Robert W. Cappellano vs. Massachusetts Bay Transportation Authority & others

Stephen Trychon vs. Massachusetts Bay Transportation Authority. No. 15-P-1316. Suffolk. May 16, 2016. September 15, 2016. Present: Agnes, Massing, & Kinder, JJ. Massachusetts Bay Transportation Authority. Practice. Civil. Motion to dismiss. Employment. Termination, Retaliation. A Superior Court judge erred in dismissing the plaintiff’s complaint charging the Massachusetts Bay Transportation Authority (MBTA) with violations of G. L. c. 149, § 185, the Massachusetts public employee whistleblower statute, where the plaintiff, a former managerial employee of the MBTA, alleged sufficient facts to plausibly show that he had engaged in protected activities (i.e., reporting contract fraud, unsafe track conditions, and the high incidence of eye injuries among employees), and that those activities played a substantial or motivating part in the MBTA’s decision to terminate his employment. [254-260] Civil action commenced in the Superior Court Department on February 11, 2014. A motion to dismiss was heard by Heidi E. Brieger, J. Kevin G. Powers for the plaintiff. Jeffrey A. Dretler for the defendant. Agnes, J. In this appeal, we must determine the legal sufficiency of Stephen Trychon’s complaint charging the Massachusetts Bay Transportation Authority (MBTA) with violations of G. L. c. 149, § 185, the Massachusetts public employee whistle-blower statute (whistleblower statute). A Superior Court judge allowed the MBTA’s motion, pursuant to Mass.R.Civ.P. 12(b)(6), 365 Mass. 755 (1974), to dismiss the complaint. We conclude that Trychon has stated a plausible claim for relief. See Iannacchino v. Ford Motor Co., 451 Mass. 623, 636 (2008). Accordingly, we reverse the judgment. 1. Standard of review. We review the order dismissing the complaint de novo, accepting the truth of all factual allegations and drawing all reasonable inferences in Trychon’s favor. See Glovsky v. Roche Bros. Supermarkets, Inc., 469 Mass. 752, 754 (2014). A complaint is sufficient to withstand a motion to dismiss if the factual allegations “plausibly suggest” an entitlement to relief, raising the right to relief “above the speculative level.” Harrington v. Costello, 467 Mass. 720, 724 (2014), quoting from Iannacchino, supra. See Mass.R.Civ.P. 8(a)(1), 365 Mass. 749 (1974). The factual content is sufficient if it “allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged,” Garayalde-Rijos v. Municipality of Carolina, 747 F.3d 15, 23 (1st Cir. 2014), quoting from Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009), and “it. . . raise[s] a reasonable expectation that discovery will reveal evidence [of the alleged misconduct].” Lopez v. Commonwealth, 463 Mass. 696, 712 (2012), quoting from Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007). In conducting the “context-specific” inquiry required by the plausibility standard, we must “draw on [our] judicial experience and common sense.” Lopez, supra, quoting from Ashcroft, supra at 679. “The critical question is whether the claim, viewed holistically, is made plausible by ‘the cumulative effect of the factual allegations’ contained in the complaint.” A.G. v. Elsevier, Inc., 732 F.3d 77, 82 (1st Cir. 2013), quoting from Ocasio-Hernández v. Fortuño-Burset, 640 F.3d 1, 14 (1st Cir. 2011). 2. Background. We recite the allegations of Trychon’s complaint, along with reasonable inferences that may be drawn from those allegations. Although merely allegations, we must accept them as true for the purposes of reviewing the dismissal of a complaint. See Harrington, supra. Trychon’s employment. The holder of a master’s degree in business administration, Trychon worked in various management positions for the MBTA from his date of hire on March 30, 2009, until April 10, 2013. During that time period, he was promoted twice and received excellent performance reviews. His job duties and responsibilities grew over time. Trychon alleges that he made it his mission to eliminate the causes of the MBTA’s $180 million debt. For example, Trychon brought in consultants to review the MBTA’s station cleaning program, working with them on creating new, more cost-effective contract specifications. As a result of his efforts, Trychon asserts that he saved taxpayers $18 million over a five-year period. According to Trychon, with the exception of his direct superior, Michael Turcotte, MBTA management was not interested in changing the “culture of waste and inefficiency.” Contract fraud investigation. Assigned by Turcotte on or about February 10, 2011, to investigate possible contract fraud, Trychon alleges he uncovered two improprieties at the MBTA: the illegal extensions of expired contracts and the practice of dividing large contracts and purchases into smaller ones to avoid the necessity of management approval. Trychon reported his findings to Turcotte and to Jonathan Davis, the then acting general manager of the MBTA (GM) and former head of the procurement