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Mooren v. System Studies & Simulation, Inc.

United States District Court, N.D. Alabama, Northeastern Division

August 18, 2017

DENISE MOOREN, et al., Plaintiffs,
SYSTEM STUDIES & SIMULATION, INC., et al., Defendants.



         Denise Mooren, Elizabeth Foster, and Katrina Matthews bring this action against System Studies & Simulation, Inc. (S3), Jan Smith (S3's owner and CEO), and Gary Rigney (a lawyer who was in private practice and represented S3 as general counsel). Doc. 118. Collectively, plaintiffs allege that S3 unlawfully terminated their employment in violation of the anti-retaliation provisions of the False Claims Act, 31 U.S.C. § 3730(h), as amended, and 42 U.S.C. §§ 1981 and 1981a. Doc. 118. Mooren also brings a claim under the anti-retaliation provisions in 41 C.F.R. 60-1.32, Title VII of the Civil Rights Act of 1964, the Vietnam Era Veterans' Readjustment Assistance Act of 1974, Section 503 of the Rehabilitation Act of 1973, and Title I of the Americans with Disabilities Act of 1990. Finally, plaintiffs allege violations of the Fair Labor Standards Act, 29 U.S.C. § 201 et seq., for failure to pay overtime (Foster) and for retaliation (Mooren and Matthews).

         In their separate motions for summary judgment, Rigney asserts that he is not employee and that the claims against him are due to be dismissed, and S3 and Smith argue that the plaintiffs cannot prove that they engaged in a protected activity or that they suffered an adverse action, and that Foster and Matthews cannot establish a violation of the FLSA. Docs. 127; 128 at 10, 25-27. For the reasons stated below, except for Matthews' Title VII, Section 1981, and FCA retaliation claims against S3 and Smith (1981 and FCA only), the motions are due to be granted.


         Under Rule 56(a) of the Federal Rules of Civil Procedure, summary judgment is proper “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” “Rule 56[] mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (alteration in original). The moving party bears the initial burden of proving the absence of a genuine issue of material fact. Id. at 323. The burden then shifts to the nonmoving party, who is required to “go beyond the pleadings” to establish that there is a “genuine issue for trial.” Id. at 324 (citation and internal quotation marks omitted). A dispute about a material fact is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

         The court must construe the evidence and all reasonable inferences arising from it in the light most favorable to the non-moving party. Adickes v. S. H. Kress & Co., 398 U.S. 144, 157 (1970); see also Anderson, 477 U.S. at 255 (all justifiable inferences must be drawn in the non-moving party's favor). Any factual disputes will be resolved in the non-moving party's favor when sufficient competent evidence supports the non-moving party's version of the disputed facts. See Pace v. Capobianco, 283 F.3d 1275, 1276, 1278 (11th Cir. 2002) (a court is not required to resolve disputes in the non-moving party's favor when that party's version of events is supported by insufficient evidence). However, “mere conclusions and unsupported factual allegations are legally insufficient to defeat a summary judgment motion.” Ellis v. England, 432 F.3d 1321, 1326 (11th Cir. 2005) (per curiam) (citing Bald Mountain Park, Ltd. v. Oliver, 863 F.2d 1560, 1563 (11th Cir. 1989)). Moreover, “[a] mere ‘scintilla' of evidence supporting the opposing party's position will not suffice; there must be enough of a showing that the jury could reasonably find for that party.” Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir. 1990) (citing Anderson, 477 U.S. at 252)).


         Smith is the owner and CEO of S3. Doc. 137-8 at 4. As a government contractor, S3 is required to maintain an accounting system that complies with the Defense Contract Audit Agency. 48 C.F.R. § 16.01-3(a)(3). To meet its obligations, during the relevant period, S3 used Deltek's Costpoint financial accounting package and Cognos software package to prepare human resources reports and to gather information to respond to various governmental audits. Doc. 131-1 at 11.

         S3 hired Mooren as a Senior Accountant in 2007. Doc. 131-5 at 98-100. Mooren's duties included reconciling S3's invoices, preparing S3's annual incurred cost submissions, and preparing reports using Costpoint and Cognos. Doc. 131-1 at 7-8.

         S3 hired Foster as a payroll administrator in 2009. Doc. 131-4 at 7. Foster's duties included processing labor and payroll using Costpoint and paying various state and local payroll taxes. Id. at 8.

         S3 hired Matthews as Human Resources Manager in 2011. Doc. 131-5 at 98- 100. S3 maintains that it hired Matthews based on Matthews' claimed experience in Equal Employment Opportunity reporting, and that it learned subsequently that Matthews lacked this relevant and essential experience.

         Shortly after Matthews started at ¶ 3, she discovered that the Office of Federal Contract Compliance (OFCCP) intended to audit S3's compensation data for its 2010 affirmative action plan (AAP). Doc. 137-2 at 37. To prepare for the audit, S3 engaged DYAS, a consulting firm, to aid Matthews in preparing S3's response. Id. Also, S3 assigned Foster to assist Matthews in pulling the data from Costpoint and Cognos to respond to the OFCCP. While gathering the data, Foster and Matthews discovered purported evidence of pay discrimination and wrongdoing. First, based on the updates in the general labor categories for employees with no corresponding notes in the employee personnel files, Foster and Matthews concluded that S3 had improperly changed the labor categories. Doc. 131-4 at 33. Second, Foster and Matthews also noted purported pay discrepancies between white males and minorities that Suzanne Ryan, S3's Chief Financial Officer, purportedly concealed by changing the general labor category codes. Id. at 42. Based on their discovery, Foster and Matthews asked Ryan about her rationale in updating the electronic records without doing so in the actual personnel files. Id. at 31. After this conversation, S3 pulled Foster and Matthews from the audit, and decided that Smith would review all documents before S3 sent them to DYAS for it to use in responding to the OFCCP. Id. at 31-32; doc. 137-1 at 43.

         On October 31, 2011, Foster filed a complaint with the Alabama State Board of Public Accountancy, in which she accused Ryan of falsifying records at Smith's direction and requested that the appropriate government agency audit S3. Doc. 137-2 at 10-11. Also, Foster accused Ryan of using others to sit for the continuing education classes Ryan needed to re-activate her accounting license. Id.

         Although Ryan did not need an active license to perform her duties for S3, Smith viewed Foster's complaint as a personal attack against Ryan because it threatened Ryan's credentials. Doc. 131-2 at 81. Therefore, Smith decided to investigate the allegations, and assigned the task to Rigney, an outside lawyer S3 used as its general counsel. Rigney conducted the interviews at ¶ 3's headquarters under oath before a court reporter. Id. at 52-53.

         When Rigney met with Foster, Foster declined to submit to an interview without her attorney. Doc. 131-4 at 100. Consequently, S3 placed Foster on administrative leave until she retained an attorney. Id. Five days later, after hiring a lawyer, Foster submitted to an interview during which she admitted that the documents she sent to the Accounting Board were not indicative of fraud. Id. at 13-15. Consequently, on November 21, ...

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