverse employment action or causation; (2) the noneconomic damages were excessive; and (3) the weight of evidence was against Plaintiff.

Ruling

On appeal, the Tenth Circuit affirmed the $1 million jury award, finding that Plaintiff presented enough evidence for a reasonable jury to find for him on all of the issues appealed.  First, the Tenth Circuit found that it was reasonable for the jury to infer Plaintiff suffered an adverse employment action because Plaintiff’s reassignment was a change in responsibilities with a decrease in reputation and job prospects, and Plaintiff was hired at a lower rank and salary at his subsequent job.  Second, the jury could reasonably infer Plaintiff’s superior retaliated against him, even though the superior lacked a personal reason for doing so.  Finally, the Tenth Circuit found the damages were not excessive because the act of falsifying information used by the U.S. military could have far reaching repercussions, and retaliating against an employee for reporting that falsification is a serious violation of the DCWPA.  Although the $1 million jury award was indeed large, the Tenth Circuit found that the award did not represent a “miscarriage of justice” given the circumstances.

Implications

This sizeable adverse jury verdict highlights the risks that employers may face in trying whistleblower retaliation suits to a jury and may lead to further similar lawsuits.

Posted in Defense Contractor Whistleblower Protection Act
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Photo of Steven J. Pearlman Steven J. Pearlman

Steven J. Pearlman is a partner in the Labor & Employment Law Department, where he is Head of the Restrictive Covenants, Trade Secrets & Unfair Competition Group and Co-Head of the Whistleblowing & Retaliation Group.

Employment, Restrictive Covenant & Trade Secret, and Whistleblower…

Steven J. Pearlman is a partner in the Labor & Employment Law Department, where he is Head of the Restrictive Covenants, Trade Secrets & Unfair Competition Group and Co-Head of the Whistleblowing & Retaliation Group.

Employment, Restrictive Covenant & Trade Secret, and Whistleblower Practice. Steven’s national practice focuses on defending companies in federal and state courts and in arbitration fora against the full spectrum of employment-related claims, including claims of executives; restrictive covenant violations; employee raiding; theft of trade secrets; whistleblower retaliation under the Sarbanes-Oxley Act, the Dodd-Frank Act and similar state laws; and wage-and-hour violations, including class, collective and PAGA actions.

Steven has successfully handled trials in multiple jurisdictions; prevailed in seeking and defending against applications for temporary restraining orders and preliminary injunctions; defended one of the largest Illinois-only class actions in the history of the federal courts in Illinois (over 90k putative class members); and prevailed following his oral arguments before federal and state appellate courts. He brings his litigation experience (beginning in 1998) to bear in counseling clients to minimize risk and avoid or prepare for success in litigation.

Investigations. Reporting to boards of directors, their audit committees, CEOs and in-house counsel, Steven conducts sensitive investigations and has the unusual experience of testifying in federal court in connection with investigations. His investigations have involved complaints of sexual harassment involving C-suite officers; systemic violations of employment laws and company policies; and fraud, compliance failures and unethical conduct.

Thought Leadership and Accolades. Steven was named Lawyer of the Year for Chicago Labor & Employment Litigation in the 2023 edition of The Best Lawyers in America. He is a Fellow of the College of Labor and Employment Lawyers. Chambers has reported:

  • Steven is “one of the best in the country and has a lot of experience”;
  • Steven is as an “outstanding lawyer” who is “very sharp and very responsive,” a “strong advocate,” and an “expert in his field”;
  • He is thoughtful, attentive and demonstrates an acute understanding of matters top of mind for business-minded general counsel; and
  • “He is someone who can navigate the twists and turns of litigation without difficulty.”

Steven was 1 of 12 individuals selected by Compliance Week as a “Top Mind.” Earlier in his career, he was 1 of 5 U.S. lawyers selected by Law360 as a ”Rising Star Under 40” in the area of employment law and 1 of “40 Illinois Attorneys Under Forty to Watch” selected by Law Bulletin Publishing Company. Steven is a U.S. Library of Congress Burton Award Winner for “Distinguished Legal Writing.”

Steven was appointed to Law360’s Employment Editorial Advisory Board and selected as a Contributor to Forbes.com. He has appeared on Bloomberg News (television and radio) and Yahoo! Finance, and is often quoted in leading publications such as The Wall Street Journal. The U.S. Chamber of Commerce has engaged Steven to serve as lead counsel on amicus briefs to the U.S. Supreme Court and federal circuit courts of appeal.

In 2024, Steven received the Excellence in Pro Bono Service Award from the United States District Court for the Northern District of Illinois and the Chicago Chapter of the Federal Bar Association.

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