department. An official fraud investigation revealed that the root cause of the fraud was the procurement department. As a result of the investigation, at least one employee was fired. Informed by the investigating accountant that the evidence of fraud in the procurement department “ran very deep” and that many more employees would be implicated if the investigation continued, Davis stopped the investigation. Eyewear policy. In or about May, 2011, Trychon noticed a significant number of eye injuries sustained by MBTA employees. As a result of an investigation, Trychon drafted and implemented a new eyewear policy that required all E & M employees performing potentially hazardous duties to wear protective equipment. After Trychon and Turcotte discovered general disregard of that policy by E & M employees during a department-wide safety audit, a directive was issued requiring all E & M managers to conduct daily safety inspections and to file daily reports. On or about January 25, 2012, an employee who reported to Patrick Kineavy, the director of MOW, was disciplined for refusing to put on the required eyewear as instructed by Trychon. When Trychon observed continuing noncompliance with the policy among Kineavy’s group, Kineavy received a written warning, was placed on a thirty-day corrective action plan, and was required to document and report his safety-compliance inspections. When asked to produce proof of his safety-compliance inspections, Kineavy was unable to do so, and later provided Trychon with twelve allegedly fabricated safety observations. In or about April, 2012, Trychon wrote a memorandum to Turcotte recommending that Kineavy be removed from his director duties. Acting GM Davis and MBTA human resources director William Perez rejected that recommendation independently submitted to them by Turcotte. Kineavy’s safety-compliance reporting duties were switched from Trychon to Turcotte. In August, 2012, Turcotte sought in writing Kineavy’s termination based upon Kineavy’s verbal threat, failure to enforce the eyewear policy, fraudulent reporting, and continued poor performance reviews. State Secretary of Transportation Richard Davey and acting GM Davis stepped in and created a new job for Kineavy with minimal responsibilities and better pay. They also switched Kineavy’s reporting duties to Sean McCarthy, “an old South Boston buddy of [Kineavy].” Suspected time fraud. The complaint further alleges that “[i]t was reported” to Trychon and Turcotte that “very close friends” of Kineavy and Matthew McGuire, the deputy director of MOW, did not punch in for work by hand scanner as required by MBTA policy, but were still being paid. Trychon determined that a supervisor in SMI “was taping or was allowing his name to be taped” on time sheets without properly verifying that the employees had actually reported for work. Trychon decided to conduct a full investigation of E & M to determine the extent of the practice. News of the investigation leaked, and the original records of Kineavy and McGuire were stolen. Unsafe track conditions. Trychon claims that, pursuant to State regulation, the MBTA is required to “update and create new track standards every two (2) years.” In or about August, 2012, Try-chon discovered that the last updates were made in 2008. Trychon directed Kineavy and McGuire to bring the MBTA into regulatory compliance as soon as possible. To that end, Trychon approved the hiring of a highly-regarded, independent track inspector, HNTB. The report issued by HNTB warned the MBTA of alarming safety conditions needing correction that dated back to HNTB’s previous inspection in 2006. Neither Kineavy nor McGuire had addressed the unsafe track conditions since 2006. McGuire steered the report to himself and did not disclose it to Trychon. A concerned member of McGuire’s staff provided copies of the HNTB report to Trychon, who in turn passed copies on to Tur-cotte and to his subordinates, directors Joseph McNall and Andrew Baker. Asked by Turcotte why he had hidden the results of the report, McGuire allegedly became enraged and accused Turcotte and Trychon of “having an agenda” against him and Kineavy. When Turcotte requested that Perez “relieve [McGuire] of his duties,” Perez stated that he would transfer McGuire to the MBTA’s safety department. McGuire informed his boss, Baker, that “[b]ig changes are coming, and he (McGuire) is not going anywhere.” Baker reported the comment to Trychon and to Turcotte. Adverse employment actions. The complaint also alleges that following Turcotte’s “functional[ ] demotion],” on March 1, 2013, by the new GM, Beverly Scott, Turcotte resigned. On April 9, 2013, Trychon received an unsigned card that stated, “ ‘Good luck.’ ‘Enjoy your layoff!’ and ‘Fuck off.’ ” On the following day, Perez informed Trychon that he was laid off. At the time, Trychon had not yet completed his investigation of the suspected time fraud. 