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Nifong v. SOC, LLC

United States District Court, E.D. Virginia, Alexandria Division

June 2, 2016

KENLY B. NIFONG, Plaintiff,
SOC, LLC, Defendant.



         In this retaliation action, plaintiff alleges that defendant, a federal contractor and plaintiffs former employer, took adverse actions against plaintiff, including the termination of plaintiffs employment, in retaliation for plaintiffs reporting of defendant's practice of designating employees at pay grades higher than warranted for the duties performed in order to bill the government at a higher rate. Specifically, plaintiff alleges two claims against defendant: (i) a False Claims Act ("FCA") retaliation claim pursuant to 31 U.S.C. § 3730(h), and (ii) a National Defense Authorization Act ("NDAA") reprisal claim pursuant to 41 U.S.C. § 4712. Defendant has moved to dismiss both claims for failure to state a claim. As the matter has been fully briefed and argued orally, it is now ripe for disposition.

         I [1]

         Plaintiff Kenly B. Nifong, a resident of Florida, is a former employee of defendant SOC, LLC, a government contractor that provides services at U.S. Department of State ("DOS") facilities around the world, including Baghdad, Iraq.

         In September 2012, plaintiff began working for defendant, and in March 2013, defendant sent plaintiff to Iraq to work on the Worldwide Protective Services contract, SAQMMA10F521 ("WPS Contract"), [2] with DOS, as a Deputy Project Manager of Operations for the Baghdad Embassy Security Force Project. Thereafter, on June 29, 2013, plaintiff became aware that defendant's employee, James McKaughan, a Private Security Specialist ("PSS") on the WPS Contract, had recently been assigned to a Shift Leader ("SL") position, a higher ranking position than PSS. McKaughan's new SL designation allowed defendant to bill the government at a higher rate for McKaughan's work, even though McKaughan continued to perform the duties of a PSS, not the duties of an SL.

         Soon after plaintiff became aware of McKaughan's new SL designation, plaintiff contacted Detail Leader ("DL") James Martin to discuss the matter. Thereafter, on June 30, 2013, DL Martin informed plaintiff by email that defendant had deliberately designated McKaughan as an SL because "keeping personnel in the highest paying/billable positions regardless of the actual job being performed was [the] general practice at the Baghdad Embassy Compound, and had been since [defendant] obtained the contract." Compl. ¶ 81. In response, plaintiff told DL Martin that this practice appeared to be contract fraud and that defendant should correct the practice.

         That same day, plaintiff reported the McKaughan designation to his supervisor, Project Manager ("PM") Bancroft McKittrick. Plaintiff also reported to McKittrick defendant's more general practice of designating personnel at the highest possible positions in order to bill the DOS at the highest possible rate. As plaintiff had previously stated to DL Martin, plaintiff also noted to PM McKittrick that this practice appeared to constitute fraud and suggested that defendant should self-report the practice to the DOS. In response, PM McKittrick told plaintiff not to report the practice and assured plaintiff that PM McKittrick would correct the practice before the next billing cycle. Plaintiff then sent PM McKittrick a follow-up email in which plaintiff (i) reiterated his concerns about the billing practice, (ii) noted that he believed the practice "could easily be construed as fraud, " and (iii) identified specific corrections to be made before the next billing cycle. Def. Ex. C, McKittrick Email (June 30, 2013). Shortly thereafter, PM McKittrick replied to this email, copying Deputy PM of Facilities and Support Kismet Rollins and Deputy PM of Operations Rich Tudor. Id. In this reply, PM McKittrick thanked plaintiff for taking action and directed Deputy PM Rollins to determine what further steps were needed. Id.

         Later that day, June 30, 2013, Deputy PM Rollins emailed plaintiff, PM McKittrick, and Deputy PM Tudor recommending that "if it doesn't affect the mission, " defendant should continue to "fill the high paying positions and down post the low paying positions so the employee will make more money" and defendant "will make more profit." Compl. K 92, Def. Ex. D, Rollins Email (June 30, 2013). In other words, Deputy PM Rollins recommended that defendant should continue designating employees at pay grades higher than necessary for the duties performed in order to bill the government at a higher rate. Plaintiff responded to Deputy PM Rollins, PM McKittrick, and Deputy PM Tudor, stating that "I still cannot see how we can bill for a SL if the person if [sic] a PSS position" and that "there is an ethical question to be answered." Id. ¶ 93, Def. Ex. D, Plaintiff Email (June 30, 2013). Plaintiff later asked Administrative Logistics Support Services Manager ("ALSSM") Josh Noble if anything had been done to correct defendant's billing practice; ALSSM Noble indicated he was unaware of any efforts to correct the billing practice.

         Thereafter, on July 2, 2013, plaintiff reported the McKaughan designation to DOS Contracting Officer Representative Anthony Hill, the DOS employee who monitored and directed defendant's performance of the WPS Contract. Plaintiff asked Hill to protect his identity and to keep the information confidential, and Hill agreed. Nonetheless, Hill told others at the DOS about plaintiffs report. Shortly thereafter, plaintiff informed Assistant Regional Security Officer Chris Vega, defendant's employee, that plaintiff had reported the McKaughan designation to Hill.

         Almost three months later, on September 25, 2013, Deputy PM Rollins issued plaintiff a new rotation schedule that plaintiff alleges was adverse to plaintiff. Plaintiff also alleges that Deputy PM Rollins required plaintiff to accept the new rotation schedule immediately, which plaintiff declined to do. Thereafter, on September 29, 2013, PM McKittrick called plaintiff (i) noting that plaintiff did not support defendant's management, and (ii) accusing plaintiff of misconduct. Shortly thereafter, on October 8, 2013, during a weekly conference call, Deputy PM Rollins said that plaintiff was "having trouble" and that "we need to get him out right away." Compl. f 116-17.[3] Two days after the conference call, PM McKittrick emailed a "Counseling Statement" to plaintiff, characterizing the email as a follow up to the "verbal warning" PM McKittrick had given plaintiff during the September 29, 2013 telephone call. Def. Ex. F, Counseling Statement. The Counseling Statement described plaintiffs poor work performance and unprofessional conduct.

