United States of America v. American Fuel Cell and Coated Fabrics Company et al

Filing 106

MEMORANDUM OPINION AND ORDER. Signed by Honorable Susan O. Hickey on March 2, 2015. (cnn)

IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
EL DORADO DIVISION

UNITED STATES OF AMERICA ex rel.
DANNY MICHAEL RAY

VS.

PLAINTIFF

CASE NO. 1:09-CV-01016

AMERICAN FUEL CELL AND COATED
FABRICS COMPANY and
THE ZODIAC GROUP

DEFENDANTS

MEMORANDUM OPINION AND ORDER
Before the Court is Defendant American Fuel Cell and Coated Fabrics Company’s
(“Amfuel”) Motion for Summary Judgment. (ECF No. 90). Plaintiff Danny Michael Ray
(“Ray”) has responded. (ECF No. 94). Amfuel has replied. (ECF No. 99). The matter is ripe
for the Court’s consideration. Ray alleges causes of action for FCA retaliation and state law
breach of employment contract.
BACKGROUND
Amfuel manufactures rubberized containers that hold fuel (“fuel cells”) and are used in
U.S. Military aircraft and commercial aircraft. (ECF No. 92, ¶ 1). During the time at issue in
this case, Amfuel also manufactured towable drums for the transport of fuel or water for the U.S.
Military. (ECF No. 92, ¶ 2). Amfuel utilizes unique, proprietary internal processes, which it
refers to as “NP 474,” to manufacture fuel cells that meet the performance specifications
required by the U.S. Government for fuel cells to be used in military aircraft. (ECF No. 92, ¶ 3).
Amfuel’s quality control department conducts extensive inspection of the fuel cells and
towable drums at different stages of the manufacturing process. (ECF No. 92, ¶ 5). If a quality
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control inspector, Amfuel engineer, or other Amfuel employee concludes that the product has
defects, then the quality control department and an engineer decide whether the product can be
repaired or whether it should be scrapped. (ECF No. 92, ¶ 6). Repairs are a planned part of the
manufacturing process.

(ECF No. 92, ¶ 7).

The products are largely handmade with a

significant error rate. (ECF No. 92, ¶ 8). Therefore, the manufacturing process anticipates
repairs to items that fail quality inspection. (ECF No. 92, ¶ 9).
After the products are built, Amfuel’s quality control department conducts a number of
performance tests before submitting the products to the government. (ECF No. 92, ¶ 10).

If the

product fails a test, it is either repaired or scrapped. (ECF No. 92, ¶ 13). The U.S. Military’s
Defense Contract Agency (“DCMA”) oversees some of the pre-delivery inspections and
performance tests.
Amfuel is one of only two manufacturers of a certain type of fuel cell used for some
military aircraft, such as the F-18. As a result, Amfuel has a significant business interest in
protecting data related to its proprietary manufacturing processes.

Furthermore, Amfuel’s

manufacturing processes are regulated by the International Traffic in Arms Regulations
(“ITAR”).

ITAR prohibits the export of arms and related technical data outside the U.S.

Information required for the design, development, production, and manufacture of defense
articles is covered by ITAR.
Amfuel implemented company policies to ensure that there are no outside disclosures of
sensitive, proprietary information. At the time at issue, Amfuel’s Policy Manual provided a
confidentiality policy, which stated:
It is the policy of the Company that internal business affairs of the
organization, particularly confidential information and trade
secrets, represent Company assets that each employee has a
continuing obligation to protect…Employees authorized to have
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access to confidential information may be required to sign special
nondisclosure agreements and must treat the information as
proprietary Company property for which they are personally
responsible.