3. Discussion. In general, G. L. c. 149, § 185, protects public employees from retaliation by their employers for disclosing to a supervisor or public body workplace activities, policies, or practices that the employee reasonably believes violate the law, or pose a risk to public health, safety, or the environment. There is little decisional law by our appellate courts construing § 185’s provisions. In contrast, the Federal courts have had the opportunity to construe and apply § 185 on a number of occasions. While we are required to make our own judgment about the intent of the Legislature in adopting the statute, and are not bound by interpretations reached by Federal courts, we regard those decisions as persuasive authority and, in this case, find them to be instructive. See Fidler v. E. M. Parker Co., 394 Mass. 534, 545 (1985). There are three elements to a whistleblower claim brought under G. L. c. 149, § 185. The plaintiff-employee must prove that (1) the employee engaged in a protected activity; (2) participation in that activity played a substantial or motivating part in the retaliatory action; and (3) damages resulted. See Welch v. Ciampa, 542 F.3d 927, 943 (1st Cir. 2008); Taylor v. Freetown, 479 F. Supp. 2d 227, 241 (D. Mass. 2007). The plausibility standard, as clarified by the United States Court of Appeals for the First Circuit, does not require the pleading of specific facts to establish each element of the prima facie case. See Rodriguez-Reyes v. Molina-Rodriguez, 711 F.3d 49, 54 (1st Cir. 2013) (noting that “prima facie [case] is an evidentiary standard, not a pleading standard”). The prima facie elements, however, are relevant “background against which a plausibility determination should be made.” Ibid. a. Protected activity. Only certain acts are protected by § 185, including, as relevant in this case, disclosures (or threatened disclosures) to a supervisor of and objections to an employer’s activity, policy, or practice that the employee reasonably believes violates the law or poses a risk for public health or safety. See G. L. c. 149, § 185, (3). We construe the allegations of the complaint as resting on both statutory subsections. Trychon has alleged sufficient facts to plausibly show that he engaged in one or more activities protected by § 185. First, following his investigation into alleged contract fraud, he reported two practices (the extension of expired contracts and the splitting of contracts) that he reasonably could have believed violated the public bidding law. See G. L. c. 149, § 44J(1), (3). Compare Romero v. UHS of Westwood Pembroke, Inc., 72 Mass. App. Ct. 539, 541 & n.3 (2008). Second, even if he was mistaken about the track inspection and maintenance laws, Trychon reasonably could have believed, based on HNTB’s 2012 report and on common sense, that the MBTA’s failure to correct the alarming track conditions for six years posed a risk to the public safety within the meaning of § 185. His disclosures to Turcotte of the updated HNTB report, the nonfea-sance by Kineavy and McGuire, and the alleged cover-up by McGuire qualified as protected activity for purposes of pleading his § 185 claim. We agree with the MBTA that the phrase “a risk to public health, safety or the environment,” as it appears in § 185, means a risk to public health, public safety, or the environment. However, drawing on our judicial experience and common sense, we are not persuaded by the MBTA’s further argument that Try-chon’s disclosures to his supervisors about the high incidence of eye injuries among employees, and the failure of certain managers to enforce the MBTA’s policy designed to reduce the number of such injuries is not, as a matter of law, a disclosure relating to the public health or public safety. Disclosures relating to workplace activities, policies, or practices that have a significant impact upon the cost of public employment, including healthcare costs, may diminish the availability of limited public funds for other pressing public needs, including public needs relating to health and safety, and therefore may be protected under the whistleblower statute. The MBTA is dependent upon public funding from the Commonwealth and its cities and towns to sustain its operations. See, e.g., St. 2015, c. 46, § 2E (line items 1595-6368 and 1595-6369 of the general appropriations law for fiscal year 2016, transferring public funds to accounts earmarked to support the operation of the MBTA). One operational cost of the MBTA is the payment of benefits to employees injured on the job because the MBTA is a self-insurer. See McCarthy’s Case, 66 Mass. App. Ct. 541, 541, 545-546 (2006). To the extent that the MBTA uses taxpayer dollars to compensate its injured employees, it diminishes the availability of those funds to be used for other purposes relating to public health and public safety. At this early stage of the proceedings, we cannot say, as a matter of law, that Trychon has not stated a plausible claim for relief with regard to the MBTA’s eye injury policy. On the other hand, the allegations