Chalifoux v. BAE Systems, Inc. et al
///MEMORANDUM AND ORDER RE: 28 Motion to Dismiss; 30 Motion to Dismiss. I grant defendants' motions to dismiss Count I (Doc. Nos. 28 and 30) and deny ATR's motion as it pertains to Counts II, III, and IV. So Ordered by Judge Paul J. Barbadoro.(js)
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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
Case No. 20-cv-401-PB
Opinion No. 2021 DNH 004
BAE Systems, Inc. and ATR
MEMORANDUM AND ORDER
Joseph Chalifoux filed suit against BAE Systems, Inc.
(BAE), a defense contractor, and ATR International, Inc. (ATR),
a staffing agency.
Chalifoux seeks relief for violations of the
anti-retaliation provision of the False Claims Act (FCA), 31
U.S.C. § 3730 (Count I), the anti-retaliation provision of the
Fair Labor Standards Act (FLSA), 29 U.S.C. § 215 (Count II), the
New Hampshire Whistleblower Protection Act, N.H. Rev. Stat. Ann.
275-E:1 et seq. (Count III), and the New Hampshire common law
right to protection from wrongful termination (Count IV).
has moved to dismiss Count I, arguing that Chalifoux did not
engage in conduct that is protected by the FCA’s antiretaliation provision.
ATR joins in BAE’s motion and also seeks
to dismiss the remaining counts against it, arguing that
Chalifoux’s complaint does not sufficiently allege that ATR
retaliated against him or was involved in his termination.
the following reasons, I grant defendants’ motions to dismiss
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Count I and deny ATR’s motion to dismiss the complaint’s three
Chalifoux was jointly employed by BAE and ATR from March 1,
2018 until May 22, 2018.
Am. Compl. ¶¶ 9, 13.
During that time
he worked as a Technical Recruiter, enlisting workers for open
positions at BAE.
Am. Compl. ¶ 17.
BAE managed his day-to-day
duties and reported his hours to ATR who then paid him.
Compl. ¶¶ 14, 15, 19.
BAE initially allowed Chalifoux to work
from home every other Friday.
Am. Compl. ¶ 24.
One of Chalifoux’s assignments was to help fill a “Tech 1”
position for Sharon Stehlik, the hiring manager for that
Am. Compl. ¶¶ 32-33.
Chalifoux sent Stehlik several
qualified applicants, but she only reviewed the materials for
one, known by the initials J.B.
Am. Compl. ¶¶ 34-36.
noted that J.B. was far less qualified than the other
Am. Compl. ¶ 38.
J.B., a member of the military
Reserves, was a security guard with no college degree and very
little relevant experience for the Tech 1 position.
Other applicants had college and master’s degrees and
years of relevant experience.
Am. Compl. ¶ 42.
hired J.B. for the role.
Am. Compl. ¶ 41.
Nevertheless, Stehlik eventually
Am. Compl. ¶ 43.
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Chalifoux was concerned that Stehlik’s decision to hire
J.B. without considering other, more qualified applicants
violated federal statutes, regulations, and Executive Orders
that require government contractors to both take affirmative
measures to promote the hiring of qualified veterans and
consider all qualified applicants for vacant positions.
Compl. ¶¶ 44, 47.
When Chalifoux presented his concern to his
superior at BAE, Alina Ernest, she initially agreed that Stehlik
had acted improperly.
Am. Compl. ¶ 50.
The next day, however,
Ernest sent Chalifoux an email questioning whether he had in
fact worked all of the hours listed on his timecard for that
Am. Compl. ¶ 52.
Although Chalifoux later attempted to
explain why his timecard was accurate, Ernest rejected his
explanation, deducted two hours from his timecard and revoked
his work from home privileges.
Am. Compl. ¶ 59.
Chalifoux believed Ernest reduced his pay and revoked his
work-from-home privileges in retaliation for complaining about
Stehlik’s decision to hire J.B. without considering other
Am. Compl. ¶ 60.
In an attempt to pursue
his concerns, Chalifoux spoke with Jennifer Boyd, a Human
Resources Business Partner at BAE, on May 4 and May 8.
Compl. ¶¶ 60-61.
Chalifoux also reached out to ATR, emailing
Michael Gonzalez on May 9 about his reduced pay and asking ATR
for protection from potential retaliation.
Am. Compl. ¶ 63.