(ECF No. 92, Ex. G). Amfuel’s Policy Manual also contained a “Use of Communications
Systems” policy, which provided:
All Company communications services and equipment, including
the messages transmitted or stored by them, are the sole property
of the Company… Employees should not use email… or any other
insecure communications system to communicate confidential,
proprietary or trade secret information… All outgoing messages,
whether by mail, facsimile, email, internet transmission, or any
other means should be… work-related… Improper use of
Company communication services and equipment will result in
discipline, up to and including termination.
(ECF No. 92, Ex. G). Amfuel’s Integrity Handbook reiterates these policies. (ECF No. 92, Ex.
H). During the time relevant to this lawsuit, Amfuel also had an Electronic Communications
Policy, which provided that in most instances, confidential information should never be
communicated via email. (ECF No. 92, Ex. I at 13). It further indicated that Amfuel only
permits employees to work remotely under certain circumstances, such as for medical reasons.
(ECF No. 92, Ex. I at 16).
Plaintiff Ray was hired by Amfuel in March 2007 as a process engineer. Amfuel offered
to pay Ray additional compensation if it implemented any of his recommendations and they
resulted in cost savings for Amfuel. Amfuel maintains that a final employment contract was
never entered into with Ray, but Ray contends that he signed and returned a revised version of a
draft contract which constitutes his employment contract. Ray asserts that Amfuel CEO Bill
Mow signed this contract. Amfuel denies that the contract was ever adopted and claims the
contract is not in its possession. During discovery, Ray indicated that he had a copy of the
contract but now states he has been unable to locate a final and executed copy of the contract.
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The draft contract that Ray asserts he executed and returned to Amfuel provides that the
“Employee shall not, during the term of this Contract of employment or thereafter, disclose any
information relative to the business affairs of Amfuel.” (ECF No. 92, Ex. K). Ray received
copies of Amfuel’s policies and Integrity Handbook when he was hired. (ECF No. 92, Ex. L &
Ex. M).
Amfuel assigned Ray to work on its fuel cell production line. As a process engineer,
Ray’s primary job duties were evaluating the manufacturing process and making
recommendations to improve it. He worked with quality control inspectors during different
stages of the manufacturing process to determine if fuel cells needed to be repaired or scrapped
because of defects. However, Ray was not involved in the final stages of inspection and
shipping.
Over the course of Ray’s employment, he submitted various process improvements to
Amfuel management.

In the first several months after he was hired, Ray started to chart

humidity data recorded by other Amfuel employees in previous years. He found that on hot
days, the humidity in certain parts of the plant were not always in compliance with Amfuel’s
internal manufacturing procedures and could affect the cement bonding in the fuel cells. He
shared these findings with his supervisors and recommended that Amfuel obtain a system that
would control the humidity throughout the production areas of the 325,00 square foot plant. The
plant had never previously been humidity controlled in all areas, but Ray believed that humidity
control would result in significant cost savings because it would reduce repairs required to the
cement bonding. Ray’s supervisor, William Berry 1, told him that Amfuel had been aware of the
humidity issue for several years but did not want to spend the money to correct the problem.

1

William Berry was formerly a plaintiff in this lawsuit. Berry’s claims were voluntarily dismissed with prejudice
on November 4, 2014. (ECF No. 86).

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At some point before October 2007, Ray was assigned to work in Amfuel’s molding area,
which was at the opposite end of the plant from the fuel cell area. Around late October or early
November 2007, Amfuel assigned Ray to the towable drum department near the molding area.
No one told Ray why he was moved and he did not ask, but he believed he was moved because
he had voiced concerns about humidity problems in the manufacturing process. Around the
same time that Ray was reassigned to the towable drum area, Amfuel CEO Bill Mow told Ray
that a work instruction Ray did for the autoclave area of the plant was wrong. As a result of
these incidents, Ray concluded that he would be terminated soon.
Ray testified that he attempted to email himself documents from Amfuel because he
“wanted to have a showing of the type of work that [he] was doing, the quality of work, to show
prospective employers.” (ECF No. 92, Ex. D at 42). He “didn’t intend to be a whistleblower at
first.” (ECF No. 92, Ex. D at 30). After the emails failed to go through, Ray told his supervisor,
Jason Moss, that he “just wanted copies of his work.” (ECF No. 92, Ex. D at 42). Moss showed
Ray how to copy and save the information onto a flash drive by saving several documents for
Ray. He told Ray that he could save other files onto the flash drive, and Ray subsequently saved
all of the documents he had attempted to email. The flash drive contained over 2,000 pages of
documents, including documents related to process improvements on military products and data
analysis related to his humidity studies. Ray does not deny that he saved documents disclosing
process improvements on military products, but he maintains that it was not intentional. Ray
also took hard copies of documents home with him.
Amfuel’s Human Resources Director, Ben Bauer, and Amfuel’s management information
systems manager (“MIS Manager”) were notified when Ray attempted to send the email. On
January 31, 2008, they met with Ray to ask why he tried to send an email with a large volume of