relating to the suspected time fraud were too vague to support an inference that Trychon qualified for protected whistleblower status. An unnamed third party reported the violation of the hand scanner policy to Trychon and to Turcotte. Trychon, it was alleged, took two actions: he determined that a particular supervisor in SMI was not verifying employee time and he commenced an “E&M-wide” investigation. While a reasonable inference of fraudulent time reporting involving Kineavy and McGuire could be drawn, these sparse facts do not support an inference that before his layoff, Trychon engaged in any protected activity as to the suspected time fraud. No disclosure of, or threat to disclose, suspected time fraud to a supervisor may reasonably be inferred from these facts. See Estock v. Westfield, 806 F. Supp. 2d 294, 309 (D. Mass. 2011) (“The [whistleblower] statute prohibits retaliatory conduct on the part of an employer, not preventative conduct”). Although Trychon’s allegations concerning his conduct with respect to the suspected time fraud do not amount to protected activity, his other allegations of whistleblowing at this stage of the litigation are sufficient to withstand dismissal for failure to state a claim. b. Causation. We conclude that Trychon’s complaint, viewed as a whole, sufficiently alleged a causal connection between the protected activities and a retaliatory layoff to satisfy the plausibility standard. At the time of his discharge, Trychon’s trajectory was on the rise. He had evidently proven himself to be an effective and dedicated public employee, saving taxpayers millions of dollars, identifying fraudulent contracts, and exposing alarming track conditions that posed a risk to public safety. He had been promoted twice, and the scope of his job responsibilities was expanding. Generally, unless adverse conditions require a different course of action, employers who follow sound business practice do not select employees with excellent performance records for termination. Likewise, employers who follow sound business practice do not ordinarily transfer, shield, or reward employees whose poor performance or wrongful acts warrant termination, as the MBTA allegedly did according to the complaint. Trychon alleged adequate facts plausibly suggesting retaliatory animus harbored by MBTA management. The narrative of the complaint suggests a continuing pattern of opposition and hostility to Trychon, and to his mainstay Turcotte, over an extended period of time. Trychon claims that Kineavy and McGuire disregarded his directives, left fraudulent reports in his mailbox, hid HNTB’s alarming inspection report, and stole original records to thwart his time fraud investigation. Kineavy allegedly threatened to “fix” Turcotte “for good,” while McGuire accused Trychon and Turcotte of having a personal agenda against him and Kineavy. The retaliatory animus supposedly extended to the upper echelons of management. One could reasonably infer that acting GM Davis did not appreciate Trychon’s embarrassing disclosure of wrongdoing in a department that he personally had overseen, and that he wanted Trychon and his spotlight gone. After having shelved the investigation to avoid the implication of more employees in the contract fraud, Davis evidently supported the insubordinate and hostile Kineavy over Trychon and Turcotte. Indeed, it could be inferred that Davis, supported by Secretary Davey, rewarded Kineavy with an objectively better job for his opposition. The complaint alleges that the consequence of McGuire’s six years of nonfeasance as to track safety and his nondisclosure of the disturbing HNTB report was a planned transfer to the safety department. The treatment afforded to Kineavy and to McGuire plausibly suggested that they had influence far higher than their subordinate positions in the organizational chart. In short, for pleading purposes, the hostile acts and statements by Kineavy and McGuire, the unnatural protection afforded those individuals, and acting GM Davis’s suppression of the official contract fraud investigation initiated because of Trychon permit a plausible inference that Trychon’s protected activities played a substantial or motivating part in the decision to terminate him. Given the continuing pattern of opposition faced by Trychon, the temporal gap between Trychon’s protected conduct and his termination was not so attenuated as to fail to meet the plausibility standard. Trychon did not identify the individual who made the final decision to discharge him. Where, as here, it could reasonably be inferred that Davis and managers under his protection influenced that decision, the omission did not warrant the dismissal of the complaint. See Mole v. University of Mass., 442 Mass. 582, 598-600 (2004). In the alternative, the MBTA urges us to affirm the judgment based on the “normal job duties” exclusion. That doctrine limits employer liability where the employee’s disclosure to a supervisor occurred as part of