In U.S. ex rel. Cooley v. ERMI, LLC, the U.S. District Court for the Northern District of Georgia (the “Court”) denied the employer’s motion for summary judgment after the employer provided unclear and inconsistent explanations for the employee’s termination. The Court explained that the reasons provided by the employer may serve as pretext rather than a legitimate, nondiscriminatory reason for termination, thus creating a genuine issue of material fact.
Background
The plaintiff was hired in November 2018 as the Chief Compliance Officer of ERMI and was responsible for renewing ERMI’s state license, allowing it to continue selling home medical goods and services. But, after more than a year in her role, the plaintiff had allegedly failed to renew this license. The parties mutually agreed that the plaintiff would resign at the end of 2019.
In October 2019, the plaintiff confided to the Chief Operating Officer that she had a meeting with an attorney to discuss a whistleblower suit, which is a protected activity. The same week as the plaintiff’s anticipated meeting with an attorney, the defendant employer “unilaterally accelerate[d] her resignation.” Her separation notice stated only “restructuring” as the reason for the early termination. Afterward, the plaintiff sued ERMI, alleging retaliatory firing under the False Claims Act (“FCA”).
The Court’s Analysis and Decision
The Court first noted that “[t]here is simply no indication whatsoever that—prior to the protected activity—ERMI contemplated accelerating the resignation due to any misconduct by the Plaintiff.” The plaintiff established a prima facie case of retaliation under the FCA ((i) she engaged in a statutorily protected activity; (ii) suffered an adverse employment action; and iii) the adverse action was causally related to her protected activities) given the “short temporal proximity between her protected action and the acceleration of the resignation.”
ERMI asserted a legitimate non-retaliatory reason, restructuring for the plaintiff’s accelerated resignation, in seeking summary dismissal of the plaintiff’s claims. Later, ERMI subsequently added that the plaintiff’s termination was accelerated because she was mishandling the licensing application, “missing meetings and not being a good steward of company resources,” and creating a “profoundly dysfunctional environment.” Additionally, the Court noted that ERMI offered to pay a bonus/severance specifically conditioned upon the plaintiff signing a release and waiver of claims. The Court held these reasons created a genuine issue of material fact and denied ERMI’s motion seeking summary dismissal.
Practical Takeaways
- Employers should be clear, consistent and unwavering when documenting reasons for an employee’s separation or termination.
- Employers should be aware that any subsequent reasons offered as a basis for termination may create an unclear and/or inconsistent basis, thereby potentially denying an opportunity for summary dismissal of claims.
If you have any questions, please contact:
- Larry Jensen at ljensen@hallrender.com or (248) 457-7850; or
- Your primary Hall Render contact.
Special thanks to Summer Associate Oona Demko for her assistance in the preparation of this article.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot—outside of an attorney-client relationship—answer specific questions that would be legal advice.
