10th Circuit Sides with Plaintiffs in Military Contractor Whistleblower Case
The court upheld district court’s denial of new trial and post-trial motions

by Avery Martinez
The Byron White courthouse in Denver

The 10th Circuit Court of Appeals on Aug. 7 affirmed district court orders denying post-trial motions by Vectrus Systems Corporation in a whistleblower retaliation case from the Bagram Airfield in Afghanistan. The case questioned whether five defense contractors were fired for alerting authorities to other Vectrus employee conduct. Wheeler Trigg O’Donnell had partnered with Steven Hartmann, partner at Freeborn & Peters of Chicago, on the case.

“The plaintiffs were heroes. I can’t call them anything other than what they are,” Hartmann said. “They knew that stuff they reported was not going to be well received by Vectrus.”

The 10th Circuit’s decision leaves intact a jury verdict for the plaintiffs, for $1.3 million in compensatory damages and $400,000 in punitive damages. The order further reversed the district court’s order granting summary judgment to the company on three plaintiffs’ claims and remands them to district court for further proceedings.

The history of the case dates back to 2013, when the plaintiffs worked for Vectrus as “security investigators” on a military subcontract at Bagram Airfield. The plaintiffs,

Victor Cejka, James Walker, Steven Wascher, Jamie Lytle and Jennifer Cross, managed data via a computer system used by the U.S. military and NATO for tracking terrorists, and the plaintiffs found that other employees of the Colorado Springs-based company had altered and  deleted information important to maintaining the security of the base, and potentially other military facilities,  as previously reported by Law Week.

When the plaintiffs had first reported the information to Vectrus, they had been told to mind their own business, Hartmann said.

The complaint alleged that Vectrus employees had engaged in selling classified information for personal gain, taking improper action to protect a Turkish contractor including interference with investigators. The complaint also alleged that advanced warning was given about raids by the military, controlling drugs, alcohol and prostitutes on the base and terminating or transferring employees not cooperating with illegal activities.

Each plaintiff reported their beliefs that Vectrus employees were then engaging in unlawful conduct to military officials, and in response, the military raided Vectrus operations in 2013 and removed eight employees. Each plaintiff was working under a one-year contract which was terminated by Vectrus “for cause or convenience” with a 30-day notice, according to the 10th Circuit’s order. Over the next month, Cejka and Lytle were terminated, and Wascher and Walker were transferred to forward operating bases rumored to be closing.

After they were transferred, the company gave Wascher and Walker an option of accepting clerk positions or accepting layoffs. Both plaintiffs . The plaintiffs later filed the complaint against the company, claiming that it had violated the DoD statute and common law.

The plaintiffs argued they were following U.S. military orders for reporting wrongdoing, and therefore had tightened the base’s security. The defense argued that the contractors were laid off for refusing to transfer locations.

Walker’s claim and “all four plaintiffs’” state-law claims were tried by jury. Military documents and personnel were admitted, according to the order. The jury found for the plaintiffs on all claims, and Cejka and Lytle were found by the jury to be terminated by Vectrus because of whistleblowing activity. Wascher and Walker were “constructively discharged” by the company, and that because of their whistleblowing, the company made their working conditions so “intolerable” they had no choice but to resign.

Vectrus moved for summary judgment on Cejka, Lytle and Wascher’s claims arguing their claims failed because of their separation occurring before DoD protections applied under the subcontract which they were employed, according to the order.

After plaintiffs set forth evidence, Vectrus made two motions for judgment, specifically, that all plaintiff’s wrongful-discharge claims because the doctrine only applied to at-will employees, which they weren’t, and that Wascher and Walker’s wrongful-discharge claim failed because they “did not resign and instead Vectrus laid them off,” according to the order. The district court denied the motions and submitted the case to the jury.

Vectrus had appealed the district court’s orders denying its motions for judgment, arguing the plaintiff cannot bring Colorado wrongful-discharge claims because they were only available to at-will employees, which the plaintiffs are not, and that Wascher’s and Walker’s claims failed because they were constructively discharged, requiring resignation, which they testified they did not. The company also appealed the district court’s order denying motion for a new trial.

Cejka, Lytle and Wascher appealed the district court’s order granting judgment to Vectrus on their DoD claims. The order states the conclusion is that under the plain language of the DoD statute, it applies to the plaintiffs, and “thus the district court erred in concluding that Cejka’s, Lytle’s and Wascher’s whistleblowing activity was not protected” and remanded the issue to district court.

The order notes that Vectrus did not cite a Colorado case affirmatively holding that non-at-will employees cannot bring a wrongful-discharge claim and as such the courts had no reason to consider whether non-at-will employees could bring wrongful-discharge claims for violation of public policy and therefore don’t limit the scope of who can bring wrongful discharge claims.

Further, the 10th Circuit noted that Walker and Wascher were constructively discharged because they were in working conditions so intolerable, they had no choice but to resign. The district court found that ample evidence at trial showed intolerable conditions and concluded that Colorado courts consider resignation in a broad context and focus on whether the separation of employment was voluntary.

“Applying de novo review, we must affirm this denial unless Vectrus demonstrates that a ‘reasonable jury would not have a legally sufficient evidentiary basis to find for’ plaintiffs,” the order states.

The 10th Circuit also affirmed the district court’s orders denying Vectrus’s motions for judgment and for a new trial.

According to the 10th Circuit, Vectrus wrongfully discharged the workers in violation of Colorado law and Department of Defense whistleblower protection statute.

 

This article appears in the Aug. 17 issue of Law Week Colorado. To read other articles from that issue, order a copy online. Subscribers can request a digital PDF of the issue.