Mark Thompson v. Quorum Health Resources, LLC, et al
Filing
OPINION filed : we AFFIRM the judgment of the district court, decision not for publication pursuant to local rule 206. Richard F. Suhrheinrich, Circuit Judge; Julia Smith Gibbons, Authoring Circuit Judge and David W. McKeague, Circuit Judge.
Case: 10-5685
Document: 006111346717
Filed: 06/22/2012
Page: 1
NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 12a0664n.06
No. 10-5685
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
FILED
Jun 22, 2012
MARK THOMPSON,
)
)
Plaintiff-Appellee,
)
)
v.
)
)
QUORUM HEALTH RESOURCES, LLC, )
)
Defendant-Appellant,
)
)
and
)
)
TRIAD HOSPITALS, INC.,
)
)
Defendant.
)
LEONARD GREEN, Clerk
ON APPEAL FROM THE UNITED
STATES DISTRICT COURT FOR
THE WESTERN DISTRICT OF
KENTUCKY
Before: SUHRHEINRICH, GIBBONS, and McKEAGUE, Circuit Judges.
JULIA SMITH GIBBONS, Circuit Judge. Mark Thompson brought a retaliatory
discharge claim under the False Claims Act, 31 U.S.C. § 3730(h), after he was suspended and later
discharged by his employer, Quorum Health Resources, LLC, (“Quorum”) a healthcare company.
A jury concluded that Thompson was fired in retaliation for filing a qui tam action against Quorum.
Quorum now appeals the district court’s denial of its motion for a new trial or, in the alternative, for
judgment as a matter of law. For the reasons set forth below, we affirm.
I.
Quorum contracts with hospitals to provide management services. These services include
providing the client hospital with key management staff, such as a CEO and CFO. Thompson was
Case: 10-5685
Document: 006111346717
Filed: 06/22/2012
Page: 2
No. 10-5685
Thompson v. Quorum Health Resources, LLC
hired by Quorum in 1994 to serve as CEO of Cumberland County Hospital in Burkesville,
Kentucky. In 1999, Thompson was offered and accepted the CEO position at Monroe County
Medical Center (“MCMC”), a Quorum-managed facility.
During Thompson’s tenure as CEO of MCMC, the relationship between MCMC and
Quorum was governed by a management agreement. Pursuant to the management agreement,
Quorum was paid an annual fee for its consulting and management services. Quorum was also paid
a percentage commission based on the amount of goods and services MCMC purchased from Group
Purchasing Organizations, or GPOs—vendors of hospital goods—with which Quorum had a
relationship.
Shortly after he began working at MCMC, Thompson began having concerns about the
manner in which his supervisor, Taylor Cook, was representing certain aspects of the management
agreement to MCMC’s Board of Directors (the “Board”). Specifically, Thompson was concerned
with Cook’s representation to the Board that MCMC was switching GPOs, without disclosing to the
Board that the decision regarding which GPO to use was one that the Board could make. Thompson
was also concerned with Cook’s failure to bring the 2000 management agreement to the Board as
a whole—rather, Cook directed Thompson to just obtain the Board Chairman’s signature on the
contract. Thompson also believed that Cook had misrepresented to the Board that Quorum’s
management fee was calculated based on the consumer price index, rather than the medical
consumer price index. Finally, Thompson believed that Cook failed to disclose to the Board that
the 2002 management contract required Quorum’s fee to increase by no less than 5% compounded
annually.
2
Case: 10-5685
Document: 006111346717
Filed: 06/22/2012
Page: 3
No. 10-5685
Thompson v. Quorum Health Resources, LLC
As a Quorum employee, Thompson was bound by a Code of Conduct which required him
to report any suspected violations of policy, procedure or law to Quorum. Each year he was
employed by Quorum, Thompson certified his compliance with the Code of Conduct. On none of
these Code of Conduct forms did Thompson indicate any concerns about Cook’s misrepresentations
and omissions to MCMC. On November 19, 2002, Thompson called Quorum’s compliance hotline
to report his concerns about Cook, but when he was asked to identify which hospital he worked for,
he declined to provide the requested information and reported no concerns.
