Herrera-Castro v. Trabajamos Community Head Start, Inc.

Filing 46

OPINION AND ORDER re: 17 MOTION for Summary Judgment . filed by Trabajamos Community Head Start, Inc.. Thus, in sum, with the one exception noted below, Trabajamos's motion for summary judgment is hereby denied. The parties are directed to jointly call Chambers by no later than February 24, 2017 to schedule a trial in this case. The Clerk of Court is directed to close docket entry 17. (Signed by Judge Jed S. Rakoff on 2/20/2017) (kgo)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-------------------------------------x
CARMEN HERRERA,
15 Civ.

9286

(JSR)

Plaintiff,
OPINION
AND ORDER

-vTRABAJAMOS COMMUNITY HEAD
INC.,

l

Defendant.
-------------------------------------x
JED S. RAKOFF, U.S.D.J.

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Head Start, Inc.

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Defendant Trabajamos Community
("Trabajamos")

received federal funds under the American

Recovery and Reinvestment Act of 2009

("ARRA"), the economic

stimulus package enacted early in President Barack Obama's first
term of office. Naomi Herrera-Castro ("Castro"),

the former

Executive Director of Trabajamos, claimed that she was fired for
reporting a fraudulent scheme involving stimulus funds,

and

brought a one-claim "whistleblower" complaint against the
defendant.

Following discovery, Castro died, but her suit was

taken over by her next-of-kin, Carmen Herrera. Trabajamos had
meanwhile moved for summary judgment dismissing the suit. Having
carefully considered the parties' arguments and submissions, the
Court hereby denies the defendant's motion, save for one minor
aspect of the motion that is granted.

1

"Summary judgment is proper only 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.'" In re World
Trade Ctr. Lower Manhattan Disaster Site Litig., 846 F.3d 58
Cir. 2017)

(quoting Fed. R. Civ. P.

(2d

56 (a)). Courts "view the

evidence in the light most favorable to the party opposing
summary judgment, draw all reasonable inferences in favor of
that party, and eschew credibility assessments." Smith v.
Barnesandnoble.com, LLC,

839 F.3d 163, 166 (2d Cir. 2016)

(alterations omitted).
The pertinent facts,

undisputed except where noted, are as

follows. Trabajamos is a not-for-profit corporation that
provides Head Start programming to low-income children in the
Bronx. Defendant Trabajamos Community Head Start, Inc.'s Local
Civil Rule 56.l Statement of Undisputed Facts
No. 18,

~

("Def. 56.l"), ECF

l; Plaintiff's Counter-Statement of Material Facts

("Pl. 56.1"), ECF No. 21,

~

1. Trabajamos receives federal funds

administered by the New York City Administration for Children's
Services

("ACS"), a Delegate Agency under the federal Head Start

Program Performance Standards. Amended Complaint, ECF No. 33,
~

9; Defendant Trabajamos Community Head Start, Inc.'s Answer to

Plaintiff's Amended Complaint, ECF No. 34,

~

9. In September

2012, Trabajamos's Board of Directors consisted of Sandra
2

Martinez

(Chairperson), Donald Antonetty, Stacey Andino (now

Stacey Santiago), Paul Block, Vicky Gholson, Nilda Lont, and
Monique Van Putten. Def. 56.1

4, 17; Pl. 56.1

~~

December 2013, the Board consisted of Martinez
Block, Lont, and Gholson. Def. 56.1

(Chairperson),

5; Pl. 56.1

~

4, 17. In

~~

5.

~

Antonetty, though no longer affiliated with Trabajamos, was
a central figure in the organization for many years, having
served on the Board for around twenty years, and as Chairman for
around ten.

Pl. 56.1.

Head Start,

Inc.'s Reply to Plaintiff's Counterstatement of

Material Facts

~~

119-20; Defendant Trabajamos Community

("Reply 56.1"), ECF No. 29,

~~

119-20. He

resigned as Chairman at some point in 2012, and resigned from
the Board entirely on or about October 3, 2013. Pl. 56.1
35; Reply 56.1

~~

~~

133-

133-35. The circumstances of his departure are

somewhat disputed, but there is evidence that ACS,
Antonetty also worked,

for which

forced him to resign because of a

conflict of interest. Pl. 56.1

~~

132-35; Reply 56.1

~~

132-35.

However, Antonetty continued to play a role in Trabajamos's
affairs following his resignation,

including advising Board

member Nilda Lont on personnel matters
involvement is disputed).

Pl. 56.1

~

(though the extent of his

136; Reply 56.1

Antonetty also allows Lont, a longtime friend,

3

~

136.

to live rent-free

in a residence owned by Antonetty.
~

Pl. 56.1

~

128; Reply 56.1

128.
Castro began working for Trabajarnos in January 1986 as a

Records Clerk. Def. 56.1

~

9; Pl. 56.1

~

9. By March 2012, she

had risen to the position of Acting Director of Trabajamos, and
in September of that year, the Board appointed her Program
(Executive)

Director. Def. 56.l

~~

12, 14; Pl.

