Bailets v. Pennsylvania Turnpike Commission

[J-13-2015]

IN THE SUPREME COURT OF PENNSYLVANIA

MIDDLE DISTRICT

SAYLOR, C.J., EAKIN, BAER, TODD, STEVENS, JJ.

RALPH M. BAILETS, : No. 12 MAP 2014

:

Appellant : Appeal from the order of the

: Commonwealth Court at No. 265 MD 2009

: dated February 4, 2014.

v. :

: ARGUED: March 11, 2015

:

PENNSYLVANIA TURNPIKE :

COMMISSION, ANTHONY Q. MAUN, :

(DIRECTOR OF ACCOUNTING), AND :

NIKOLAUS H. GRIESHABER, (CHIEF :

FINANCIAL OFFICER), :

:

Appellees :

OPINION

MR. JUSTICE EAKIN DECIDED: August 31, 2015

In this appeal, we consider the Commonwealth Court’s decision to grant summary

judgment and deny relief under the Whistleblower Law, 43 P.S. §§ 1421-1428.1 We

reverse and remand for further proceedings.

For purposes of a summary judgment motion, the record includes the pleadings,

depositions, answers to interrogatories, admissions, and affidavits. Pa.R.C.P.

1035.1(1), (2). The record here shows appellant Ralph Bailets was employed by the

Pennsylvania Turnpike Commission from 1998 to 2008. Appellant achieved

1 Act of December 12, 1986, P.L. 1559, No. 169, § 1.

“outstanding” and “commendable” performance ratings while employed as the

Commission’s manager of financial reporting and systems. Appellant’s Brief in

Opposition to Appellees’ Motion for Summary Judgment, at 30 n. 69. During this time,

appellant frequently complained that he observed improprieties and wasteful practices

regarding various matters, including a Commission computer systems contract with

Ciber, Inc., EZPass discounts, politically motivated personnel actions, and the use of

multiple, unnecessary external investment managers. Appellant’s job title and

responsibilities were changed in June, 2008, he was removed from an additional position

as assistant secretary-treasurer around the same time, and his employment by the

Commission was ultimately terminated in November, 2008.

Believing these adverse employment actions were retaliation for his reports of

wrongdoing and waste at the Commission, appellant filed a complaint in the

Commonwealth Court’s original jurisdiction, alleging a single claim under the

Whistleblower Law, against the Commission; Anthony Q. Maun, the Commission’s

director of accounting; and Nikolaus H. Grieshaber, the Commission’s chief financial

officer (collectively, appellees). At relevant times, Maun was appellant’s supervisor at

the Commission, and Grieshaber was appellant’s co-worker, who later became

appellant’s superior.

Specifically, with regard to the Ciber computer systems contract, appellant alleged

he made numerous oral and written reports to Maun and Grieshaber about the politically

connected vendor’s improper access to insider information for a Request for Proposal

(RFP) for the creation of a computerized financial reporting system, which was not equally

available to other bidding vendors. Complaint, ¶ 12. In response to appellant’s criticism

of the selection process, Maun allegedly stated, “You should not say anything about it,”

and warned him not to “make any waves or your job will be in jeopardy.” Id., ¶ 10;

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Deposition of Ralph M. Bailets, 5/10/13, at 41, 48, 89-91, 97. Appellant further claimed

that, when Ciber was awarded a $62 million contract and began its work, he noted

deficiencies in performance and initiated a series of meetings with Maun to discuss the

problems, but there was no action in response to his complaints. Complaint, ¶¶ 13-16.

Appellant also informed Maun about deficiencies in experience and training by Ciber’s

consultants, and his concern that it appeared Ciber was angling to get another contract

for supplemental training, or “knowledge transfer.” Bailets Deposition, 7/24/13, at

303-04, 326; id., ¶ 19-20. Ciber did get another contract for knowledge transfer (valued

at an additional $20 million), and when appellant complained that the contracted-for

knowledge transfer never occurred, Maun reminded appellant he was jeopardizing his job

by criticizing Ciber. Bailets Deposition, 5/10/13, at 116-17; id., 7/24/13, at 191-94,

326-27, 420-24.

Appellant also talked with Grieshaber about his Ciber concerns and, according to

appellant, Grieshaber agreed with appellant, but told him to “tread lightly” with Ciber. Id.,

7/24/13, at 275. According to appellant, when Grieshaber was promoted to CFO, he

developed “amnesia” on the topic, their relationship changed, Grieshaber eventually

demoted appellant, and ultimately played a role in firing him. Id., 5/10/13, at 62-66,

88-89, 92-93, 104-06, 110-11. After his termination, appellant applied to the

Commission three times for open positions for which he was qualified, but there was no

response to his applications. Id., at 16-21; Complaint, ¶¶ 48-50.