Thompson filed a qui tam suit pursuant to the False Claims Act on January 14, 2004. The
complaint alleged that Quorum had defrauded the federal government by unnecessarily driving up
MCMC’s costs—which were in turn passed on to Medicare—by improperly selecting hospital
vendors and GPOs. Assistant United States Attorney Bill Campbell, who investigated Thompson’s
qui tam allegations, advised Thompson not to disclose the existence of his qui tam lawsuit because
it was under seal.
In 2004, MCMC’s independent accounting firm, Taylor, Polson & Company (“Taylor
Polson”), conducted an audit of MCMC. As part of the audit, Taylor Polson sent certain MCMC
Board members and executives, including Thompson, an audit questionnaire which asked about the
potential for fraud at MCMC. Thompson received the audit questionnaire in May of 2004 and
returned it to Taylor Polson in August. Thompson responded to several questions about the potential
for fraud at MCMC as follows:
Question: “Do you believe Monroe County Medical Center has controls and systems
in place to prevent a significant fraud from occurring in the Organization?”
Response: “No—Management Contract.”
3
Case: 10-5685
Document: 006111346717
Filed: 06/22/2012
Page: 4
No. 10-5685
Thompson v. Quorum Health Resources, LLC
Question: “Where do you believe the Organization is most vulnerable to significant
fraud?”
Response: “Management Contract.”
Question: “Do you have any reason to question the integrity of any of your financial
personnel?”
Response: “Yes.”
Question: “Do you have any suspicions of fraud that you believe we should
consider?”
Response: “Yes.”
John Taylor of Taylor Polson requested a meeting with Thompson to discuss his
questionnaire responses. On August 20, 2004, Thompson and his attorney met with Taylor.
Thompson told Taylor that the management contract was not “being handled appropriately” and
certain changes in the contract were not “being divulged as [they] should have been.” (DE 145,
Trial Tr. Vol. II, at 227.) Thompson expressed concerns about the Board’s approval of the
management contract without having reviewed it and about the Board’s being misled by Cook.
Thompson also expressed concerns about MCMC’s purchasing agreements with vendors.
On September 2, 2004, Taylor met with the Board’s Finance Committee to discuss
Thompson’s responses to the audit questionnaire and his meeting with Thompson. The members
of the Finance Committee expressed surprise at Thompson’s concerns and directed Taylor to notify
MCMC CFO Rickie Brown about Thompson’s responses and to have Brown contact Cook. Cook
then informed Joe Beck, Quorum’s corporate compliance officer, of Thompson’s responses to the
questionnaire.
4
Case: 10-5685
Document: 006111346717
Filed: 06/22/2012
Page: 5
No. 10-5685
Thompson v. Quorum Health Resources, LLC
In October, Beck and Chris Kelly, Quorum’s General Counsel, traveled to MCMC to meet
with the Finance Committee and Thompson to discuss Thompson’s fraud allegations. At the
meeting, Thompson refused to answer questions about his concerns because his attorney was not
present. Kelly then sent a letter to Thompson’s attorney, dated November 1, 2004, which stated that
Quorum and the Finance Committee had been trying to meet with Thompson to understand his fraud
concerns, but Thompson had been unwilling to meet with Quorum or the committee outside of the
presence of his attorney. Kelly demanded that Thompson meet with Quorum and the Finance
Committee by November 5, 2004. By letter dated November 5, 2004, Thompson’s attorney
informed Kelly that Thompson would be in a better position to meet with Quorum and the
Committee some time after November 18, 2004. On November 18, 2004, Beck sent a letter to
Thompson informing him that he had violated the Code of Conduct by failing to report his fraud
concerns to Quorum and by failing to cooperate in Quorum’s investigation of those concerns. Beck
informed Thompson that these Code violations subjected him to potential disciplinary action,
including termination. Beck then demanded that Thompson meet with Quorum representatives on
November 29 or 30, or December 1, 2004.