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attachments to an outside email address. Ray told them that the documents were personal in
nature, did not contain proprietary information, and he wanted to work from home and needed
the documents. He asserted that his old supervisor had given him permission and his current
supervisor, Moss, aided him after the email was blocked. Bauer conducted an investigation and
concluded that Moss was not aware of the volume and nature of the information Ray was
attempting to acquire. Bauer issued a disciplinary action on February 8, 2008, which stated that
the documents Ray attempted to email contained “factory and experimental data relating to the
manufacture of these products as well as specifications and other product data.” (ECF No. 92,
Ex. R). Ray has admitted that Bauer’s findings in the write-up are accurate, but maintains that he
did not intend to email himself proprietary information and that Moss was aware of the volume
of documents.
Shortly thereafter, Amfuel presented its employees in the engineering department with a
more stringent non-disclosure agreement. On February 15, 2008, Ray emailed Bauer to notify
him of his refusal to sign the new non-disclosure agreement for several reasons, including that he
believed he had a right to copies of his work to show potential employers “if” or “when” he
leaves. (ECF No. 92, Ex. S). That same day, Amfuel’s maintenance director told Bauer that Ray
had requested work-related documents from him.

On February 18, 2008, two employees

reported to Bauer that Ray parked his car in the back of the Amfuel plant near his work station
instead of the front employee parking lot. Bauer suspected Ray would try to carry documents off
the premises. Later, he and Mow reviewed security footage showing Ray moving boxes from
the building to his car. They believed the boxes contained proprietary information.
As a result of Ray’s actions, Bauer and the MIS Manager investigated Ray’s email
activity. They discovered that he had sent at least four emails to outside addresses over several

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months that contained personal work as well as ITAR related documents. Bauer recommended
to Mow that Ray be terminated for cause immediately. Mow approved this recommendation,
and Amfuel terminated Ray on February 25, 2008. Amfuel’s stated reason for Ray’s termination
was violation of Amfuel’s policies regarding confidential information and the use of email. Ray
alleges that he was terminated because of his studies on humidity. Ray came to this conclusion
because Amfuel reassigned him to work in a different part of the plant and Mow disagreed with
his work instruction on the autoclave area. He believes that Amfuel did not want people to know
about his humidity studies. No one in Amfuel management ever told Ray not to discuss the
humidity issue, however, Ray claims that some lower level employees told him to be careful in
voicing concerns about the humidity.
It is undisputed that Ray did not decide to become a whistleblower until he had talked to
an attorney about his termination. Ray filed a False Claims Act (“FCA”) qui tam action against
Amfuel on March 24, 2009, alleging that humidity levels inside the Amfuel plant were not in
compliance with NP 474, Amfuel’s unique, internal manufacturing processes. He also asserted
causes of action for FCA retaliation and state law breach of employment contract. On March 4,
2013, this Court dismissed the qui tam action. (ECF No. 52). Only Ray’s FCA retaliation and
breach of employment contract claims remain.
LEGAL STANDARD
The standard of review for summary judgment is well established. When a party moves
for summary judgment, “[t]he court shall grant summary judgment 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.” Fed. R. Civ. P. 56(a); Krenik v. County of LeSueur, 47 F.3d 953 (8th Cir. 1995).
This is a “threshold inquiry of…whether there is a need for trial—whether, in other words, there