56.1

~~

12, 14.

Castro, as Executive Director, was nominally responsible for
managing the day-to-day operations of Trabajamos, Def. 56.1
Pl. 56.1

~

~

7;

7, but the parties dispute the true distribution of

authority within the organization. Trabajamos maintains that
Castro reported to the entire Board, which jointly supervised
Castro and oversaw the organization; according to Castro, she
reported to Antonetty, who exercised complete and unilateral
control over Trabajarnos. Def. 56.1
121-129; Reply 56.1

~~

~~

3, 13; Pl. 56.1

~~

3, 13,

121-129.

At some point between May and September 2013, Santiago,
Trabajamos's Fiscal Officer and Castro's niece, brought to
Castro's attention certain invoices and payments Santiago
suspected were fraudulent.
99, 137; Reply 56.1

~

Def. 56.1

~~

17,

99; Pl. 56.1

~~

17,

137. The precise details of the supposed

fraud are unclear, but there is evidence that Antonetty had
submitted invoices totaling around $9,000 under the names Victor
4

Martinez and Luis Castillo.
104, 138; Reply 56.1

~

1

Def. 56.1

~~

97-104; Pl. 56.1

~~

97-

138. Castro had approved these invoices

for payment when they were submitted, and had known that some of
them sought payment for work that had not been performed by the
person named in the invoice. Def. 56.1
~~

~~

100, 102-04; Pl. 56.1

100, 102-04.
According to Castro, at some point in August or September

2013,

she confronted Antonetty about a check made out to Luis

Castillo, and he became argumentative and repeatedly told her
that he "need[ed] that check." Pl. 56.1

~~

140-41. At that time,

Antonetty was still on the Board of Directors. Santiago
testified that she also questioned Antonetty about the Castillo
check, and Antonetty told her that he needed the check and that
he was not otherwise able to pay himself for the work he did.
Pl. 56.1

~

Reply 56.1

139. Antonetty denies these conversations took place.
~~

139-41. Castro took no further action on the

fraudulent invoices at that time.
Antonetty resigned from the Board on or about October 3,
2013. Pl. 56.1

~

135; Reply 56.l

~

135. Around the same time,

the Board began to report deficiencies in Castro's performance.

It appears that Victor Martinez is the teenage son of Board
Chairperson Sandra Martinez, and that Luis Castillo is a friend
of Antonetty's. See Santiago Deposition, Ex. C to Declaration in
Opposition ("Clark Deel."), ECF No. 22, at 84-85.
1

5

For example, according to the minutes of an October 3, 2013
Board meeting, Castro's reports were mislabeled and incorrect,
and there were security concerns at certain Trabajamos
facilities.

Def. 56.1

~~

36-41. Castro was present at this

meeting, but denies that the concerns reflected in the minutes
were in fact discussed.

Pl. 56.1

~~

36-41.

At some point after the October 3 Board meeting, Antonetty,
Lont, and Castro met to discuss Castro's employment with
Trabajamos. The circumstances of this meeting are disputed.
Castro testified that Antonetty and Lont came to her off ice
after working hours and demanded that she step down as Executive
Director; she refused, but eventually agreed to a leave of
absence. Def. 56.1

~~

44-45; Pl. 56.l

~~

44-45,

147, 149.

According to Castro, Antonetty was motivated by his belief that
she had disclosed his conflict of interest to ACS, which had
forced him to resign from the Trabajamos Board. Pl. 56.l

~

148.

For his part, Antonetty testified that Castro arranged the
meeting at her house in order to confess her own misconduct

(she

allegedly had rented a car for personal use with Trabajamos
funds)

and requested a leave of absence.

Reply 56.l

~~

Def. 56.1

~~

46-47;

147-49.

While all of this remains the subject of competing
contentions, it is at least undisputed that after that meeting,
6

Castro sent a letter to the Board requesting a leave of absence,
which was granted within a few days.
56.l

~~

leave,

52,

Def.

56.1

~~

52,

58; Pl.

58. According to Trabajamos, while Castro was on

Board member Lont discovered other indications of

possible misconduct by Castro,

including excessive petty cash

receipts, payments to Castro's boyfriend Enrique Rivera for
maintenance work,
Castro, however,

and disrespectful conduct toward staff.
denies all misconduct and performance issues,

claiming in particular that Antonetty had approved the decision
to hire Rivera.

Def.

56.1

~~

60-61;

Pl.

56.1

~~

60-61. On

November 12, 2013, Martinez sent Castro a letter stating that
the Board had extended her leave for an additional two weeks.
Def.

56.1

~

62;

Pl.

56.1

~

62. On November 18, 2013, Castro

requested a meeting with the Board, and Martinez responded that
the Board would promptly hold one.
~~

Def.