On November 29, 2004, Kelly received a letter from AUSA Campbell informing him that
Thompson had filed a qui tam lawsuit pursuant to the False Claims Act. Campbell advised Quorum
not to take any steps against Thompson that might constitute retaliation. The next day, a
representative of the law firm Epstein Becker, outside counsel for Quorum, called Campbell to tell
him that it would be investigating the matter on Quorum’s behalf. About two weeks later, Epstein
Becker wrote to Campbell requesting a copy of Thompson’s False Claims Act complaint, and
5
Case: 10-5685
Document: 006111346717
Filed: 06/22/2012
Page: 6
No. 10-5685
Thompson v. Quorum Health Resources, LLC
informing Campbell that prior to the receipt of his letter, Quorum had determined that Thompson
would likely be discharged for his “refusal to comply with his reporting and disclosure obligations
under [Quorum’s] compliance program.” (Appellant’s App’x, at 25.) The letter also informed
Campbell that, in light of his November 29 letter, Quorum had decided to suspend Thompson
temporarily with pay instead of terminating his employment immediately.
On December 27, 2004, Thompson was suspended with pay. Quorum informed Thompson
that he was suspended, in part, for deliberately and continuously refusing to comply with Quorum’s
Code of Conduct and his resulting insubordination.
In February 2005, Thompson joined the National Guard and in July 2005, Thompson was
deployed to Iraq. Thompson served in Iraq for about a year. After his return from Iraq, Quorum
completed Thompson’s employment termination—effective July 28, 2006—which it had begun in
January 2005. Quorum informed Thompson that he was being terminated for violating the Code of
Conduct by failing to report his fraud concerns to Quorum and by failing to cooperate with
Quorum’s subsequent investigation.
Thompson filed a retaliatory discharge lawsuit on October 25, 2006, alleging that Quorum
terminated him in retaliation for his protected conduct of filing a False Claims Act suit, in violation
of 31 U.S.C. § 3730(h). Prior to trial, the district court held that Thompson had engaged in protected
conduct and that Quorum knew of this protected conduct at the time of Thompson’s suspension and
termination. See Thompson v. Quorum Health Resources, LLC, No. 1:06-CV-168, 2009 WL
4758752, at *6 (W.D. Ky. Dec. 7, 2009). The court therefore concluded that Thompson met the first
two prongs of a retaliatory discharge claim. Id.
6
Case: 10-5685
Document: 006111346717
Filed: 06/22/2012
Page: 7
No. 10-5685
Thompson v. Quorum Health Resources, LLC
Before trial, Thompson moved in limine to exclude evidence of the government’s decision
not to intervene in his qui tam suit, arguing that the government’s decision was irrelevant to the
merits of his retaliatory discharge claim. See Thompson v. Quorum Health Resources, LLC, No.
1:06-CV-168, 2010 WL 234801, at *3–4 (W.D. Ky. Jan. 13, 2010). Quorum argued that the
government’s decision not to intervene was relevant to refute Thompson’s allegations that Quorum
did not cooperate with the government’s investigation, and because Thompson alleged that Quorum
terminated him in order to prevent him from cooperating with the government. Id. at *4. The
district court held that the outcome of the underlying qui tam case, and the government’s decision
not to intervene in that case, was irrelevant to whether Quorum retaliated against Thompson. Id.
The court reasoned “that the government’s decision not to intervene may have been based on a
variety of factors, so it [was] not necessarily probative . . . Further, the evidence [was] likely to
mislead or confuse the jury.” Id. The court concluded “that the prejudicial effect of introducing the
government’s decision not to intervene outweigh[ed] any probative value.” Id.
Thompson’s case was tried to a jury over five days. During the pretrial conference, Quorum
argued that the details of Thompson’s qui tam allegations were irrelevant to his retaliation case in
light of Quorum’s stipulation that Thompson had engaged in protected activity. Thompson argued
that the specifics of his qui tam allegations were relevant to show that Quorum retaliated against him
in an attempt to cover up the fraud occurring at the company. Thompson also argued that the
presence of fraud at the company and Quorum’s failure to investigate that fraud were relevant to
whether Quorum’s stated reason for firing Thompson was pretextual, because evidence of fraud and
failure to investigate it showed that Quorum was selectively enforcing its Code of Conduct against
7
Case: 10-5685
Document: 006111346717
Filed: 06/22/2012
Page: 8
No. 10-5685
Thompson v. Quorum Health Resources, LLC
Thompson while ignoring other Code violations. The court agreed that, to the extent that Quorum
knew of and covered up or failed to investigate fraud or compliance violations at Quorum, this
evidence was relevant to the pretext issue. The court also ruled, however, that it would allow
Quorum to introduce evidence during trial that Thompson dismissed his qui tam case.
