UNITED STATES OF AMERICA, ex rel. WILLIAM ROBIN HOOD, et al., Plaintiffs/Relators,
SATORY GLOBAL, INC., Defendant.
ROSEMARY M. COLLYER, District Judge.
Plaintiffs William Robin Hood and Troy Maxon, information technology specialists, moved across the country to work for Satory Global, LLC in Washington, D.C. Plaintiffs were assigned to do work for the Department of Justice pursuant to a subcontract Satory held for information technology support services. They allege that, upon beginning work, they learned that Satory was fraudulently billing the Department of Justice by charging for time spent on private corporate development work instead of on the contract and by performing its subcontracting tasks in an inefficient, unethical way that guaranteed Satory future contracting work. When Mr. Robin raised concerns to his supervisor and to Satory management, he was terminated; Mr. Maxon contends that he was constructively discharged shortly thereafter. Plaintiffs then brought a qui tam suit under the False Claims Act and District of Columbia common law. After the United States declined to intervene in the case, Plaintiffs served the Complaint on Satory, which now moves to dismiss. For the reasons set forth below, the Court will grant the motion to dismiss in part and deny it in part.
A. Plaintiffs Join Satory
Plaintiffs are two computer experts, William Robin Hood and Troy Maxon, who were recruited for Satory by a recruiting firm called Global IT Resources in July 2010. Compl. [Dkt. 1] § 3. Satory recruited them to work on a Department of Justice ("DOJ") contract ("the Contract") for which Satory was the subcontractor to Access Systems, Inc., the prime contractor. Id. The Contract was for "Information Technology (IT') Support Services" and was a "Multiple Award Contract under which twelve prime contracts were awarded, each of which [was] an Indefinite Delivery/Indefinite Quantity, Time and Material contract." Id. § 4. The contract had a "schedule of fixed unit price Labor Hour rates." Id. Satory's work was performed at a DOJ building at 2 Constitution Square, N.E., in Washington, D.C. called "2Con, " where the DOJ Enterprise Services Staff-Infrastructure Development project ("ESS/ID") was located. Id. § 5.
Both Messrs. Robin and Maxon agreed to move to the Washington, D.C. area with their families to take positions with Satory in the late summer of 2010-Mr. Robin from Hawaii and Mr. Maxon from Oregon. Id. §§ 14-16, 18-19. On August 5, 2010, Satory sent Mr. Robin an Offer Letter for a position as "Associate I" at a monthly salary of $11, 166.66, plus benefits and a possible bonus. Id. § 14; see also Def. Mot. Dismiss ("Def. MTD") [Dkt. 16], Ex. 1 [Dkt. 16-1] (Robin Offer Letter). Mr. Robin's "initial role" was to be SharePoint Administrator with the "primary responsibility" of "support[ing] the [operations & maintenance] mission of the infrastructure delivery and shared services teams with [DOJ]." Robin Offer Letter at 1. The Offer Letter also listed various "[o]ther duties" and stated: "these activities and services may change." Id. The second page of the Offer Letter, next to Employment Status, stated: "Your employment with the Company is at-will' and you will not be entered into a contract of employment." Id. at 2. Mr. Robin was provided a Relocation Expense Reimbursement and Repayment Agreement, offering him $15, 000 for relocation expenses. Compl. § 14; see also Def. MTD, Ex. 3 [Dkt. 16-3] (Robin Relocation Agreement). The Relocation Agreement also included: "Employment is at-will at all times." Robin Relocation Agreement at 1. Mr. Robin executed the Offer Letter on August 9, 2010 and the Relocation Agreement on August 10, 2010; the Relocation Agreement was countersigned by Haldane Smith of Satory on September 2, 2010.
Mr. Maxon signed a substantially similar Offer Letter on August 26, 2010, and a substantially similar Relocation Agreement on October 4, 2010. See Def. Mot. Dismiss, Ex. 2 [Dkt. 16-2] (Maxon Offer Letter); id., Ex. 4 [Dkt. 16-4] (Maxon Relocation Agreement). Mr. Maxon accepted Satory's offer to work as an "Associate II" at a monthly salary of $11, 250, plus benefits, Maxon Offer Letter at 2, and he was offered $10, 000 in relocation expenses, Maxon Relocation Agreement at 1. His initial role was to be "SharePoint Solutions Architect, " although the Offer Letter also included a non-exhaustive list of possible "[s]pecific assignments." Id. at 1. As with Mr. Robin, both Mr. Maxon's Offer Letter and Relocation Agreement stated that his employment would be at will. Id. at 2, Maxon Relocation Agreement at 1.