56.1

~~

63-64;

Pl.

56.1

63-64.
According to Castro, at some point between November 18 and

December 5,

2013, Castro had a telephone conversation with Block

(another member of the Board)

in which Castro told Block that

Castro had evidence of fraud at Trabajamos.

Pl.

56.1

~

142.

There is no other evidence of this call, and no evidence that
Castro gave Block any details of the supposed fraud.

7

On December 2, 2013, the Board met to discuss Castro's
performance. 2 Def.

~

56.1

69. According to minutes of that

meeting, Trabajamos "reviewed the issues of the Executive
Director's performance" and "came to consensus that a decision
was needed as to Ms. Castro continuing as the Executive Director
and possibly being asked to step down," though no final decision
was made. Def. 56.l

~~

70-71,

73; Ex. 36 to Rotenberg Deel.

Thereafter, on December 5, 2013, the Board (Martinez, Lont,
and Block in attendance)
Santiago. Def.

56.l

~~

held a special meeting with Castro and

77-78; Pl. 56.l

~~

77-78. The

circumstances of this meeting are disputed, but,

in broad

strokes, Castro and Santiago testified that Castro presented the
fraudulent Victor Martinez and Luis Castillo invoices to the
Board, which refused to discuss them, whereas Lont and Block

2

Castro, who was not at the meeting, nonetheless denies that
this Board meeting took place, apparently on no better basis
than that one of the attendees, Block, did not specifically
recall when it occurred. Pl. 56.l ~~ 69-74. But other attendees
did and took formal minutes to boot. See Def. 56.l ~ 69; Ex. 36
to Declaration of Jeffrey D. Rotenberg in Support of Defendant
Trabajamos Community Head Start, Inc.'s Rule 56.l Statement of
Undisputed Facts ("Rotenberg Deel."), ECF No. 20. Moreover, it
requires a highly contrived reading of Block's testimony to see
any basis for Castro to deny that the meeting took place. The
Court will deem such baseless denials as admissions. See
Schoolcraft v. City of New York, 103 F. Supp. 3d 465, 476
(S.D.N.Y. 2015) ("Denials without support or explanation are
treated as admissions.").
8

testified that they remembered no such allegations of fraud.
Def.

56.1 'TI'TI 77-82,

85; Pl. 56.1 'TI'TI 77-82,

85, 144-46; Reply

56.1 'TI 144-46; Santiago Deposition, Ex. C to Clark Deel., at
104-05. The Board voted to fire Castro after she left. Def. 56.1
'TI 84; Pl.

56.1 'TI 84. According to the minutes of the meeting,

Castro was terminated for a number of performance-related
reasons,

such as her failure to seek Board approval before

hiring Santiago (her niece), her failure to seek Board approval
of contracts over $5,000, and her failure to provide monthly
fiscal reports.

Def. 56.1 'TI 92; Pl. 56.1 'TI 92; Ex. 5 to

Rotenberg Deel. The following day, the Board sent Castro a
termination letter signed by Martinez, Lont, and Block. Def.
56.1 'TI'TI 93-95; Pl.

56.1 'TI'TI 93-95.

In or around September 2014, Castro submitted a charge of
being the subject of retaliation for whistleblowing to the
Office of the Inspector General for the U.S.

Department of

Health and Human Services, which resolved to take no action on
September 2, 2015. Def. 56.1 'TI'TI 112, 115; Pl. 56.1 'TI'TI 112, 115.
On November 25, 2015, Castro filed the complaint in the instant
action, claiming that Trabajamos had fired her for reporting
misconduct.
direction,

Def. 56.1 'TI 116; Pl. 56.1 'TI 116. At the Court's
on August 1, 2016, Castro filed an amended complaint

that conformed to certain deposition testimony that had departed
9

from her original complaint in material respects. See Amended
Complaint, ECF No.

33. Castro died on September 11, 2016, after

the instant motion was fully brief and argued, and the Court
entered a stay. See Order dated Sept. 12, 2016, ECF No. 36. On
January 30, 2017, the Court substituted Castro's sister, Carmen
Herrera, as plaintiff,

lifted the stay, and turned to deciding

the instant motion. See Order dated Jan.

30, 2017, ECF No.

45.

Few courts have had the occasion to interpret the
retaliation provision of the American Recovery and Reinvestment
Act of 2009,

Pub. L. No. 111-5,

§

1553, 123 Stat. 115, 297, so

there is little case law directly on point and no binding
judicial authority. However, the ARRA retaliation provision was
not created out of whole cloth, and many of its components have
close

(or even identical)

counterparts in statutes that courts

have encountered more frequently,
Act,

see 18 U.S.C.

Act, see 5 U.S.C.

