Defense Contractor Fights Wrongful Firing Claims at 10th Circuit

DENVER (CN) – A military contractor argued before the 10th Circuit that two former workers weren’t forced out, they were laid off, and therefore misrepresented their case to the jury that awarded them $1.54 million.

James Walker, Steven Wascher and three other security investigators contracted by Vectrus Systems sued the company in 2015, claiming they were wrongfully fired for reporting supervisors’ breaches of security at Bagram Air Base in Afghanistan.

In their complaint, the plaintiffs outlined a “cabal of Vectrus employees engaged in altering and deleting information in the U.S. government’s biometric data system used for the tracking and identification of individuals and potential insurgents, selling of classified information for personal gain, taking improper actions to protect a Turkish contractor including interfering with investigations and giving advance warning of raids by the military, controlling drugs, alcohol and prostitutes on the military base, and transferring or terminating employees who would not cooperate with their illegal activities.”

The Byron White United States Courthouse, home of the 10th Circuit. (Nyttend via Wikipedia)

After a two-week trial in June 2018, a federal jury in Colorado awarded $1.54 million to four of the five contractors. The jury found one of the contractors was appropriately terminated.

On appeal, Vectrus focused on plaintiffs Walker and Wascher, who the company argued weren’t outright fired but laid off after they turned down transfers to other air bases.

According the Walker and Wascher’s attorneys, however, these transfers would have been demotions in both title and pay. The transfers also entailed working under more dangerous conditions in “Rocket City,” a choice that amounts to constructive discharge, the men’s attorneys said.

On behalf of Vectrus, attorney Daniel Lula of Baker & Hostetler argued the plaintiffs’ case unexpectedly shifted to rely on constructive discharge, rather than actual discharge.

“The choice was the same for them: take the demotion or be laid off,” said U.S. Circuit Judge Nancy Moritz, a Barack Obama appointee. “What difference does it make? To argue wrongful discharge, you just need discharge.”

Lula argued this strategy allowed the plaintiffs to introduce “sexier jury appeal material” to prove their point. If they had only argued actual discharge, Lula said, there would have been no need to introduce military witness testimony and evidence.

“It’s also important because a defendant has a right to understand what kind of case they’re defending,” Lula explained. “Actual termination is not a lesser offense than constructive discharge, it’s a completely different case.”

Members of the panel observed it can also be harder to prove constructive discharge and is not a path typically taken by a plaintiff.

“We’re in a strange scenario because the employer is usually arguing constructive discharge,” Moritz said. “Wouldn’t it have been easier [for the plaintiffs] to prove actual discharge?”

The plaintiffs’ attorney Steven Hartmann of the Chicago firm Freeborn & Peters said they were led by the facts.

“The facts of the case remain the same,” Hartmann said. “It couldn’t have changed the trial.”

While Vectrus asked for a new trial on appeal, Hartmann noted, “Vectrus does not challenge the jury’s findings that they [plaintiffs] were whistleblowers or engaging in protected activity, or that the termination was done with malice. The evidence is very strong: Vectrus very quickly learned these plaintiffs were whistleblowers and within four months transferred them out of Bagram.”

Based in Colorado Springs, private security firm Vectrus generated $1.3 billion in earnings in 2018 and employs 6,700 people in 22 countries, according to its website.

U.S. Circuit Judges Gregory Phillips and Carolyn McHugh, also Obama appointees, rounded out the panel, which took the case under submission.

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