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are genuine factual issues that properly can be resolved only by a finder of fact because they may
reasonably be resolved in favor of either party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
250 (1986); see also Agristor Leasing v. Farrow, 826 F.2d 732 (8th Cir. 1987). A fact is
material only when its resolution affects the outcome of the case. Anderson, 477 U.S. at 248. A
dispute is genuine if the evidence is such that it could cause a reasonable jury to return a verdict
for either party. Id. at 252.
DISCUSSION
A. Retaliation
The FCA whistleblower statute provides a cause of action for employees who are
discharged because of “lawful acts done by the employee . . . in furtherance of [a civil action for
false claims].” 31 U.S.C. § 3730(h); Wilkins v. St. Louis Hous. Auth., 314 F.3d 927, 931 (8th
Cir. 2002). In order to establish an FCA whistleblower retaliation claim, a plaintiff must prove
that: (1) the plaintiff was engaged in conduct protected by the FCA; (2) the plaintiff’s employer
knew that the plaintiff engaged in the protected activity; (3) the employer retaliated against the
plaintiff; and (4) the retaliation was motivated solely by the plaintiff’s protected activity.
Schuhardt v. Washington Univ., 390 F.3d 563, 566 (8th Cir. 2004).
1. Protected Activity
Ray contends that he was engaged in a protected activity when he conducted his humidity
studies and sent emails with Amfuel documents to his personal email account. He asserts that he
had a good faith, objectively reasonable belief that Amfuel was manufacturing fuel cells that
were not in compliance with NP 474, and that taking documents, whether for personal or legal
purposes, was an act in furtherance of uncovering fraud against the government. Amfuel argues
that Ray conducted his humidity studies to help the company improve its manufacturing process,

8

which was part of his job, and that Ray freely admits he took documents in order to have
examples of his work for future employers.
Protected activity is established when the employee's actions satisfy two conditions: (1)
the employee’s conduct must have been in furtherance of an FCA action; and (2) the employee’s
conduct must be aimed at matters which are calculated, or reasonably could lead, to a viable
FCA action. Schuhardt, 390 F.3d at 567. The second condition is satisfied if the employee in
good faith believes, and a reasonable employee in the same or similar circumstances might
believe, that the employer is possibly committing fraud against the government. Id. (quoting
Moore v. Cal. Inst. of Tech. Jet Propulsion Lab., 275 F.3d 838, 845 (9th Cir. 2002)). “The
protected activity element of a retaliation claim does not require the plaintiff to have filed an
FCA lawsuit or to have developed a winning claim at the time of the alleged retaliation.”

Id.

(quoting United States ex rel. Karvelas v. Melrose-Wakefield Hosp., 360 F.3d 220, 236 (1st Cir.
2004)).
Ray has not established that his humidity studies were in furtherance of an FCA action or
that they reasonably could have led to a viable FCA action.

He admits that, when he

computerized the humidity data, he was not contemplating a whistleblower action, “he was just
trying to help the company.” (ECF No. 92, Ex. D at 30). Moreover, he cannot show that his
investigations could have led to a whistleblower action because his claims about the legal
significance of humidity levels are unsupported in the record. It is undisputed that NP 474 is
Amfuel’s unique, internal processes to manufacture fuel cells that meet the performance
specifications required by the U.S. Government. Ray alleges that the fuel cells were not being
made in compliance with the humidity standards set forth in NP 474, and that this deviation
without government approval resulted in false claims being submitted to the government.