§
§

such as the Sarbanes-Oxley

1514A, and the Whistleblower Protection
1221. Decisions interpreting these statutes

are persuasive authority on the meaning of ARRA, as, of course,
are the small number of decisions interpreting ARRA.
Two courts have framed the elements of an ARRA retaliation
claim as follows:
disclosure,

(2)

"(1) that

that

[plaintiff] made a protected

[plaintiff] suffered a reprisal, and (3)

that the protected disclosure was a contributing factor in the
10

reprisal." See Wang v. Wash. Metro. Area Transit Auth., No. 14cv-1189

(RC),

July 25, 2016)

F. Supp. 3d

, 2016 WL 4007067, at *32

(D.D.C.

(alterations omitted); see also Hadley v.

Energy Progress, LLC,
Cir. Feb. 7, 2017)

F. Appx

(unpublished)

Duke

2 0 1 7 WL 4 9 6 0 91 , at * 1 ( 4th
(similar). "If a plaintiff

proves the three elements of an ARRA whistleblower claim, the
employer can rebut the claim with clear and convincing evidence
'that the employer would have taken the action constituting the
reprisal in the absence of the disclosure.'" Wang,
4007067, at *32

(quoting ARRA

§

1553 (c) (1)

2016 WL

(B)).

The Court agrees that these elements accurately track the
requirements of the statute, see ARRA § 1553 (a),

(c), and adopts

them with one slight modification. Using the term "reprisal" in
the second and third elements could potentially lead to
confusion, because it assumes that an adverse employment action
was in fact taken in retaliation for a protected disclosure.

If

a whistleblower were fired solely for poor performance, it might
be misleading to characterize the termination as a "reprisal,"
even though a termination would satisfy the requirement that the
employee has been "discharged." See id.
sake of clarity,

§

1553 (a). Thus,

for the

in discussing the second and third elements,

the Court will use the specific adverse employment actions set
forth in ARRA, viz., being "discharged, demoted, or otherwise
11

discriminated against," see id., rather than the term
"reprisal."
With that framework in mind, Trabajamos concedes that
Castro was "discharged, demoted, or otherwise discriminated
against," but raises several arguments under the first and third
elements, and contends that it has rebutted Castro's claim with
clear and convincing evidence.
ARRA protects disclosures of five distinct types of
misconduct relating to "covered funds." See id.

§

1553(a) (1)-

(5). As relevant to this case, an employee makes a protected
disclosure if she reports "information that the employee
reasonably believes is evidence of .

a gross waste of

covered funds" to the Board of Directors or a supervisor. See
id.

§

1553 (a) (2). Trabajamos argues,

first,

that Castro did not

make a protected disclosure because she did not subjectively
believe that the misconduct she reported violated the statute.
But the statute requires no such subjective belief. Rather the
statute requires only that the whistleblower "reasonably
believes" that the information disclosed "is evidence of
gross waste of covered funds." Id. Moreover,

. a

it would thwart

ARRA's purpose - to encourage and protect reports of misconduct
involving covered funds - to require laypeople to form legal

12

conclusions concerning the misconduct they have discovered
before coming within the statute's protection.
Trabajamos's argument to the contrary relies on a flawed
analogy of ARRA to the Sarbanes-Oxley Act, whose whistleblower
provision has been interpreted to require some level of
subjective belief that the employer has broken the law. See
Nielsen v. AECOM Tech. Corp.,

762 F.3d 214, 221

(2d Cir. 2014)

("[R]elief pursuant to§ 1514A turns on the reasonableness of
the employee's belief that the conduct violated one of the
enumerated provisions

"

(emphasis in original)). This

argument fails for at least two reasons.

First, Sarbanes-Oxley

does not require that an employee reasonably believe that the
employer violated Sarbanes-Oxley itself, as Trabajamos's analogy
requires, but rather that she believe that the employer has
violated one of a broad array of other securities and antifraud
provisions. Second, that interpretation of Sarbanes-Oxley is
based on statutory language that has no counterpart in the
relevant portion of ARRA: Sarbanes-Oxley requires that a
whistleblower reasonably believe that the reported misconduct
constitutes a violation of specific,

identified federal laws or

SEC regulations, viz. "section 1341, 1343, 1344, or 1348, any
rule or regulation of the Securities and Exchange Commission, or
any provision of Federal law relating to fraud against
13

shareholders." See 18 U.S.C. § 1514A(a) (1). No comparable
language appears in ARRA's gross waste provision. Accordingly, a
plaintiff bringing an ARRA retaliation claim based on gross
waste need not subjectively believe that the reported misconduct
violated the statute.
Trabajamos next argues that Castro did not subjectively
believe that the fraudulent invoices she reported constituted
~gross

waste." It is clear from the language of the statute that

the whistleblower must subjectively believe that there was gross
waste and that that belief must be reasonable. See Hadley,
WL 496091, at *1

(~This

'reasonable belief'

2017

requires

demonstrating both objective and subjective belief."
(alterations omitted) )

(interpreting ARRA) .

