On November 18, 2014, the U.S. Court of Appeals for the Sixth Circuit issued a decision dismissing an employment applicant’s claims that he had been retaliated against under the False Claims Act (FCA), Environmental Reorganization Act (ERA) and four other environmental statutes. In Vander Boegh v. Energy Solutions, Inc., 14-5047 (6th Cir. Nov. 18, 2014), the Court of Appeals considered for the second time allegations arising from the decision not to hire the Plaintiff. The Plaintiff had been a Department of Energy (DOE) employee serving as a landfill manager. After the DOE began contracting this role out, the Plaintiff was continuously employed for a number of years in the same role by the sub-contractors who provided those services. When the contract was awarded to a new company in 2005, a new sub-contractor (Defendant, Energy Solutions) was responsible for the work that included the Plaintiff’s role. The Plaintiff applied for the landfill manager role with Energy Solutions, but Energy Solutions selected another candidate. The Plaintiff had reported environmental violations while he was landfill manager for the predecessor sub-contractor, and alleged that he was not hired by Energy Solutions because of that protected activity.
In the Plaintiff’s first go-round in court, the U.S. District Court for the Western District of Kentucky granted summary judgment, dismissing all of the Plaintiff’s claims against the prior contractor, the current contractor, and Energy Solutions. The Sixth Circuit heard the case for the first time, reviewing that decision, and affirmed summary judgment for the contractors, but remanded the claims against Energy Solutions for further consideration of the Plaintiff’s rights as an applicant with claims against the prospective employer. On remand, the District Court granted summary judgment in favor of Energy Solutions, holding that the Plaintiff lacked standing under the ERA and FCA to bring his retaliation claims.
The Appeals Court’s opinion last week decided an issue of first impression in the federal courts of appeal: whether an applicant for future employment has statutory standing to bring retaliation claims. The Appeals Court looked first to the language of the ERA and its protection of “employees” who have engaged in protected activity. Following well-established rules of statutory construction, the Court relied on the dictionary definition of “employee” to determine its “plain meaning” and found that the term specifically applies to those who presently provide services for pay. The Court also looked to the “established meaning” developed through the law as the common law definition to confirm that this interpretation is appropriate. Noting that the Plaintiff (1) never worked for Energy Solutions; and (2) Energy Solutions never controlled the manner or means of the Plaintiff’s provision of services, as would be required in a common law employee-employer relationship, the Court held that the Plaintiff was not an “employee” as that term is used in the ERA and reasonably interpreted. Indeed, according to the Court, finding an applicant such as the Plaintiff to be covered by the statute “would require a strained and unnatural reading of ‘employee.’”
For the Plaintiff’s claim under the FCA, the Appeals Court built on its decision regarding the plain meaning of “employee” for the ERA and looked to the FCA’s legislative history and case law to reach the same conclusion – that the Plaintiff, as an applicant, is not an “employee” and cannot proceed with his retaliation claim. With respect to the FCA, in particular, the Court noted that the law had been amended to include not only employees, but also contractors and agents. This change did not, as the Plaintiff argued, broaden the scope of the FCA’s coverage to include prospective employment, rather the Court found that the amendment reinforced the requirement that there be an active engagement of an employee, contractor or agent for the provision of services. Accordingly, the Court affirmed summary judgment for Energy Solutions, dismissing the Plaintiff’s claims.
In addition to this question of statutory standing, the Court also granted summary judgment against the Plaintiff on his contract-based claims, in part due to his lack of evidence that Energy Solutions had any knowledge of the Plaintiff’s protected activity while he was an employee of the predecessor sub-contractor. Plaintiff’s claims under the four other environmental statutes were dismissed because he failed to exhaust administrative remedies under those laws.