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However, Ray does not offer any legal authority to support the assertion that Amfuel cannot
change aspects of its manufacturing process without government approval. Furthermore, the
Amfuel plant has never had humidity control throughout the entire facility. If the government
required Amfuel to seek approval for its manufacturing processes, including the humidity levels
during manufacturing as Ray contends, then presumably the government approved the process
without humidity control throughout the plant.
Moreover, other courts that have dealt with the “in furtherance of” condition have found
that merely grumbling to an employer about regulatory violations or reporting wrongdoing to
supervisors is not acting in furtherance of a qui tam action. See Mahony v. Universal Pediatric
Servs., Inc., 753 F. Supp. 2d 839, 847 (S.D. Iowa 2010) aff'd, 643 F.3d 1103 (8th Cir. 2011);
McKenzie v. BellSouth Telecommunications Inc., 219 F.3d 508, 516 (6th Cir. 2000); U.S. ex rel.
Yesudian v. Howard Univ., 153 F.3d 731, 743 (D.C. Cir. 1998). An internal grievance can serve
as the basis for an FCA lawsuit. Schuhardt, 390 F.3d at 567. However, there should be some
evidence that the employee performed the “investigation for” or provided “assistance in” an FCA
action. U.S. ex rel. Ramseyer v. Century Healthcare Corp., 90 F.3d 1514, 1523 (10th Cir. 1996).
The focus is whether the internal complaint “alleges fraud on the government.” U.S. ex rel.
George v. Boston Scientific Corp., 864 F. Supp. 2d 597, 606 (S.D. Tex. 2012)(quoting McKenzie,
219 F.3d at 516). “The employee's actions must be aimed at matters demonstrating a ‘distinct
possibility’ of False Claims Act litigation.” U.S. ex rel. George, 864 F. Supp. 2d at 605 (citing
United States ex rel. Sanchez v. Lymphatx, Inc., 596 F.3d 1300, 1303–04 (11th Cir. 2010) (per
curiam)).
Ray’s internal grievances alleged that the humidity levels were not in compliance with
NP 474, but his actions did not demonstrate a “distinct possibility of litigation.” Nor did his

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internal grievances point to an instance where Amfuel sold the government a fuel cell that was
defective as a result of the humidity in the plant. In his deposition, Ray could only point to one
occasion where he thought a false claim had been submitted to the government, and it was not
due to humidity but due to the number of repairs completed on a particular fuel cell.
Likewise, no reasonable jury could find that Ray was engaging in a protected activity by
taking documents from Amfuel and emailing documents to himself. Ray indicates that he took
the documents because he “wanted to have a showing of the type of work that [he] was doing,
the quality of work, to show prospective employers.”

(ECF No. 92, Ex. D at 42). When

confronted by Bauer about the email he attempted to send with a large volume of attached
documents, Ray claimed that the documents were personal in nature and he wanted to work on
the documents from home. Ray did not take the documents in furtherance of an FCA action, nor
was his conduct aimed at matters calculated to lead to a viable FCA action.
Because Ray cannot show that he engaged in a protected activity, he has failed to satisfy
an essential element of an FCA whistleblower retaliation claim.
2. Notice
Even if Ray was engaging in a protected activity, he has not shown that Amfuel had
knowledge of the protected activity. “A plaintiff must show the employer had actual or
constructive knowledge of the protected activity in order to establish a prima facie case of
retaliation.” Schuhardt, 390 F.3d at 568. “Put simply, an employee has the burden of presenting
enough evidence to demonstrate that the defendant was on notice that ‘plaintiff was either taking
action in furtherance of a private qui tam action or assisting in an FCA action brought by the
government.’” Id. (quoting U.S. ex rel. Ramseyer v. Century Healthcare Corp., 90 F.3d 1514,
1522 (10th Cir. 1996)).