B. I&T Lab and Lab Migration
Instead of working as a SharePoint Administrator when he arrived, Mr. Robin was assigned by his supervisor, Joaquin Jesus Rosario, to "rebuild an existing development lab, " called the DevLab. Compl. § 20. A development lab is "a computer environment in which contractors and DOJ personnel are able to test new software in a safe environment... without worrying about interfering with ongoing operations." Id. Mr. Robin completed the DevLab project in about three weeks. Id. § 22. He was then assigned by Anne Isaacs, CEO, Founder, and Managing Partner of Satory, "to migrate the existing DOJ Integration & Test [I&T'] Lab" from another contracting firm in Alexandria, Virginia, to 2Con (the "Lab Migration Project"). Id. §§ 13, 23. Mr. Robin was "frustrated with the menial work he was assigned" and displeased that he was not working as a SharePoint Administrator, and he complained to his recruiter at Global IT Resources and to Mr. Rosario. Id. §§ 25-26.
Mr. Robin worked on the Lab Migration project in October 2010. In doing so, he "became aware of Satory practices that he considered to be unethical, " such as Mr. Rosario's instruction that Mr. Robin "not... meet with any DOJ personnel or other contractors without one of Satory management present, " even though Mr. Robin needed to contact those persons to complete the Lab Migration Project. Id. § 27. Satory employees gave Mr. Maxon "the same instructions." Id. Mr. Rosario's "instruction made [Mr.] Robin's job as Project Manager for the migration of the I&T Lab to the 2Con building difficult, costly and inefficient, " and DOJ personnel and other contractors, frustrated with Mr. Rosario's "lack of competence, " began contacting Mr. Robin for help directly. Id. §§ 28-29.
Mr. Rosario then "told [Mr.] Robin that Satory wanted to make sure that two servers in the Lab were configured so as to be dedicated to Satory, even though they were DOJ property and needed to be used by all contractors." Id. § 30. Mr. Robin objected because doing so "would be configuring a gateway into the I&T Lab and the 2Con lab, which would pose time-consuming obstacles to shared usage... waste money, alienate other contractors, and benefit Satory with control of all lab projects to the financial detriment of DOJ." Id. According to Plaintiffs, Mr. Rosario gave this direction "because under the DOJ Contract, a task order could be awarded without competition only if it met one of four exceptions, " including that "only one contractor can provide services, " and Mr. Rosario "hoped to position Satory to receive no-competition task orders." Id. Mr. Robin completed the Lab Migration Project on November 6, 2010. Id. § 31. A DOJ representative, Christopher Greer, then asked Satory to take over Lab Management for DOJ from another contractor and requested that Mr. Robin become Lab Manager. Id. § 32. Satory was required to prepare a Lab Manager job description. Although Ms. Isaacs originally assigned a different Satory employee to define the Lab Manager job description, that person was unable to complete the task and was replaced by Mr. Robin. Id. §§ 33-34.
C. Off-Contract Work at DOJ Facilities
According to Plaintiffs, in October 2010, Ms. Isaacs invited a Microsoft contractor, Carol Corneby, to meet with Satory at 2Con to "create a business proposal for Satory to present to Microsoft, " notwithstanding that Ms. Corneby "had no business with DOJ and was not working on the DOJ Contract." Compl. § 35. Satory personnel-including "Craig Foote, Ivory Banks, [Brian] Seitz, Barry Hartzberg, Anne Isaacs, Mary Egesdal, Silvana Nani, [Mr.] Rosario, [Jeff] Webb, and [Mr.] Robin"-and Ms. Corneby formed a "Working Group" that "worked for 10 hours a day, including weekends, for four to six weeks." Id. §§ 36-37. The Working Group's goal was to create "a proposal and presentation to present to Microsoft in the hopes that Microsoft would recommend Satory to Viacom and Iron Mountain as Microsoft Partners capable of delivering a quality Records Management solution." Id. Even though they were "actively involved almost every day in the private Satory corporate business development effort during normal business hours, " the Working Group "billed 40 hours to the DOJ contract every week" through October, November, and December. Id. When Messrs. Maxon, Robin, and Seitz and Ms. Corneby "asked whether it was appropriate to be conducting private corporate Satory business in government facilities and using government resources, power, materials, and email, " Ms. Isaacs "instructed [them] to keep working and not worry about it." Id. The collaboration among Ms. Corneby and the Satory personnel ended when Ms. Isaacs "tried to usurp" Ms. Corneby's "propriet[ary] solution" and present it to Microsoft herself. Id. § 38.