However, it is clear that there is a genuine dispute of
material fact as to whether Castro subjectively believed that
she was reporting gross waste. As evidence that Castro lacked
this belief, Trabajamos points out that Castro approved certain
invoices despite being aware that they were potentially
fraudulent,

and that she waited for several months before

reporting these invoices to the Board. Def. 56.1
Pl. 56.1

~~

~~

100, 102-04;

100, 102-04. But viewed most favorably to the

plaintiff, the evidence shows that Castro reported the
fraudulent invoices to Antonetty, whom she characterized as her
14

direct supervisor, within as little as one to two months. Def.
56.l

~~

99; Pl. 56.l

~~

99,

137, 140; Reply 56.1

~

137. And even

that modest delay was understandable, given that Antonetty, in
Castro's view, controlled all aspects of Trabajamos and was the
chief culprit in the fraud.

See Pl. 56.1

~~

13, 121-124.

Additionally, there is no real dispute that within a few months
of confronting Antonetty with the fraud,
findings to the Board. Def. 56.1

~~

Castro presented her

77-82; Pl. 56.1

~~

77-82.

Notwithstanding the slight delay and the fact that Castro
processed some of the invoices, a reasonable jury could conclude
that she believed the fraudulent invoices she reported to
Antonetty and the Board alike represented a gross waste.
A jury could likewise conclude that Castro's belief that
the fraudulent invoices were a gross waste was objectively
reasonable. Trabajamos points out that the dollar value of the
fraudulent invoices was comparatively minor

(around $9,000) and

that it is possible that at least some of the invoiced work was
performed, though not by the individuals named in the invoices.
Reply 56.l

~

138; See Castro Deposition, Ex.

6 to Rotenberg

Deel., at 174-75, 363-64, 367-69. However, phrased differently,
Trabajamos concedes that Castro discovered that Trabajamos had,
at times, either paid people for work they never did or paid for
"work" that was never done at all. Def. 56.1
15

~~

97,

102-04; Pl.

56.1

~~

97,

102-04. There is also evidence that some of this

money went directly to Antonetty, the former Chairperson of the
Board and a central figure at Trabajamos even after he stepped
down; some also may have gone to the teenage son of the current
Chairperson, Sandra Martinez. See Def. 56.l
~~

~

97; Pl. 56.l

97, 138-38. This evidence is sufficient for a jury to find

Castro's belief that there was gross waste at Trabajamos
objectively reasonable.
Trabajamos's final argument under the first element is that
Castro's reports of misconduct to individual Board members do
not qualify as protected disclosures. See, e.g.,
Trabajamos Community Head Start,

Defendant

Inc.'s Reply Memorandum of Law

("Def. Reply"), ECF No. 27, at 5 n.4; Transcript dated July 13,
2016, at 22-23. ARRA protects disclosures made to,

inter alia,

the Board of Directors or "a person with supervisory authority
over the employee

(or such other person working for the employer

who has the authority to investigate, discover, or terminate
misconduct)." ARRA§ 1553(a). Trabajamos does not deny that
Castro's report to the full Board on December 5, 2013 falls
within the statute, but argues that Castro's two reports to
individual Board members do not, because Antonetty lacked
supervisory authority over Castro and because there is
insufficient evidence of the report to Block.
16

However,

it is clear that there is a genuine dispute of

material fact as to whether Antonetty had either "supervisory
authority" over Castro or "the authority to investigate,
discover, or terminate misconduct" when Castro disclosed
misconduct to him in August or September 2013.

3

Trabajamos points

to evidence that Castro was, as a formal matter, personally
responsible for day-to-day operations, that she reported to the
entire Board of Directors, and that Antonetty claims to have had
had "as little as possible" involvement in Trabajamos's day-today affairs.

Def. 56.1

~~

7, 12-15; Reply 56.1

~~

121-24.

However, viewing the evidence most favorably to Castro, a jury
could find that although Castro was nominally the highest
ranking Trabajamos officer, Antonetty was her de facto
supervisor. Castro repeatedly testified that she reported
directly to Antonetty, that all material decisions were subject
to his approval,

and that they spoke daily about all Trabajamos

business. Pl. 56.1

~~

13, 122-24. That Antonetty continued to be

involved in Trabajamos personnel matters even after he resigned

Implicit in Trabajamos's position is an argument that reports
to individual Board members do not constitute reports to the
entire Board, because otherwise, Castro's report to Antonetty
would fall within ARRA's protection even absent any supervisory
authority. See ARRA§ 1553(a). This argument was not briefed,
but the Court will assume it is correct for purposes of this
discussion, though there may be good arguments to the contrary.
3

17

further suggests that he had the requisite level of authority
over Castro while he was still on the Board. For example,

in a

recorded conversation with Santiago, Antonetty suggested that he
was personally involved in the decision to grant her "voluntary"
leave of absence, which occurred after his resignation.
H to Clark Deel.