         Thereafter, on December 6, 2013, while in the United States on unpaid leave, plaintiff submitted a complaint by email to defendant's parent company, Day & Zimmerman, stating that plaintiff had reported "wrong-doing, " and as a result, was suffering retaliation, slander, defamation, and harassment. Def. Ex. H, PL Email (Dec. 6, 2013). Plaintiffs email further advised defendant's parent company that although plaintiffs visa did not expire until December 23, 2013, plaintiff would not return to Iraq before that date because he had "lost trust and confidence in most of [defendant's] corporate staff' and could not "in good faith go back to a company that allows [the alleged] behavior to continue, " but would instead "simply remain on the bench until [he found] other employment or these issues [were] resolved." Id.[4]

         Ten days later, on December 16, 2013, Claude Goddard, a lawyer retained by Day & Zimmerman, contacted plaintiff. Goddard explained that he had been retained to investigate plaintiffs complaint and promised to provide plaintiff with the results of the investigation sometime after Christmas 2013.

         On December 28, 2013, plaintiff received a letter from defendant notifying plaintiff that his employment with defendant had been terminated, effective December 23, 2013, for violating International Trafficking in Arms Regulations ("ITAR") during his previous deployment in Iraq. Specifically, the termination letter stated that plaintiff had given some of defendant's ammunition to Iraqi Special Forces, in violation of ITAR, in exchange for the use of an Iraqi shooting range. Def. Ex. A, DOS Inspector General Report.[5]

         On October 13, 2014, plaintiff submitted a complaint to the DOS Inspector General ("IG"), alleging that plaintiffs employment had been terminated in retaliation for plaintiffs whistleblowing activity. The DOS IG investigated plaintiffs complaint and ultimately concluded that defendant had shown by clear and convincing evidence that defendant had not terminated plaintiffs employment in retaliation for any protected activity, but had instead done so on the basis of plaintiff s poor performance and improper conduct.

         On February 8, 2016, plaintiff filed a complaint alleging that defendant terminated plaintiffs employment with defendant in retaliation for plaintiffs reporting of defendant's allegedly fraudulent employee designation practice. Specifically, plaintiff alleges two claims against defendant: (i) an FCA retaliation claim pursuant to 31 U.S.C. § 3730(h), and (ii) a NDAA reprisal claim pursuant to 41 U.S.C. § 4712.

         Thereafter, defendant filed a motion to dismiss both of plaintiffs claims for failure to state a claim on which relief can be granted pursuant to Rule 12(b)(6), Fed.R.Civ.P. Plaintiff then filed a motion for leave to amend the complaint in order to allege additional facts with respect to the § 4712 claim. Specifically, plaintiff sought to add a factual allegation that the DOS IG deemed § 4712 applicable to the WPS Contract. Importantly, this additional factual allegation would make no difference in determining whether § 4712 applies to the WPS Contract, but because there may be additional facts material to plaintiffs § 4712 claim, plaintiffs motion for leave to amend was granted by Order dated May 27, 2016. Nifong v. SOC, LLC, No. 1:16-cv-63 (E.D. Va. May 27, 2016) (Order) (Doc. 21). In this regard, during oral argument on plaintiffs motion for leave to amend and defendant's motion to dismiss, defendant agreed to allow plaintiff to review the WPS Contract and modifications to that contract in order to determine whether § 4712 is applicable here. Accordingly, by Order dated May 27, 2016, (i) defendant's motion to dismiss was taken under advisement pending plaintiffs review of the WPS Contract documents, and (ii) plaintiff was directed to submit a pleading by June 1, 2016, addressing whether § 4712 governs the WPS Contract. Id.

         On June 1, 2016, plaintiff filed a supplemental pleading stating that defendant had provided plaintiff with the WPS Contract documents, and that upon review of those documents, plaintiff concluded that § 4712 governs the WPS Contract, and therefore provides a basis for a reprisal claim here. Thus, defendant's motion to dismiss is ripe for disposition.


         Dismissal pursuant to Rule 12(b)(6), Fed. R. Civ. P., is appropriate where the complaint does not "contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.' " Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl Corp. v. Twombly, 550 U.S. 544, 570 (2007)). To survive a Rule 12(b)(6) motion to dismiss, a complaint must contain more than "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements." Id. Instead, the complaint must allege facts that plausibly satisfy each element of the claims for which relief is sought. Id. at 679. Accordingly, a motion to dismiss must be granted if the complaint does not allege a factual basis to support a plausible inference that plaintiff is entitled to relief.


         Defendant first contends that plaintiffs NDAA reprisal claim pursuant to 41 U.S.C. § 4712 must be dismissed because that statute, a temporary statute that applies only to a four-year period, does not apply here.

         Under § 4712, an employee of a federal contractor may bring a reprisal claim against the federal contractor. Yet, as defendant correctly notes, § 4712 is a "pilot program" that temporarily suspends application of 41 U.S.C. § 4705, a similar provision that does not provide a private cause of action. Id. § 4705(f). Specifically, § 4712 is effective only for a four-year period beginning on July 1, 2013, 180 days after the date of enactment. See 41 U.S.C. ยง 4712(i). In this respect, Congress provided that "[t]he amendments made [to ...

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