Plaintiffs allege that Satory worked on other Satory corporate projects while using DOJ resources, on DOJ property. According to Plaintiffs, Satory "worked on a huge initiative to build the Satory Corporate Cloud Architecture and SharePoint Internet & Intranet Portal while working at DOJ's 2Con building and using DOJ's facilities, power, phones and resources." Id. § 39. This initiative involved "most everyone employed by Satory at the DOJ Site" throughout "[m]ost of every day from December  through at least March of 2011." Id. Messrs. Maxon, Webb, and Rosario, along with Craig Foote, Amol Kaikini, Ivory Banks, and Mary Egesdal led these efforts, although Messrs. Maxon, Seitz, and Robin, as well as Ms. Corneby, "spoke up to question this behavior." Id. §§ 39-40.
Satory also allegedly treated DOJ's 2Con building as its corporate headquarters, including by: (1) "install[ing] a private internet wireless broadband network;" (2) having its Staffing Director, Betty Lauricia, work in a DOJ cubicle exclusively doing "Satory corporate business;" (3) conducting "employee performance reviews and health insurance briefings... in DOJ conference rooms using DOJ projectors and white boards, phones, and other resources;" and (4) arranging for "outside vendors to come onsite at DOJ's 2Con building to make presentations to Satory staff on Satory business matters not related to DOJ or the government in any way." Id. §§ 41-44. Plaintiffs also aver that Barry Hartzberg, a Satory Partner and COO, "came into DOJ['s] 2Con building and conducted nothing but Satory corporate business, " for "almost 20 hours a week." Id. § 43. According to Plaintiffs, no other contracting firm used DOJ resources in this manner.
D. Mr. Robin's December 2010 Meeting; January 2011 Events
Mr. Robin completed configuring the 2Con Lab on December 6, 2010. Compl. § 46. On December 23, 2010, Messrs. Rosario, Hartzberg, and Ryan Elliott of Satory conducted an "informal performance review" for Mr. Robin. Id. § 47. Mr. Robin "was told that they were very happy with his work ethic, the job he was doing, and the quality of his work, " and he received a "$1, 000 performance bonus and a $5, 000 bonus in advance for the upcoming six months." Id. Mr. Robin again asked to work as the SharePoint Administrator, as he believed he had been offered when accepting employment with Satory, but at the request of DOJ, Mr. Robin agreed to serve as Lab Manager instead for the "short term." Id. §§ 48-49.
Mr. Robin then set out to "creat[e] a Virtual Lab Team of [Subject Matter Experts] who would work together to re-organize and architect the [DevLab]." Id. § 50. Mr. Rosario again interfered, proposing that Mr. Rosario himself serve as Lab Manager or that Mr. Robin configure the DevLab in such a way that it would give Satory exclusive control over access. Id. Mr. Robin objected, telling Mr. Rosario and other Satory personnel "that DOJ Leadership and all [Subject Matter Experts] should be involved in the Governance, Process, and Access to the Lab" and that he was concerned that "Satory was trying to rig the game' by defining how Projects would flow through the DOJ Lab." Id. § 51. This concerned Mr. Robin because "[c]onventional architecture" would require a Lab Manager to "define, implement, maintain and support the Governance' of the DOJ Labs by building a Virtual Lab Team of all the [Subject Matter Experts] from all Cont[r]acting Firms with DOJ ESS/ID" so that the entire team would supervise access to the DevLab. Id. § 52. The manner in which Mr. Rosario directed Mr. Robin to design the DevLab positioned Satory to "[b]e the first contracting company aware of any new projects or head count needs coming down the line;" "[m]ake it impossible for any other contracting company to be successful in any project without Satory, " thereby allowing Satory to bill DOJ for project management work; "[c]ontrol all project manager tools and the SharePoint Team" as "gatekeeper and governance board;" and "attach billable hours to all documentation, communication, and collaboration efforts at DOJ ESS/ID." Id. § 60.
