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CFO’s termination was not unlawful

Where the Southwest Virginia Higher Education Center eliminated the CFO position to meet a budget reduction mandated by then-Gov. Terry McAuliffe, and not because of the plaintiff’s complaints, the defendants’ motion for summary judgment on the whistleblower and retaliation claims were granted.

Background

On June 1, 2018, William D. Carmack filed a complaint alleging multiple causes of action related to his termination as the Chief Financial Officer of the Southwest Virginia Higher Education Center. The two remaining counts are for violation of Virginia’s Fraud and Abuse Whistle Blower Protection Act, or FAWBPA, and retaliation in violation of First Amendment protections afforded speech.

Defendants have filed a motion for summary judgment, asserting that the critical deficiency with Carmack’s claims is that “he cannot dispute that his layoff was the result of a year-long analysis into how the Center should be reorganized to meet a budget reduction mandated by Governor McAuliffe.”

Analysis

The central issue in dispute between the parties relates to causation. In order to examine the causation element of Carmack’s claims, the court must first determine the extent of his protected activity. Carmack contends that his sundry “internal warnings and complaints” to David N. Matlock, Executive Director of the center, all of which predate his external complaint to the Office of State Inspector General and occurred sporadically over the course of several years, constitute statutorily protected activity. The court, in the interest of brevity, will assume, without deciding, that the aforementioned conduct qualifies as protected activity under the FAWBPA.

The guidance on the proper causation standard to apply in the FAWBPA context is limited. While no federal or state court in Virginia has directly held that the McDonnell Douglas burden-shifting scheme applies to FAWBPA cases, courts routinely apply this framework in adjudicating claims brought under similar state and federal whistleblower statutes. The court will apply this framework in the present matter.

The defendants have amassed and adduced substantial and specific record evidence supporting their contention that Carmack’s CFO position was eliminated as part of a “long-term solution that would meet Governor Terry McAuliffe’s budget mandate” for 2017 and 2018 rather than motivated by retaliatory animus tied to either Carmack’s “internal warnings and complaints” or external OSIG complaint. Because the defendants articulated non-retaliatory reasons for abolishing the CFO position, the court need not indulge or address disputes as to whether Carmack met his burden in establishing a prima facie case.

Where, as in this case, an employer meets its second-stage burden, the burden then shifts back to the plaintiff to come forward with evidence rebutting the employer’s evidence and generating genuine issues of material fact as to whether the employer’s preferred reasons were pretextual. While Carmack is critical of the process, he offers little by way of argument or evidence rebutting the underlying justifications for including the CFO position as part of the process in the first place, namely that others could assume his diminishing and duplicative responsibilities.

Considering the record as a whole, Carmack has failed to show, by direct or circumstantial evidence, that Matlock’s decision to eliminate the CFO position was causally related to his alleged internal warnings and complaints or external complaint to the OSIG. While Carmack repeatedly characterized Matlock’s reasons as “evolving” and/or “ever-changing,” contemporaneous documents, deposition testimony and  declarations from knowledgeable, neutral third parties indicate that Matlock’s rationale was consistently, albeit not always explicitly, predicated upon the mandate announced in the 2016 memoranda. Accordingly the court grants the defendants’ motion as to count one.

In count two, Carmack brings a claim under 42 U.S.C. § 1983 asserting that for the same reasons his termination constituted a violation of the FAWBPA, it also constituted a violation of the First Amendment. The court concludes that, as with and for the same reasons given with respect to count one, the defendants are entitled to summary judgment on count two. Carmack simply has not presented sufficient evidence for a reasonable jury (1) to conclude that his various complaints were a “substantial” or “motivating” factor in, let alone a but for cause of, his termination, (2) to discredit the underlying justifications for abolishing the CFO position or (3) to cast doubt on the legitimacy of the WTA process.

Defendants’ motion for summary judgment granted.

Carmack v. Commonwealth, Case No. 18-cv-31, Aug. 29, 2019. WDVA at Abingdon (Urbanski). VLW 019-3-420. 76 pp.

VLW 019-3-420

Virginia Lawyers Weekly