At trial, Thompson elicited testimony from Taylor Cook, his former supervisor, about
Thompson’s fraud allegations related to the management agreement. Thompson then called AUSA
Campbell and elicited testimony about Thompson’s meetings with Campbell, Campbell’s November
29, 2004 letter to Quorum informing it that Thompson had filed a False Claims Act suit, and
Campbell’s instruction to Thompson not to reveal the fact that he had filed the suit. After
Campbell’s direct examination concluded, Quorum’s counsel argued that Campbell’s testimony had
opened the door to introduction of evidence that the government had declined to intervene in
Thompson’s qui tam suit. The district court ruled that Quorum could not elicit testimony about the
government’s decision not to intervene in the suit. It reasoned that the government’s reasons for not
intervening were often complex, rendering evidence of that decision of minimal relevance to
Thompson’s retaliation claim. The court also declined to let Quorum introduce evidence that
Thompson voluntarily dismissed the qui tam case, reversing its pretrial ruling. Quorum moved for
a mistrial, which the court denied. Instead, the court instructed the jury that the outcome of the
government’s investigation of Quorum and the outcome of the qui tam suit were not relevant to
Thompson’s retaliation suit. Thompson then testified about the suspicions of fraud that led him to
file a False Claims Act lawsuit against Quorum.
8
Case: 10-5685
Document: 006111346717
Filed: 06/22/2012
Page: 9
No. 10-5685
Thompson v. Quorum Health Resources, LLC
Quorum General Counsel Chris Kelly also testified. Kelly conceded that prior to receiving
Campbell’s letter informing Quorum of Thompson’s qui tam lawsuit, Quorum had not made a
definitive decision to fire Thompson. Kelly also testified that Quorum had not yet received a copy
of Thompson’s qui tam complaint when Epstein Becker conducted its investigation or when
Thompson was suspended. Kelly testified that the government assessed no fines or penalties against
Quorum as a result of Thompson’s fraud allegations.
Quorum also elicited testimony from
MCMC CFO Ricky Brown. Brown testified about the nature of Thompson’s fraud allegations and
further opined that the Board was adequately informed of changes to the management agreement.
Vicky McFall, MCMC’s CEO at the time of trial, also testified that MCMC continued to engage
Quorum for management services and continued to use the same GPO used during Thompson’s
tenure as CEO after Thompson was fired.
On February 5, 2010, the jury found that Quorum violated 31 U.S.C. § 3730(h) when it
discharged Thompson, and awarded him $400,644.00 in back pay, $70,000 in front pay and $30,000
for pain and suffering. The district court entered judgment against Quorum, doubling the jury’s
back pay award pursuant to 31 U.S.C. § 3730(h), for a total damages award of $901,288.00.
Quorum moved for judgment as a matter of law, or, in the alternative, for a new trial. The district
court denied Quorum’s motion. Quorum now appeals.
II.
On appeal, Quorum first argues that it is entitled to a new trial because the district court
permitted Thompson to testify at length about the fraud allegations that underlay his qui tam
complaint but prohibited Quorum from introducing evidence that the government declined to
9
Case: 10-5685
Document: 006111346717
Filed: 06/22/2012
Page: 10
No. 10-5685
Thompson v. Quorum Health Resources, LLC
intervene and that Thompson dismissed his qui tam complaint with prejudice. Upon review, we
conclude that the district court did not err in denying Quorum’s motion for a new trial.
We review the district court’s denial of a motion for a new trial for an abuse of discretion.
See Tisdale v. Fed. Express Corp., 415 F.3d 516, 528 (6th Cir. 2005). Reversal is appropriate only
if we have “a definite and firm conviction that the trial court committed a clear error of judgment.”
Barnes v. Owens-Corning Fiberglas Corp., 201 F.3d 815, 820 (6th Cir. 2000) (internal quotation
marks omitted). A motion for a new trial should be granted “only when a jury has reached a
seriously erroneous result as evidenced by: (1) the verdict being against the weight of the evidence;
(2) the damages being excessive; or (3) the trial being unfair to the moving party in some fashion,
i.e., the proceedings being influenced by prejudice or bias.” Mitchell v. Boelcke, 440 F.3d 300, 303
(6th Cir. 2006) (internal quotation marks omitted).