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Shirlyn Santos, a Human Resources Specialist at ATR, contacted
Chalifoux on May 10, 2018, asking for information about his pay
reduction and his retaliation concerns.
Am. Compl. ¶ 65.
May 14, Annie Eller, with ATR’s Human Resources Production
Branch, also informed Chalifoux that she was in contact with
Boyd at BAE about Chalifoux’s concerns.
Am. Compl. ¶ 69.
That same day, Clairise Tillman, a Human Resources Analyst
at BAE, requested that Chalifoux enter disposition codes for the
Tech 1 position to explain why each candidate for the position
had or had not been selected.
Am. Compl. ¶¶ 70, 72.
believed that, by entering disposition codes for the rejected
candidates’ applications, he was implying that they had been
considered when he knew they had not.
Am. Compl. ¶¶ 71-72.
Chalifoux forwarded Tillman’s request to Ernest, repeating his
concerns about the application process for the Tech 1 position.
Am. Compl. ¶ 73.
He informed her that he had originally entered
“Not Selected” because none of the available codes were
Am. Compl. ¶ 73.
Ernest ordered Chalifoux that same
day to select another code and stated that he could use the code
“met basic qualifications, not most qualified” for the rejected
Am. Compl. ¶ 74.
Chalifoux believed this code to
be inaccurate because the other candidates were more qualified
Am. Compl. ¶ 74.
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On May 21, Chalifoux again emailed Eller at ATR, to update
her on the status of his employment at BAE and to determine how
ATR would protect him from further retaliation.
Am. Compl. ¶
The next day, Chalifoux met with Boyd in her office.
Compl. ¶ 81.
Eller participated by telephone.
Am. Compl. ¶ 81.
During the meeting, Boyd informed Chalifoux that Stehlik’s
hiring of J.B. had been investigated, Stehlik was found to have
acted appropriately, and J.B. was the most qualified candidate
for the position.
Am. Compl. ¶ 82.
She also noted that
Chalifoux had started work at 6:00AM one day and informed him
that that was too early to start work without her permission.
Am. Compl. ¶ 82.
She then terminated his employment.
Compl. ¶ 82.
ATR continued to place employees at BAE after Chalifoux was
It never investigated Chalifoux’s retaliation
complaint and it never demanded that BAE take corrective action.
It also refused to assign Chalifoux to positions with other
Am. Compl. ¶¶ 84-85.
STANDARD OF REVIEW
To withstand a motion to dismiss under Rule 12(b)(6), a
plaintiff’s complaint must include factual allegations
sufficient to “state a claim to relief that is plausible on its
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
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this standard, the plaintiff must plead “factual content that
allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.”
Twombly, 550 U.S. at 556).
Plausibility demands “more than a
sheer possibility that [the] defendant has acted unlawfully,” or
“facts that are merely consistent with [the] defendant’s
Id. (quoting Twombly, 550 U.S. at 557) (internal
quotation marks omitted).
Although the complaint need not set
forth detailed factual allegations, it must provide “more than
an unadorned, the-defendant-unlawfully-harmed-me accusation.”
Id. (quoting Twombly, 550 U.S. at 555).
In evaluating the pleadings, I excise any conclusory
statements from the complaint and credit as true all nonconclusory factual allegations and reasonable inferences drawn
from those allegations.
Ocasio-Hernandez v. Fortuno-Burset, 640
F.3d 1, 12 (1st Cir. 2011).
I “may also consider ‘facts subject
to judicial notice, implications from documents incorporated
into the complaint, and concessions in the complainant’s
response to the motion to dismiss.’”
Breiding v. Eversource
Energy, 939 F.3d 47, 49 (1st Cir. 2019) (quoting Artuert-Velez
v. R.J. Reynolds Tobacco Co., 429 F.3d 10, 13 n.2 (1st Cir.
Case 1:20-cv-00401-PB Document 45 Filed 01/06/21 Page 7 of 13
BAE contends that Chalifoux’s FCA retaliation claim is
defective because he fails to allege that he engaged in conduct
protected by the FCA.
ATR joins in BAE’s challenge and also
argues that Chalifoux’s remaining claims against it are doomed
because he has not sufficiently alleged that ATR retaliated
against him or was otherwise responsible for his termination.
address each argument in turn.
False Claims Act Claim
The First Circuit has explained that “to prevail on a False
Claims Act retaliation claim, a plaintiff must show that 1) the
employee's conduct was protected under the FCA; 2) the employer
knew that the employee was engaged in such conduct; and 3) the
employer discharged or discriminated against the employee
because of his or her protected conduct.”
