Retaliation Claim Under Law Protecting Defense Contractor Whistleblowers Cannot Go Forward

​A linguist who worked for a U.S. Department of Defense (DOD) contractor could not go forward with her retaliation claim under the Defense Contractor Whistleblower Protection Act (DCWPA), a federal appeals court ruled. The employee, who alleged she was fired after complaining about being shoved by an intoxicated co-worker while at a bar at the U.S. Embassy compound in Baghdad, failed to allege a disclosure protected by the act, the court said.

The employee was not injured in the incident at the bar. After she reported the incident, her employer attempted to transfer her to a different position. The employee initially refused the transfer and was subsequently fired. She filed suit under the DCWPA, alleging she was discharged in retaliation for making a protected disclosure under the act. A trial court held that she had not alleged a protected disclosure and dismissed her complaint before trial. The employee appealed.

Under the DCWPA, an employee of a DOD contractor may not be discharged or otherwise discriminated against as a reprisal for disclosing information that the employee reasonably believes is evidence of a violation of law, rule or regulation related to a department contract, the appeals court first explained.

To go forward with a lawsuit, a plaintiff must allege they made a disclosure that they reasonably believed was evidence of a violation related to a DOD contract and that their employer discharged or otherwise discriminated against them because of that disclosure, the court said.

Although the employee adequately alleged that she was discharged because of reporting the shove, the appeals court said questions remained as to whether she plausibly alleged a reasonable belief that her complaint about the shoving incident encompassed one of the protected acts described in the DCWPA.

The law protects disclosures related to:

• Gross mismanagement of a DOD contract or grant.
• A gross waste of department funds.
• An abuse of authority relating to a department contract or grant.
• A violation of law, rule or regulation related to a department contract.
• A substantial and specific danger to public health or safety.

The appeals court noted that its task was to interpret the meaning of "a violation of law related to a department contract," an issue few courts had had the occasion to address.

The court concluded that, in the context of a defense contract, a violation of law is related to the contract if it is related to the purpose of the contract or affects the services provided by the defense contractor to the DOD. A disclosure is protected if a disinterested observer with knowledge of the facts would reasonably conclude that the disclosure evidences a violation of law related to a defense contract in this manner.

The court noted that the employee theorized that the shove constituted an assault in violation of federal law. The employer argued that the co-worker's conduct did not rise to the level of unlawful behavior contemplated by the DCWPA, and furthermore, it bore no relation to the employer's contract with the DOD.

The court then said it didn't have to decide whether the bar incident could constitute a simple assault or whether an assault could ever give rise to whistleblower protection. Rather, the court was obligated to affirm the dismissal of the complaint because the plaintiff failed to allege a sufficient nexus between the shove and the employer's DOD contract.

The court noted that the statutory text requires that the plaintiff allege an objectively reasonable belief that the disclosure shared a nexus with the contract. This standard is a relatively forgiving one, the court said, as the employee is only required to claim a reasonable belief that her disclosures were protected, and her belief need not be correct.

However, the court continued, no reasonable observer would think there was a connection between being shoved at a bar by an intoxicated co-worker and the employer's contract with the DOD, under which the employee performed a linguist's services.

In essence, the court said, the employee was asking it to find that because the dispute was between employees of a contractor, it was therefore related to the contract. The court declined to adopt such a broad interpretation of the DCWPA.

Although the employer's actions may have been unwise or unjust, the DCWPA was simply not the appropriate avenue for recourse in this case, the court concluded.

Kappouta v. Valiant Integrated Services LLC, 9th Cir., No. 21-56310 (Feb. 21, 2023).

Joanne Deschenaux, J.D., is a freelance writer in Annapolis, Md.