("Naomi asked for a leave of absence, which was

There's no reason that I wouldn't,

granted.

See Ex.

wouldn't grant her a leave of absence.").

that we

In light of this

conflicting evidence, whether Antonetty had the requisite level
of authority over Castro is a question for the jury.
However, Castro has failed to create a genuine dispute of
material fact as to whether she made a protected disclosure to
Block. There is no evidence that Block controlled the Board
(indeed, such evidence as there is on this point suggests he was
largely uninterested in Trabajamos affairs,
31; Reply 56.l

~~

see Pl. 56.l

~~

130-

130-31). Nor is there any evidence that Block

had any personal supervisory or investigatory authority over
Castro at any time. Moreover, at best, the evidence shows that
Castro told Block on a single telephone call that she had some
unspecified "evidence of fraud and waste," without supplying any
details.

Pl. 56.1

~

142. Even viewing the evidence most

favorably to the plaintiff, this is far too vague to satisfy the
requirement that a whistleblower must report "information that
18

the employee reasonably believes is evidence of .
waste of covered funds." ARRA§ 1553(a)

. a gross

(emphasis added).

Turning to the third element of Castro's claim, Trabajamos
next argues that Castro failed to show that the protected
disclosures just discussed were a "contributing factor" in the
adverse employment actions taken against her. See ARRA
§ 1553(c) (1) (A) (i)
that a

(requiring whistleblowers to "demonstrate[]

[protected] disclosure

was a contributing factor in

the reprisal"); see also Wang, 2016 WL 4007067, at *32

("To

recover under ARRA's whistleblower provision, a plaintiff must
prove by a preponderance of the evidence .

that the

protected disclosure was a contributing factor in the reprisal."
(alterations omitted)).
While the Second Circuit has not construed the term
"contributing factor" in this context, the lower courts agree
that it means "any factor which, alone or in connection with
other factors,

tends to affect in any way the outcome of the

decision." See, e.g.,

Perez v.

Progenies Pharm.,

Supp. 2d 353, 366 (S.D.N.Y. 2013)
Telvent GIT, S.A.,

Inc.,

965 F.

(Sarbanes-Oxley); Leshinsky v.

942 F. Supp. 2d 432,

449

(S.D.N.Y. 2013)

(same). It is also clear that "a whistleblower need not
demonstrate the existence of a retaliatory motive on the part of
the [person(s)] taking the alleged prohibited personnel action
19

in order to establish that [the whistleblower's] disclosure was
a contributing factor to the personnel action." Marano v. U.S.
Dep't of Justice, 2 F.3d 1137, 1141 (Fed. Cir. 1993)
(Whistleblower Protection Act)

(emphasis in original). More

narrowly, ARRA provides two non-exclusive ways by which a
plaintiff may use circumstantial evidence to establish that a
protected disclosure was a contributing factor in an employee's
discharge, demotion, or other negative employment action: by
showing that "the official undertaking the reprisal knew of the
disclosure" or that the timing of the employment action
reasonably suggests that it was connected to the disclosure. See
ARRA

§

1553 (c) (1) (A) (ii) (I)- (II).

Here, there is no dispute that Castro suffered three
distinct negative employment actions.

In late October 2013,

Castro took a leave of absence, Def. 56.1

~~

52, 58; Pl. 56.1

~~

52, 58, and while the parties dispute whether it was voluntary,
Trabajamos does not deny that it occurred in a context that
falls within the statute's protections. See, e.g., Transcript
dated July 13, 2016, at 23. On November 12, 2013, the Board
extended Castro's leave of absence under such circumstances.
Def. 56.1

~

62; Pl. 56.1

~

62. Finally, and most seriously, the

Board fired Castro shortly after the December 5, 2013 Board

20

meeting at which she presented the evidence of fraud.
'll'll 93-94,

96; Pl.

Thus,

56. 1 'll'll 93-94,

Def. 56.1

96.

the issues under the contributing factor element are

whether her disclosures to Antonetty and the Board were
"factor[s] which, alone or in connection with other factors,
tend[ed]

to affect in any way" the Board's decisions to place

her on a leave of absence,

extend that leave, or ultimately fire

her. Beginning with the disclosure to Antonetty, Trabajamos
argues that the disclosure to Antonetty cannot have been a
contributing factor in the Board's employment actions against
Castro because there is no evidence that the Board was aware of
the disclosure.
The Court is not persuaded. As an initial matter,

no such

evidence is required by the statute; as noted above, ARRA
provides that "evidence that the official undertaking the
reprisal knew of the disclosure"

(here,

acceptable, but not necessary, evidence.