United States ex rel.
Karvelas v. Melrose-Wakefield Hosp., 360 F.3d 220, 235 (1st Cir.
“In order to satisfy the first element of a cause of
action under 31 U.S.C. § 3730(h), a plaintiff must demonstrate
that he or she engaged in activity protected under the FCA.
This 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.
an employee's conduct is protected where it involves ‘acts done
. . . in furtherance of’ an FCA action.”
Id. at 236 (quoting 31
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U.S.C. § 3730(h)).
The First Circuit has defined conduct “in
furtherance” of an action under the FCA “as conduct that
reasonably could lead to a viable FCA action.”
words, investigations, inquiries, testimonies or other
activities that concern the employer’s knowing submission of
false or fraudulent claims for payment to the government.”
Defendants target the first element of Chalifoux’s FCA
They argue that Chalifoux’s complaints about
Stehlik’s decision to hire J.B. without considering other
applicants for the Tech 1 position and his refusal to enter
false disposition codes for the unsuccessful candidates do not
qualify as protected conduct under the FCA because they are not
tied to a claim for payment by BAE.
To support their position,
defendants invoke a body of First Circuit law which recognizes
that a complaint about a contractor’s failure to abide by
contract terms or comply with federal regulations does not
qualify as protected conduct unless the complaint is linked to
false or fraudulent claims for payment.
Guilfoile v. Shields,
913 F.3d 178, 187 (1st Cir. 2019); United States ex rel. Booker
Defendants also allege that Chalifoux failed to satisfy the
other elements of an FCA retaliation claim. I need not consider
those argument because I conclude that Chalifoux has failed to
allege that he engaged in conduct protected by the FCA.
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v. Pfizer, Inc., 847 F.3d 52, 60 (1st Cir. 2017); Karvelas, 360
F.3d at 237.
Chalifoux responds by claiming that his resistance to BAE’s
regulatory violations is protected by the FCA because it
reasonably could have led to the exposure of a larger plot by
BAE to submit false claims.
Chalifoux’s argument proceeds in
First, he asserts that BAE’s contracts with the
government include “equal opportunity clauses” that require BAE
to consider every qualified candidate before it fills a vacant
Next, he contends that BAE fraudulently induced the
government to agree to the contracts by falsely representing
that it intended to fulfill its equal opportunity obligations.
He then claims that BAE’s contracts are themselves false claims
under the FCA.
Finally, he argues that the contracts, BAE’s
fraudulent representations that it had complied with its equal
opportunity obligations, and its creation of false records to
conceal its misconduct can all therefore serve as grounds for
viable FCA claims.
I reject Chalifoux’s argument because it is based on the
mistaken premise that BAE’s contracts with the government
constitute claims under the FCA.
“The False Claims Act imposes
civil liability on ‘any person who . . . knowingly presents, or
causes to be presented, a false or fraudulent claim for payment
Universal Health Serv., Inc. v. United States ex
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rel. Escobar, 136 S.Ct. 1989, 1999 (2016) (quoting 31 U.S.C. §
Entering into a contract with the federal
government is not the same as presenting a claim for payment to
Although promissory fraud can be a viable theory of common
law fraud, it must be grounded in a claim for payment when it
serves as the basis for an FCA claim.
See Karvelas, 360 F.3d at
225 (“Not all fraudulent conduct gives rise to liability under
Indeed, as the First Circuit has reiterated time
and again, “[T]he statute attaches liability, not to the
underlying fraudulent activity or to the government’s wrongful
payment, but to the ‘claim for payment.’”
Id. (quoting United
States v. Rivera, 55 F.3d 703, 709 (1st Cir. 1995)).
defendant violates the FCA only when he or she has presented to
the government a false or fraudulent claim, defined as ‘any
request or demand . . . for money or property’ where the
government provides or will reimburse any part of the money or
Chalifoux finds support for his interpretation of the statute
in a decision from the District of Maine, Manfield v. Alutiiq
Int’l Sols., Inc., 851 F. Supp. 2d 196, 203 (D. Me. 2012) (“The
contract itself constitutes a claim for payment, insofar as it
recites the obligations of each party to one another”).
However, this decision was handed down before the Supreme
Court’s decision in Escobar, in which the Court clarified the
meaning of “false or fraudulent claims” under the FCA, and
without the benefit of briefing by the parties on the statutory
language at issue.