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Ray has not satisfied his burden of showing that Amfuel had knowledge of a protected
activity. As a process engineer, Ray was supposed to work to improve the manufacturing
process. Amfuel was aware of humidity issues prior to Ray’s employment. Ray completed
process improvements indicating that humidity was not in compliance with NP 474 and was
hindering the proper bonding of cements, which resulted in rework and excessive scrap. “An
employer is entitled to treat a suggestion for improvement as what it purports to be rather than as
a precursor to litigation.” U.S. ex rel. Parks v. Alpharma, Inc., 493 F. App'x 380, 390 (4th Cir.
2012) (quoting Luckey v. Baxter Healthcare Corp., 183 F.3d 730, 733 (7th Cir.1999)). Ray has
acknowledged that he was trying to help the company and did not even consider becoming a
whistleblower until after his termination. He claims that he referred to the humidity issues at
Amfuel as being “criminal in nature,” but he cannot remember exactly what he said or to whom
he said it. This vague, unsubstantiated claim is not sufficient to put Amfuel on notice that Ray
was contemplating or assisting in an FCA action. The record does not support a finding that
Amfuel had actual or constructive knowledge that Ray was contemplating or acting in
furtherance of an FCA action.

Again, “[m]erely grumbling to the employer about job

dissatisfaction or regulatory violations does not satisfy the requirement―just as it does not
constitute a protected activity in the first place.” Yesudian, 153 F.3d at 743.
Similarly, the documents that Ray took from Amfuel did not give Amfuel notice that Ray
was acting in furtherance of an FCA action. When Bauer and the MIS Manager questioned Ray
about why he tried to email himself a large volume of documents, Ray said that the documents
were personal in nature and that he wanted to work from home. Ray told his supervisor, Moss,
that he “just wanted copies of his work.” (ECF No. 92, Ex. D at 42). No reasonable jury could

12

find that Amfuel knew Ray was taking action in furtherance of a private qui tam action or
assisting in an FCA action brought by the government.
3. Retaliation Motivated Solely by Plaintiff’s Protected Activity
Under the third and fourth elements of an FCA retaliation claim, the plaintiff must
establish that the employer retaliated against him and that the retaliation was motivated solely by
the plaintiff’s protected activity.

Schuhardt, 390 F.3d at 566.

Ray contends that adverse

employment actions were taken against him after he conducted his humidity studies, and that he
was ultimately terminated for conducting the studies and taking documents related to humidity
from Amfuel. He asserts that any other reason Amfuel gives for his termination is subterfuge.
Amfuel maintains that Ray was terminated for violating company policies on confidentiality and
data security.
Even if Ray had engaged in a protected activity by conducting the humidity studies, he
has not produced sufficient evidence to support a finding that Amfuel retaliated against him for
the studies. He alleges that he suffered adverse employment actions when he was reassigned to a
different work area of the plant and when Mow disagreed with his work instruction on the
autoclave area. However, Ray admits that Mow never said anything to him about the humidity
studies and he only speculates that Mow was even aware of them. No one from management
ever told him to stop discussing humidity issues or conducting humidity studies. Furthermore,
Ray has cited no authority to support his contention that a mere reassignment constitutes an
adverse employment action. He has admitted that there were no other changes in his terms of
employment or pay. Ray has not established that Mow harassed or threatened him, and simply
disagreeing with his work instruction on one occasion is insufficient to show retaliation.

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It is undisputed that Ray took over 2,000 pages of documents from Amfuel in violation of
company confidentiality and communications policies. These documents included his study on
the humidity in the plant as well as documents containing proprietary and ITAR information.
However, Amfuel did not terminate Ray upon his first violation of the company policies. Rather
he was counseled by Bauer and received a written reprimand which provided that failure to
adhere to company policies in the future would result in further disciplinary action, up to and
including termination. Nevertheless, in the following weeks, Ray refused to sign a new nondisclosure agreement, requested work-related documents from the maintenance director, and
allegedly carried documents in boxes to his car. Bauer also discovered that Ray had been
emailing himself proprietary and ITAR information over the last several months. It was only
after these actions that Ray was terminated from Amfuel. If Amfuel was looking for a reason to
fire Ray after he voiced concerns about the humidity in the plant, it would have done so at the
first opportunity. Accordingly, there is no evidence that Ray’s termination was solely motivated
by his humidity studies or that there is a causal link between the two.
Ray has failed to establish that he was terminated in retaliation for conducting his
humidity studies and taking the humidity study documents from Amfuel. Therefore, even
finding arguendo that Ray had engaged in a protected activity and that Amfuel had notice of the
protected activity, the Court finds that Ray has not met the requirements necessary to satisfy the
third and fourth elements of an FCA retaliation claim.
B. Breach of Employment Contract
Ray claims that he was wrongfully terminated in violation of his contract with Amfuel.
He further alleges that he was wrongfully discharged in violation of public policy. Amfuel
disputes that the parties ever entered into an employment agreement and contends that even if