the Board)
4

See ARRA

is
§

Bechtel v. Administrative Review Board, 710 F.3d 443, 447 & n.5
(2d Cir. 2013), which found that Sarbanes-Oxley requires proof
that the employer "knew or suspected" that the whistleblower
engaged in protected activity, is not to the contrary, because
unlike ARRA, that statute does not provide that knowledge of the
official taking the reprisal is permissible evidence that can
satisfy the contributing factor element. See ARRA
§ 1553 (c) (1) (A) (ii) (I). The clear implication is that an ARRA
claimant may succeed without showing employer knowledge, so long
as she adduces otherwise sufficient circumstantial evidence.
21
4

1553 (c) (1) (A) (ii) (I). More importantly, even though there is no
direct evidence that the Board was aware of the disclosure to
Antonetty, a jury could readily infer such knowledge from the
abundant evidence that Antonetty maintained close personal and
professional ties with the Board and was involved in matters
directly relating to Castro's employment, even after he formally
resigned from Trabajamos in early October 2013.
In particular, it is undisputed that at some point after
Antonetty resigned from the Board, he attended the meeting at
which he, Lont, and Castro discussed Castro's "voluntary" leave
of absence.

Def. 56.1

~

44; Pl. 56.1

~

44.

Indeed, viewed most

favorably to Castro, the evidence shows that Antonetty spoke on
behalf of Trabajamos at this meeting and made the decision to
grant Castro's leave. See Ex. H to Clark Deel.
a leave of absence, which was granted.

("Naomi asked for

. There's no reason

that I wouldn't, that we wouldn't grant her a leave of
absence."). Similarly, on November 18, 2013, Lont asked
Antonetty for comments on a draft email to Castro concerning the
terms of Castro's leave

("do i

[sic] need to write more"), and

Antonetty directed her to make substantive changes. See Ex. J.

22

to Clark Deel.

("[A]dd Other than a personal matter you are not

to discuss business issues with any Trabaj amos staff.") . s
As for the disclosure to the full Board on December 5,
2013, Trabajamos acknowledges that the suggestive timing is
circumstantial evidence in Castro's favor
1553 (c) (1) (A) (ii) (II)) -

(see ARRA§

Castro disclosed the fraud,

meeting, and was promptly fired -

left the

but argues that no inference

of causation arises because Trabajamos had resolved to fire her
for misconduct beforehand. Trabajamos points out that it is
undisputed that Castro had rented a car with a Trabajamos credit
card, that she had hired her boyfriend to perform services for
Trabajamos, and that the minutes of the December 5 Board meeting
cited a number of deficiencies in Castro's performance as bases
for firing her. Def.
25,

56.1

~~

21-23, 25,

47; Pl. 56.1

~~

21-23,

47; Ex. 5 to Rotenberg Deel.
Whether such alternative causes can, as a matter of law,

defeat inferences from temporal proximity on summary judgment is
an open question. The fact that ARRA separately provides that a
defendant can rebut a plaintiff's case using evidence that the
whistleblower would have been fired in any event suggests that

s As noted above,

Lont lives rent-free in a house owned by
Antonetty, who continued to provide guidance to the Trabajamos
Board even after Castro was fired. Pl. 56.1 ~~ 128-29; Reply
56.1 ~~ 128-29.
23

such matters are not properly part of the contributing factor
analysis. See ARRA

§

1553 (c) (1) (B). However, the Court need not

resolve this question.

In two recent Sarbanes-Oxley cases, the

Second Circuit has assumed, without deciding, that a "legitimate
intervening basis" for adverse action can, on summary judgment,
defeat an inference from temporal proximity, but both times it
found the proffered bases insufficient because they were the
subject of materially conflicting evidence. See Yang v.
Navigators Grp.,
Dec. 22, 2016)

F. App'x

2016 WL 7 4 3 64 8 5, at * 2

(summary order); Sharkey v.

660 F. App'x 65,

67-68

(2d Cir. 2016)

( 2d Cir.

JPMorgan Chase

Co.,

&

(summary order). That is

the case here as well.
In particular, assuming arguendo that Trabajamos's argument
is cognizable under the third element of an ARRA claim, the
sharply conflicting accounts of the December 5, 2013 meeting
preclude summary judgment. As background, the minutes of a Board
meeting from December 2, 2013 indicate that the Board was
considering asking her to resign, but had reserved a final
decision for the coming meeting with Castro. See Def. 56.1
Ex.

~

69;

36 to Rotenberg Deel.; see also supra n.2. As for the

meeting itself, Castro testified that after she presented the
evidence of misconduct, the Board asked her if she was recording
the conversation and told her to leave the meeting, which she
24

did. Pl.

56.1

~~

144, 146; Castro Deposition, Ex. A to Clark

Deel., at 201-03. Santiago, who attended at Castro's request,
testified that the Board avoided discussing the problematic
documents,

initially asked Castro to accept a demotion,

later decided to fire her.