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U.S.C. § 3729(c)).
Karvelas, 360 F.3d at 225 (quoting 31
Because Chalifoux has not tied his
promissory fraud argument to a demand by BAE for payment, he has
not sufficiently alleged that his resistance to BAE’s regulatory
violations and contractual breaches reasonably could have led to
an FCA action against BAE.
Accordingly, I grant defendants’
motions to dismiss Chalifoux’s FCA retaliation claim.3
Although Chalifoux might be able to link his promissory fraud
theory to a demand by BAE for payment, he would have to allege
and ultimately prove that the fraud he cites is material to the
government’s payment decision. See 31 U.S.C. § 3729(b)(4)
(defining “material” as “having a natural tendency to influence,
or be capable of influencing, the payment or receipt of money or
property; see also United States ex rel. Hendow v. University of
Phoenix, 461 F.3d 1166, 1174 (9th Cir. 2006) (“the promissory
fraud theory requires that the underlying fraud be material to
the government’s decision to payout moneys to the claimant”);
United States ex rel v. Stephens Institute, 909 F.3d 1012, 101819 (9th Cir. 2018) (applying Hendow post Escobar); United States
v. Strock, 982 F.3d 51 (2d Cir. 2020) (rejecting argument that
“materiality must be assessed primarily with regard to
government’s decision to award contracts” and holding instead
that “the government’s ‘payment decision’ under Escobar
encompasses both its decision to award a contract and its
ultimate decision to pay under that contract”); but cf. Scollick
ex rel. United States v. Narula, No. 14-cv-1339, 2020 WL 6544734
at *8 (D.D.C. Nov. 6, 2020) (“Escobar’s materiality standard
applies only to False Claims Act suits alleging falsity under
the implied false certification theory of falsity”). As the
Supreme Court has noted, this standard is “demanding.” Escobar,
136 S. Ct. at 2003. “A misrepresentation cannot be deemed
material merely because the government designates compliance
with a particular statutory, regulatory, or contractual
requirement as a condition of payment. Nor is it sufficient for
a finding of materiality that the government would have the
option to decline to pay if it knew of the defendant’s
noncompliance.” Id. Because Chalifoux has not attempted to
connect his complaints about BAE’s regulatory violations to the
submission of fraudulent claims, and because this issue as not
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Remaining Claims Against ATR
ATR also moves to dismiss Chalifoux’s other three claims
a retaliation claim under the FLSA; a claim under
New Hampshire Whistle Blower Protection Act; and a wrongful
termination claim under New Hampshire common law.
that these claims fail even if Chalifoux faced unlawful
retaliation from BAE because Chalifoux “does not allege that ATR
terminated, retaliated, or took actionable adverse employment
action against [him].”
Doc. No. 30 at 4.
Chalifoux alleges that ATR refused to place him with other
companies in retaliation for his complaints about BAE’s alleged
An employer’s complete refusal to assign work to an
employee plainly can qualify as a constructive discharge.
constructive discharge, in turn, can support FLSA retaliation,
Bartolon-Perez v. Island Granite & Stone, Inc., 108 F.Supp.3d
1335, 1340 (S.D. Fla. 2015), and Whistleblower Protection Act
It can also serve as the foundation for a wrongful
Karch v. BayBank FSB, 147 N.H. 525, 536
Accordingly, I am not persuaded by ATR’s motion to
dismiss these claims.4
been adequately briefed by the parties, I need not speculate
about whether he could meet this demanding standard.
4 Chalifoux also alleges that ATR can be held liable for failing
to take affirmative steps to protect Chalifoux from retaliation
by BAE. See e.g. Burton v. Freescale Semiconductor Inc., 798
F.3d 222, 229 (5th Cir. 2015). Because I deny ATR’s motion to
Case 1:20-cv-00401-PB Document 45 Filed 01/06/21 Page 13 of 13
For the foregoing reasons, I grant defendants’ motions to
dismiss Count I (Doc. Nos. 28 and 30) and deny ATR’s motion as
it pertains to Counts II, III, and IV.
/s/ Paul Barbadoro
United States District Judge
January 6, 2021
Allan Keith Townsend, Esq.
Courtney H. G. Herz, Esq.
Michael D. Ramsdell, Esq.
Eulalio J. Garcia, Esq.
Tara E. Lynch, Esq.
dismiss for other reasons, I need not address his argument at
this stage in the proceedings.
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