On August 26, 2022, the Third Circuit affirmed a grant of summary judgment in favor of an employer, holding that whistleblower retaliation protections in the False Claims Act did not protect an employee from being discharged for harassing a co-worker.  Crosbie v. Highmark Inc., et al., No. 21-1641.

Background

Plaintiff was a fraud investigator for a health insurance company.  In 2017, he reported to his managers his discovery that some doctors in the company’s network had been convicted for selling opioid prescriptions, and that other doctors lacked required Medicaid licenses.  The managers investigated the concerns but decided not to take any action and told him to drop it, even after Plaintiff repeatedly pressed the issue.

On October 1, 2018, Plaintiff’s co-worker lodged a harassment complaint, alleging that Plaintiff called her “Miss Piggy” and “oinked” at her.  Human Resources then conducted an investigation, during which an eyewitness corroborated the complainant’s story.  The HR investigator also spoke with one of the managers who allegedly told Plaintiff to drop the fraud issue.  The manager stated that although he normally would have questioned the harassment allegations, he believed the allegations were true because he had heard Plaintiff make “coughing” and “snorting” noises earlier that day.  HR then terminated Plaintiff’s employment.

Plaintiff filed suit in the U.S. District Court for the Eastern District of Pennsylvania under the FCA, claiming he was discharged in retaliation for reporting potential fraud.  The company argued that the people in HR who decided to discharge Plaintiff knew nothing about his fraud reports and discharged him for a valid reason—for harassing a co-worker.  The district court granted summary judgment in the company’s favor, concluding that Plaintiff had failed to show “that the employers’ reason was a mere pretext for retaliation.”

Ruling

On appeal, the Third Circuit affirmed.  First, the court concluded that even if the investigation was imperfect, Plaintiff did not present any evidence that the “investigation was so thoroughly flawed that a jury could find [the investigation] unbelievable.”  Second, the timing between Plaintiff’s fraud reports and his termination did not support an inference of pretext because Plaintiff had initially reported the potential fraud more than one year before his discharge, and his last complaint was submitted one month prior.  The court also concluded that Plaintiff could not establish a causal connection between his protected activity and subsequent termination because the HR team that fired him was unaware of Plaintiff’s fraud reports.

The court also rejected Plaintiff’s argument that his manager had used the harassment investigation as a “cat’s-paw.”  Under a cat’s-paw theory, an employee must show that a non decision-maker harbored retaliatory animus and induced a decision-maker to act against the employee.  Plaintiff’s cat’s-paw theory failed because: (i) Plaintiff offered no evidence that his manager wanted to discharge him; and (ii) there was no indication that the HR investigator, who interviewed several other witnesses, was influenced by or relied on the manager’s interview in deciding to discharge Plaintiff.

Implications

This decision serves as a reminder that although anti-retaliation protections under the FCA are broad, employers maintain the right to discipline employees who engage in misconduct in the workplace—even if they are whistleblowers.