We review a district court’s evidentiary rulings—including its decision to admit or exclude
evidence pursuant to Federal Rule of Evidence 403—for an abuse of discretion. Nolan v. Memphis
City Sch., 589 F.3d 257, 264 (6th Cir. 2009); Paschal v. Flagstar Bank, 295 F.3d 565, 576 (6th Cir.
2002). “Even if a district court’s evidentiary ruling is erroneous, a new trial is not warranted if the
abuse of discretion constituted harmless error.” Nolan, 589 F.3d at 264–65.
Quorum argues that evidence of Thompson’s fraud allegations was irrelevant to whether
Quorum’s stated reason for discharging him was pretextual. It further argues that even if such
evidence had probative value, its value was substantially outweighed by the danger of unfair
prejudice, confusion of the issues and misleading the jury.
10
Case: 10-5685
Document: 006111346717
Filed: 06/22/2012
Page: 11
No. 10-5685
Thompson v. Quorum Health Resources, LLC
“Evidence is relevant if: (a) it has any tendency to make a fact more or less probable than
it would be without the evidence; and (b) the fact is of consequence in determining the action.” F.
R. Evid. 401. Thompson’s theory at trial was that Quorum knew that Cook was defrauding MCMC
but was willfully blind to Cook’s fraud so that it would not have to report it to the government
through a self-compliance reporting program. Thompson argued that, in order to show that
Quorum’s stated reason for firing him was pretextual, he needed to show that Quorum conducted
a sham investigation into his allegations—thereby demonstrating that Quorum was not truly
committed to enforcing its Code of Conduct.
The district court did not err in allowing Thompson to introduce evidence relating to his
allegations that Cook was defrauding MCMC by misleading its Board. In order to show that
Quorum did not actually fire him for violating the Code of Conduct, Thompson adduced evidence
that, after he submitted his audit responses to Taylor Polson, Quorum conducted a relatively minimal
investigation into his fraud allegations. In order to pursue his theory that Quorum was not truly
seeking to uncover and correct compliance issues and that his firing for failing to comply with the
Code of Conduct was therefore implausible, Thompson needed to demonstrate that fraud was
occurring at Quorum and that the company failed to conduct an investigation sufficiently thorough
to reveal it.
A more significant question exists as to whether the district court erred in allowing
Thompson’s testimony regarding Cook’s alleged fraud to exceed that which was necessary to pursue
his theory of the case. Thompson testified extensively about the complexities of the management
agreement between Quorum and MCMC and the various ways in which he believed Cook’s conduct
11
Case: 10-5685
Document: 006111346717
Filed: 06/22/2012
Page: 12
No. 10-5685
Thompson v. Quorum Health Resources, LLC
defrauded the hospital. The introduction of this evidence did not prejudice Quorum, however,
because Quorum was given the opportunity to—and did—adduce substantial evidence to refute
Thompson’s fraud allegations. Quorum called CFO Ricky Brown, who testified to the complexities
of the management agreement, and opined that Quorum did not, through Cook, defraud MCMC.
Quorum also called Vicky McFall, who testified that MCMC still employed Quorum to provide
hospital management services and that MCMC still used the GPO to which it switched during
Thompson’s tenure as CEO. Quorum was thus able to introduce evidence tending to refute
Thompson’s testimony that MCMC was tricked into switching to an unfavorable GPO through
Cook’s malfeasance. Finally, and perhaps most importantly, Quorum General Counsel Kelly
testified that Quorum was not assessed any fines or penalties by the government as a result of
Thompson’s fraud allegations. Thus, Quorum was able to counter Thompson’s testimony that Cook
was defrauding MCMC. Moreover, the district court instructed the jury that the outcome of the
government’s investigation of Quorum was not relevant to the merits of Thompson’s case, limiting
the potential prejudicial effect Thompson’s testimony about his fraud allegations could have had on
the jury. See Gillard v. Mitchell, 445 F.3d 883, 898 (6th Cir. 2006) (trial court’s giving of limiting
instructions may cure prejudice.)
