Fourth Circuit Clarifies “Protected Activities” Under the First Prong of a FCA Retaliation Claim

Posted by Ellyce Cooper and Maureen Soles

A recent Fourth Circuit decision clarifies what constitutes “protected activity” under the anti-retaliation provision of the FCA (31 U.S.C. § 3730(h)(1)). In Glynn v. Edo Corp., 710 F.3d 209 (4th Cir. 2013), the Fourth Circuit affirmed the District Court’s grant of summary judgment dismissing an employee’s retaliation claim. The court held that because plaintiff’s evidence failed to “raise a distinct possibility of a viable FCA action” or prove that any false certification was material, he failed to establish he engaged in “protected activity,” the first of three elements in a FCA retaliation claim.

Dennis Glynn worked as an engineer for Impact Science & Technology (“IST”). IST designs and manufacturers Mobile Multi-Band Jammer systems (“MMBJs”), which jam the frequencies used to detonate IEDs, for the government. Glynn alleged IST terminated him for reporting to the government alleged fraudulent conduct, specifically that IST was “shipping systems that … were putting our troops in jeopardy” and IST had failed to implement a quality assurance plan (“QAP”) as contractually required.

The first element of a retaliation claim under the FCA requires a plaintiff to prove that he “engaged in ‘protected activity’ by acting in furtherance of a qui tam suit.” Glynn, 710 F.3d at 214 (citing Zahodnick v. Int’l Bus. Mach. Corp., 135 F.3d 911, 914 (4th Cir. 1997)). Glynn attempted to satisfy this prong with three theories; the court rejected each theory.

Glynn first argued he engaged in “protected activity” by investigating IST’s alleged fraudulent activity of supplying a substandard product to the government. Although an employee does not need to file an actual qui tam case, the plaintiff must be investigating matters that reasonably could lead to a viable FCA case. Here, the court found that the issue identified by Glynn “was not severe enough in degree to trigger any contractual obligation on IST’s behalf.” The court held that plaintiff failed to offer sufficient evidence that his investigation raised a “distinct possibility of a viable FCA action,” because the product still “met the Government Customer’s standards.” Therefore, Glynn did not engage in protected activity.

Plaintiff next claimed he engaged in “protected activity” when he reported IST’s false certification of compliance with government contracts based on IST’s failure to implement a QAP or to report defects. With regard to the defects, the court applied the same reasoning as to the first theory and found that product improvements did not trigger any reporting requirement. As to the QAP, the court disagreed with the district court’s holding that the “false certification theory was essentially dead on arrival because he never actually received the contracts.” Instead, the court clarified that plaintiff is not required to have “firsthand knowledge of a contract” (i.e. the plaintiff does not have to see the contract itself); circumstantial evidence of a false certification can be sufficient if it raises a distinct possibility of a viable FCA action. But, any false certification must be material. In this case, the failure to implement a QAP was not material because the contractual language relating to the QAP required IST to perform inspections and testing, which the record established IST engaged in at both the modular and systems level. Therefore, any failure to implement a QAP was likely an administrative failure, and not a material false certification.

Finally, the court rejected Glynn’s third theory – that he engaged in “protected activity” by initiating the government investigation – because his complaint failed to “raise a distinct possibility of a viable FCA claim.” Merely “perk[ing] the government’s ears” is not enough to satisfy the “protected activity” prong of the anti-retaliation provision of the FCA.