Manion v. Spectrum Healthcare Resources (Summary)

RETALIATORY TERMINATION – FEDERAL CONTRACTOR

Manion v. Spectrum Healthcare Resources, No. 7:12-CV-247-BO (E.D. N.C. Aug. 6, 2013)

The United States District Court for the Eastern District of North Carolina denied a health care contracting company’s motion to dismiss an employed psychiatrist’s claims of illegal reprisal for protected disclosures under the Defense Contractor Whistleblower Protection Act (“DCWPA”).

The psychiatrist, who was employed by a contracting service to provide psychiatric treatment to severely injured sailors and marines returning from combat duty, was terminated after he filed complaints with Congress and the OIG about the lack of protocols for managing psychotic, suicidal and homicidal patients, as well as chronic under-staffing in a Navy hospital.  The psychiatrist sued both the health care contracting company and the secondary company that it had assigned his contract to in order to monitor his employment.  The health care contracting company claimed that the psychiatrist had no standing to sue under the DCWPA because he was not an employee civilian defense contractor, but rather an independent contractor of the secondary company under a personal services contract with the Navy.

The court resolved the issue of whether the psychiatrist was entitled to whistleblower protection under the DCWPA by pointing out that a similarly remedial statute, the False Claims Act, favored a broader definition of the term “employee” to protect the government from fraud.