Turning to the government’s decision not to intervene in Thompson’s qui tam case and
Thompson’s subsequent dismissal of the suit with prejudice, the district court did not err in
excluding this evidence. The government did not decline to intervene in Thompson’s suit until years
after his termination, undermining any relevance this evidence might have had to the merits of
Thompson’s retaliatory discharge claim. Moreover, the district court correctly noted that the “the
12
Case: 10-5685
Document: 006111346717
Filed: 06/22/2012
Page: 13
No. 10-5685
Thompson v. Quorum Health Resources, LLC
government’s decision not to intervene does not necessarily indicate that . . . the [qui tam] case had
no merit. The government may choose not to intervene for a variety of reasons. Likewise, a
plaintiff may dismiss a case voluntarily for any number of reasons—cost, time, etc.” (DE 162,
Mem. Op., at 8.)
Even if the government’s non-intervention and Thompson’s dismissal of the qui tam action
were of some limited relevance, Quorum was not prejudiced by the exclusion of this evidence.
Through Kelly, Quorum introduced evidence that it was neither fined nor assessed penalties as a
result of the government’s investigation into Thompson’s qui tam allegations. Quorum was
therefore able to undermine Thompson’s claim that Quorum had defrauded MCMC, and the district
court properly denied Quorum’s motion for a new trial.
III.
Quorum next argues that it is entitled to judgment as a matter of law because Thompson
failed to present sufficient evidence to prove that Quorum’s proffered reason for terminating his
employment was pretextual. After reviewing the record, we conclude that the district court did not
err in denying Quorum’s motion for judgment as a matter of law.
We review a district court’s denial of a motion for judgment as a matter of law de novo.
Noble v. Brinker Int’l, Inc., 391 F.3d 715, 720 (6th Cir. 2004). Judgment as a matter of law is
appropriate only when “viewing the evidence in the light most favorable to the non-moving party,
there is no genuine issue of material fact for the jury, and reasonable minds could come to but one
conclusion, in favor of the moving party.” Id. (internal quotations marks omitted.) In other words,
judgment as a matter of law should be rendered only when “there is no legally sufficient evidentiary
13
Case: 10-5685
Document: 006111346717
Filed: 06/22/2012
Page: 14
No. 10-5685
Thompson v. Quorum Health Resources, LLC
basis for a reasonable jury to find for [the non-moving] party” on a material issue. Id. at 722
(internal quotation marks omitted). “Credibility determinations, the weighing of the evidence, and
the drawing of legitimate inferences from the facts are jury functions, not those of a judge.” Reeves
v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000) (internal quotation marks omitted).
Quorum argues that Thompson did not offer sufficient evidence from which a reasonable
jury could infer that Quorum’s proffered reason for firing him was pretextual.1 “A plaintiff will
usually demonstrate pretext by showing that the employer’s stated reason for the adverse
employment action either (1) has no basis in fact, (2) was not the actual reason, or (3) is insufficient
to explain the employer’s action.” White v. Baxter Healthcare Corp., 533 F.3d 381, 393 (6th Cir.
2008). “However, the plaintiff may also demonstrate pretext by offering evidence which challenges
the reasonableness of the employer’s decision to the extent that such an inquiry sheds light on
whether the employer’s proffered reason for the employment action was its actual motivation.” Id.
(internal quotation marks omitted).
At trial, Quorum argued that it had discharged Thompson because he violated the Code of
Conduct by failing to report compliance issues and by failing to cooperate with Quorum’s
1
To make out a claim for retaliatory discharge under the False Claims Act, a plaintiff “must
show: (1) he engaged in a protected activity; (2) his employer knew that he engaged in the protected
activity; and (3) his employer discharged or otherwise discriminated against the employee as a result
of the protected activity.” Yuhasz v. Brush Wellman, Inc., 341 F.3d 559, 566 (6th Cir. 2003). Prior
to trial, the district court ruled that Thompson had met the first two prongs of this test, and material
issues of fact precluded summary judgment as to the third prong. Thompson, 2009 WL 4758752,
at *6–7. With respect to the third prong, the court found that Quorum had proffered a legitimate,
non-discriminatory reason for suspending and later terminating Thompson—his violation of the
Code of Conduct—and therefore the only issue remaining for trial was whether Thompson could
present evidence demonstrating that Quorum’s legitimate, non-discriminatory reason for taking
adverse employment action against Thompson was pretextual. Id. at *7.