Pl. 56.l

~

and

145; Santiago Deposition,

Ex. C to Clark Deel., at 104-05. Lont vaguely recalled
discussing Martinez's son (in whose name some of the supposedly
fraudulent invoices were made out)

and that, at some point,

Castro "stormed out." Reply 56.l

146; Lont Deposition, Ex. 10

~

to Rotenberg Deel., at 59. Block effectively did not recall the
meeting at all,

see Block Deposition, Ex.

9 to Rotenberg Deel.,

at 38-39, and Martinez, the third Board member present, was not
deposed in this case. Notwithstanding Trabajamos's pre-meeting
probe into Castro's misconduct, a jury could credit Castro's and
Santiago's testimony and find that Castro's disclosure of
misconduct ''tend[ed] to affect in any way" the decision to fire
her.
Trabajamos's previous argument fits better under the
section of ARRA providing that an employer may rebut the
plaintiff's case with "clear and convincing evidence that the
non-Federal employer would have taken the action constituting
the reprisal in the absence of the disclosure." See ARRA§
1553 (c) (1) ( (B); see also Yang,

2016 WL 7436485, at *l
25

("If a

plaintiff carries the burden, the defendant employer can still
secure a favorable judgment by showing no genuine dispute that
the record clearly and convincingly demonstrates that the
employer's adverse action would have been taken even in the
absence of protected activity.")

(Sarbanes-Oxley). However, for

much the same reasons that Trabajamos is not entitled to summary
judgment on the contributing factor element,

it is not entitled

to summary judgment under this more demanding standard.
Particularly fatal to Trabajamos's argument is the fact that the
Board appears to have first taken an interest in Castro's poor
performance and misconduct - the purported basis for her
termination - after Castro had reported the fraudulent invoices
to Antonetty. See Pl. 56.l

~~

140-41

(Castro reported to

Antonetty in August or September 2013); Def. 56.1

~~

36-37

(minutes from an October 3, 2013 Board meeting discussing
deficiencies in Castro's performance). Thus, even if the Board's
investigation (which was chiefly run by Lont, Antonetty's close
friend,
56.l

~

associate, and rent-free tenant,

see Def. 56.l

~

59; Pl.

59) uncovered real misconduct, the record is equally

consistent with Trabajamos searching for seemingly legitimate
reasons to fire Castro in part because she had disclosed
misconduct to Antonetty. Thus, at a minimum, Trabajamos has

26

failed to show with clear and convincing evidence that it would
have fired Castro regardless of her disclosures.
Finally, Trabajamos repeatedly points out that much of the
evidence in Castro's favor is her own largely uncorroborated
testimony, and that Castro has given shifting accounts of some
key events.

~'

2016, at 27-28.

Def. Reply at 6-7; Transcript dated July 13,

For example, Castro initially claimed that she

had reported misconduct on only one occasion - to the Trabajamos
Board on December 5, 2013 - and it was not until her deposition
that she added that she also disclosed to Antonetty and Block in
the months before that meeting. See Transcript dated July 13,
2016, at 9-18. The suggestion seems to be that Castro's
testimony should be discounted,

in whole or in part, thus

clearing the way for summary judgment to Trabajamos.
This argument is meritless. Castro's testimony is
admissible evidence that cannot be disregarded on a motion for
summary judgment merely because it conflicts with other portions
of the record. See Yang,

2016 WL 7436485, at *1

("Yang's own

testimony as to the communications at issue constituted
admissible evidence and, thus, should not have been excluded
from consideration in reviewing defendant's summary judgment
motion."). The factual disputes Trabajamos identifies are
classic jury fodder. Moreover,

it is well-established that,
27

except in the most extreme circumstances, courts "eschew
credibility assessments" on a motion for summary judgment. See
Smith, 839 F.3d at 166. Castro filed an amended complaint
conforming to her deposition testimony; a jury is now required
to evaluate the credibility of her claim.
Thus,

in sum, with the one exception noted below,

Trabajamos's motion for summary judgment is hereby denied. There
are genuine issues of material fact as to

(i) whether Castro

made protected disclosures to Antonetty in August or September
2013 and to the Board on December 5, 2013;

(ii) whether she made

those disclosures with the objectively reasonable belief that
the fraudulent invoices represented a gross waste of covered
funds;

(iii) whether those disclosures were a contributing

factor in Trabajamos's decisions to place Castro on leave,
extend the leave, and fire her; and (iv) whether there is clear
and convincing evidence that Trabajamos would have fired Castro
even if she had not reported the misconduct. However,
Trabajamos's motion is granted to the limited extent that it
argues that Castro's telephone call to Block does not qualify as
a protected disclosure.
The parties are directed to jointly call Chambers by no
later than February 24, 2017 to schedule a trial in this case.
The Clerk of Court is directed to close docket entry 17.
28

SO ORDERED.
Dated:

New York, NY
February ~Q 2017

29