Mr. Robin expressed his concerns to Mr. Rosario on January 11, 2011, which led to a "short but heated" conversation. Id. §§ 53-54. Mr. Robin also sent an e-mail to upper Satory management, stating in part that "DOJ Leadership [should] be made aware of Satory's proposal for controlling access to the DOJ Lab." Id. § 55. This angered Mr. Rosario, who "berated" Mr. Robin for the e-mail. Id.
On January 12, 2011, Mr. Robin met with Messrs. Rosario and Elliott, again expressing his concerns about the way in which he was being directed to administer the DevLab, which would give Satory "a significant unfair advantage over any other contracting firm at DOJ in delivering projects faster, with higher quality, and more [efficiency] than other contracting firms" and would allow Satory to "bill more hours for DOJ work than actually was needed." Id. §§ 56-58. Messrs. Rosario and Elliott "refused to address [Mr.] Robin's concerns, " which led Mr. Robin to inform them that Mr. Rosario "had instructed him to make sure that the Dell R710 servers currently in the DevLab and owned by the DOJ were to be configured so that only Satory could use them" and that "[Mr.] Rosario had configured another DOJ server that formerly belonged to the I&T Lab to serve only Satory." Id. § 59. Mr. Rosario "yelled and cursed at [Mr.] Robin and left." Id. Mr. Robin sent Messrs. Rosario and Elliott an e-mail "hoping to work things out... but objecting to being cursed for his opinions;" neither responded. Id. § 61.
E. Retaliation Allegations
After the meeting on January 12, 2011, Satory removed Mr. Robin from his position as Lab Manager, directed him to work from home, instructed others not to contact him, and "did not assign him any new work." Id. § 62. On January 13, 2011, Mr. Robin sent CEO Isaacs an e-mail "repeating the concerns he had expressed to others." Id. § 63. Mr. Robin attended a meeting with Ms. Isaacs and Peg Gamse, a human resources representative, on January 20, 2011, in which he "informed them that Satory was being unethical in attempting to game' the system of governance of the labs;" they responded by "accus[ing] him of being at fault." Id. § 64. After the meeting, Mr. Maxon officially replaced Mr. Robin as Lab Manager. Id. § 65. Mr. Robin was offered a written separation agreement on March 17, 2011 worth $28, 141, including cash payment of $9, 000. Id. § 69. The proposed separation agreement included a confidentiality provision and had a deadline for acceptance of April 8, 2011. Id. §§ 69, 73. Mr. Robin was terminated on March 17, 2011, and he did not accept the separation agreement, although "[s]everal Satory personnel communicated with him repeatedly from April 8 to April 12 trying to get him to respond." Id. § 73.
On March 8, 2011, Mr. Maxon, who "had complained to supervisors about conducting corporate work on DOJ property and with DOJ resources" and "incompetent management of the DOJ project and inefficiencies [in] performing the DOJ work, " resigned "because of the abusive conduct he saw at Satory." Id. § 68.
F. Procedural History
Plaintiffs filed their Complaint under seal on April 22, 2011. The Complaint consists of seven counts, including four under the False Claims Act ("FCA"), 31 U.S.C. §§ 3729-33. Plaintiffs' claims are: presentation of false claims in violation of 31 U.S.C. § 3729(a)(1)(A) (Counts I and II), use of false statements and records in violation of 31 U.S.C. § 3729(a)(1)(B) (Count III), FCA retaliation in violation of 31 U.S.C. § 3730(h) (Count IV), wrongful termination under D.C. law (Count V), breach of employment contract under D.C. law (Count VI), and punitive damages (Count VII). From April 22, 2011, until October 19, 2012, this case remained under seal while the United States investigated Plaintiffs' allegations and determined whether it would intervene. Once the United States filed notice that it declined to intervene, see Dkt. 12, the Complaint was unsealed and served ...