14
Case: 10-5685
Document: 006111346717
Filed: 06/22/2012
Page: 15
No. 10-5685
Thompson v. Quorum Health Resources, LLC
investigation into his fraud allegations. However, Thompson presented evidence from which the
jury could have inferred that this was not the actual reason for Thompson’s termination. His proof
included evidence that Quorum knew that Thompson had violated the Code of Conduct by failing
to report compliance concerns as early as August 2004, when Thompson revealed his suspicions of
fraud to John Taylor, MCMC’s auditor. But Quorum did not terminate Thompson for violating the
Code of Conduct in August 2004. Rather, from September through November 2004, Quorum
threatened adverse employment action against Thompson, but took none. Even though Thompson
continued to rebuff Quorum’s requests that he elaborate on his fraud concerns and assist in the
investigation, Quorum kept giving him additional chances to do so. Quorum demonstrated a
willingness to meet with Thompson to discuss his fraud concerns and to allow him additional
chances to cooperate with its investigation, until it was informed that he had filed a qui tam suit, in
late November of 2004. The jury permissibly could have inferred that if Thompson’s violations of
the Code of Conduct were the legitimate non-discriminatory reason for Thompson’s termination,
Quorum would have terminated him soon after it learned that he had violated the Code of Conduct,
in August 2004, or after he declined to cooperate with the investigation in September through
November of 2004. The fact that Quorum did not terminate Thompson soon after it learned of his
violations of the Code of Conduct gave rise to an inference of pretext.
We have held that
[w]here an adverse employment action occurs very close in time after an employer
learns of a protected activity, such temporal proximity between the events is
significant enough to constitute evidence of a causal connection for the purposes of
satisfying a prima facie case of retaliation. But where some time elapses between
when the employer learns of a protected activity and the subsequent adverse
15
Case: 10-5685
Document: 006111346717
Filed: 06/22/2012
Page: 16
No. 10-5685
Thompson v. Quorum Health Resources, LLC
employment action, the employee must couple temporal proximity with other
evidence of retaliatory conduct to establish causality.
Mickey v. Zeidler Tool & Die Co., 516 F.3d 516, 525 (6th Cir. 2008).
In DiCarlo v. Potter, 358 F.3d 408, 421–22 (6th Cir. 2004), we held that the passage of only
twenty-one days between an employee’s protected conduct and his termination constituted indirect
evidence of a causal connection sufficient to create an inference of retaliatory motive. See also
Shefferly v. Health Alliance Plan of Mich., 94 F. App’x 275, 285 (6th Cir. 2004) (passage of less
than three weeks between employer’s receipt of notice of plaintiff’s EEOC charge and her
termination gave rise to inference of discrimination).
Quorum suspended Thompson roughly one month after learning from Campbell’s November
29, 2004 letter that Thompson had filed a False Claims Act suit. Such temporal proximity between
when Quorum became aware of Thompson’s protected conduct and when he suffered an adverse
employment action gives rise to an inference of retaliatory motive.2
2
Quorum argues that Thompson’s suspension was not an adverse employment action because
he was suspended with pay. We have held that an employee does not suffer an adverse employment
action when she is placed on paid administrative leave pending the completion of a timely internal
investigation. Peltier v. United States, 388 F.3d 984, 988 (6th Cir. 2004) (“[A] suspension with pay
and full benefits pending a timely investigation into suspected wrongdoing is not an adverse
employment action.” (quoting White v. Burlington N. & Santa Fe Ry. Co., 364 F.3d 789, 803 (6th
Cir. 2004) (internal quotation marks omitted) (emphasis omitted) (en banc), abrogated on other
grounds by Burlington N.A. Santa Fe Ry. Co. v. White, 548 U.S. 53 (2006))).