14

they did, Ray was terminated for cause pursuant to the agreement. Amfuel maintains that Ray
cannot show that he was terminated in violation of any public policy.
“In Arkansas, the general rule is that an employer or employee may terminate the
employment relationship at will.” Hice v. City of Fort Smith, 75 Ark. App. 410, 413, 58 S.W.3d
870, 872 (2001). There are two main exceptions to this rule: (1) where an employee relies upon
a personnel manual that contains an express provision against termination except for cause; and
(2) where the employment agreement contains a provision that the employee will not be
discharged except for cause, even if the agreement has an unspecified term. Id. An at will
employee can be terminated for any reason, no reason, or even a morally wrong reason. Id.
However, “an at will employee has a cause of action for wrongful discharge if he or she is fired
in violation of a well-established public policy of the state.” Sterling Drug, Inc. v. Oxford, 294
Ark. 239, 249, 743 S.W.2d 380, 385 (1988). “A public-policy-discharge action is predicated on
the breach of an implied provision that an employer will not discharge an employee for an act
done in the public interest.” Id. at 380.
Ray has failed to show that the parties had an employment agreement that only permitted
Ray to be terminated for cause. Initially, Ray thought he had a copy of an executed employment
contract in his possession but he has been unable to locate it. 2 Without a contract, Ray cannot
show that he could only be terminated for cause. Therefore, the Court finds that Amfuel could
terminate the employment relationship at will.

2

The unexecuted draft of an employment agreement that Ray claims was eventually agreed upon by the parties
provides that Amfuel may terminate the contract for cause at any time. Additionally, it stipulates that the employee
shall not disclose any proprietary information and will enter into Amfuel’s confidentiality agreement. Therefore,
even if Ray had produced an executed version of this employment contract, it is likely that Amfuel would have been
able to show that Ray was terminated for cause after he breached the employment contract and violated Amfuel’s
policies.

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Ray has not established that he was terminated in violation of a well-established public
policy of Arkansas. At the time Ray was terminated, he had not become a whistleblower. He
told Amfuel that the humidity throughout the plant was not in compliance with NP 474, but he
failed to show that this was in violation of a government regulation. Moreover, Ray has admitted
that “he was just trying to help the company.” (ECF No. 92, Ex. D at 30). It is undisputed that
Ray took documents from Amfuel to have copies of his own work to show future employers. He
did not take the documents in an effort to protect the public interest. Therefore, no reasonable
jury could find that Ray was terminated in violation of a public policy of the state of Arkansas.
CONCLUSION
For the reasons explained above, Amfuel’s Motion for Summary Judgment (ECF No. 90)
is GRANTED as to Ray’s claims for FCA retaliation and breach of employment contract. The
Court leaves for later determination Amfuel’s counterclaim for injunctive relief. 3
IT IS SO ORDERED, this 2nd day of March, 2015.
/s/ Susan O. Hickey
Susan O. Hickey
United States District Judge

3

The Zodiac Group was dismissed as a party on March 4, 2013 when the Court granted Amfuel’s Motion to
Dismiss as to the False Claims Act qui tam claim. (ECF No. 52).

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