However, this case is unlike Peltier. Thompson was not suspended pending an internal
investigation into his alleged wrongdoing; rather, he was suspended after Epstein Becker had
conducted its investigation, between November 29 and December 15, 2008. (Appellant’s App’x,
at 25.) Further, Thompson was not suspended to allow Quorum to investigate his alleged Code
violations, but rather was suspended to assuage Campbell, who had told Quorum to not retaliate
against Thompson. (Id. at 26.) Epstein Becker explicitly stated that Quorum had already
determined that Thompson would likely be terminated at the time of his suspension but delayed the
16
Case: 10-5685
Document: 006111346717
Filed: 06/22/2012
Page: 17
No. 10-5685
Thompson v. Quorum Health Resources, LLC
Further, Thompson established that Quorum did not yet have Thompson’s qui tam complaint
at the time of Epstein Becker’s investigation or his suspension. Thompson argued that without his
qui tam complaint, Quorum could not have conducted a sufficient investigation to determine
whether his fraud allegations were meritorious.
Thompson argued that Epstein Becker’s
investigation was therefore a sham investigation which Quorum used to buttress its decision to
suspend and terminate Thompson—and to obscure its retaliatory motive for his termination.
According to Thompson’s theory of the case, Quorum’s sham investigation showed that the
company was not truly concerned with compliance with its Code of Conduct; if it had been, it would
not have completed its investigation until it had the qui tam complaint and would have conducted
a thorough investigation. The “sham investigation” called into question Quorum’s claim that it
terminated Thompson for failing to comply with the Code of Conduct. The jury permissibly could
have inferred that Quorum conducted a sham investigation into Thompson’s fraud allegations, that
this showed that Quorum was not committed to correcting compliance issues, and that it was
therefore unlikely that Thompson was actually fired because he had violated the Code of Conduct.
Finally, Quorum was unable to articulate any event that occurred between Thompson’s suspension
and his termination that ultimately caused Quorum to terminate Thompson. The temporal proximity
between the receipt of Campbell’s letter and Thompson’s suspension, Quorum’s arguably sham
terminating him in deference to Campbell. No internal investigation of Thompson’s Code violations
was conducted after he was suspended and Quorum began to process his termination soon thereafter.
Therefore, Thompson’s suspension preceding termination was essentially a de facto termination.
Finally, Thompson was never reinstated after his suspension. Peltier is inapplicable where, as here,
an employee is suspended for a purpose other than to allow his employer to conduct a timely internal
investigation into his alleged wrongdoing.
17
Case: 10-5685
Document: 006111346717
Filed: 06/22/2012
Page: 18
No. 10-5685
Thompson v. Quorum Health Resources, LLC
investigation, and Quorum’s inability to articulate what prompted it to move from suspension to
termination supported the jury’s inference of retaliatory motive. Accordingly, on these facts, the
jury was entitled to infer that Quorum fired Thompson in retaliation for his filing a qui tam
complaint against it.
Quorum points to Epstein Becker’s December 15, 2004 letter as evidence that it had decided
to terminate Thompson before it learned that he had filed a qui tam suit. This letter stated that,
before it knew that Thompson had filed a qui tam suit, Quorum had already concluded that
Thompson would likely be discharged based on his failure to comply with the reporting and
disclosure obligations imposed by the Code of Conduct. However, Kelly testified that Quorum had
not made a definitive decision to fire Thompson prior to the receipt of Campbell’s letter. On this
evidence, the jury was entitled to view this letter as a self-serving attempt by Quorum to insulate
itself from a retaliation claim.
In sum, after reviewing the record, we cannot say that there was no legally sufficient
evidentiary basis upon which the jury reasonably could have found that Quorum’s proffered reason
for terminating Thompson was pretextual.
Quorum claims that denying it judgment as a matter of law will immunize employees from
the adverse consequences of failing to comply with their employers’ codes of conduct because
employers will not be able to discipline those employees who violate their company’s code of
conduct without fear of facing a retaliatory discharge lawsuit. We do not agree. Quorum was
entitled to terminate Thompson for violating its Code of Conduct. But the jury found that Quorum
did not terminate Thompson for this reason but rather terminated him in retaliation for his filing a
18
Case: 10-5685
Document: 006111346717
Filed: 06/22/2012
Page: 19
No. 10-5685
Thompson v. Quorum Health Resources, LLC
False Claims Act suit. The jury was entitled to reject Quorum’s proffered reason for firing
Thompson as pretextual, and we see no adverse consequences that will flow from such a
determination.
IV.
For the foregoing reasons, we affirm the judgment of the district court.
19
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?