During his time at the Commission, appellant also complained to Maun and

Grieshaber about a so-called “discounting scheme” engaged in by the largest EZPass

customers, which involved these large organizations getting deep discounts (20% of their

toll charges) and then acting as suppliers of the discounted transponders to smaller

organizations. Bailets Deposition, 5/10/13, at 147, 151; Deposition of Anthony Q. Maun,

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3/14/11, at 86, 90, 91. Appellant told Maun there was a resulting potential loss of millions

of dollars in toll revenue. Complaint, ¶¶ 30, 31, 34. In addition, appellant discussed

with Maun and Grieshaber his concerns about a policy by which Commissioners would

“create, post and fill” staff positions in a single executive session, in derogation of

competition and the regular merit selection process; appellant claims he and Grieshaber

noted various political appointees who were hired at the Commission in this manner. Id.,

¶ 35; Bailets Deposition, 7/24/13, at 202-03, 208. Relatedly, appellant discussed with

both Maun and Grieshaber the Commission’s use of too many politically connected

external investment managers for Commission treasury funds which, in appellant’s

opinion, was unnecessary and a waste of money. Complaint, ¶ 40; Bailets Deposition,

7/24/13, at 214-16, 223, 225, 240, 351, 413-15.

Appellees filed motions for summary judgment claiming appellant was fired from

the Commission along with 14 other individuals, not because he was a whistleblower, but

“in response to the poor economy, declining traffic and revenue numbers and in an

organization-wide effort to reduce expenses.” Appellees’ Memorandum of Law in

Support of Motion for Summary Judgment, at 2.

In an unreported, single-judge opinion, Senior Judge Friedman held the decision

to terminate appellant was “a management discretionary action, motivated by legitimate

employer objectives.” Bailets v. Pennsylvania Turnpike Comm’n., No. 265 MD 2009,

unpublished memorandum at 11 (Pa. Cmwlth. filed February 4, 2014). Specifically, the

court held the allegations regarding Grieshaber did not support a Whistleblower claim

because appellant did not report wrongdoing or waste to Grieshaber while he was his

supervisor. Id., at 7-8. With regard to Maun, the court determined there was no report

of “wrongdoing,” which it defined as wrongdoing by the employer or a violation of a law or

[J-13-2015] - 4

code of conduct the employer is charged to enforce for the good of the public. Id., at 8

(citing Sea v. Seif, 831 A.2d 1288, 1291 (Pa. Cmwlth. 2003)).

The court further held appellant’s claims he reported wrongdoing and waste at the

Commission were not supported by the record, and the claim regarding the “create, post,

and fill” practice was not a “good faith report” as required by the statute; the court found

appellant complained about this practice only when it affected him — when he was

unable to obtain a particular position in which he was interested because it was filled this

way. Id., at 9-10. The court concluded there were legitimate reasons for firing

appellant, and there was nothing in the record establishing the decision makers who

terminated his position were even aware of appellant’s reports of alleged wrongdoing and

waste; the evidence instead showed 15 positions were eliminated in November, 2008,

because of “a poor economy, declining traffic, and necessary expense reductions across

the Commission.” Id., at 11.

Appellant filed an appeal in this Court raising the following questions:

a. Did the court err in failing to consider and properly evaluate the

evidence in this case, including, but not limited to, the [p]resentment

handed down by the 33rd Statewide Investigative Grand Jury and

substantiated by a subsequent preliminary hearing and pending trial; the

fact that the second in command at the [Commission] (George Hatalowich)

invoked the Fifth Amendment when questioned about [appellant]’s

termination and other relevant facts; the fact that all [appellees] and the

CEO of the [Commission] showed consciousness of guilt by

misrepresenting material facts during their depositions when questioned

about political influence on [Commission] contracts and other relevant

matters; the fact that the third in command of the [Commission] at the

relevant time (Deborah Davis) provided a sworn [a]ffidavit supporting

[appellant] and particularly showing that [appellant]’s termination for

budgetary reasons was totally pretextual and supporting that [appellant]

was terminated for being critical of the Ciber contract alleged in his

[J-13-2015] - 5

[c]omplaint; and other facts which, when properly evaluated, should have

resulted in denial of [appellees]’ [s]ummary [j]udgment [m]otions?[2]

b. Did the lower [c]ourt err in holding that it was an undisputed fact in this

case that [appellant] had been terminated for non-pretextual valid reasons,

i.e., budgetary restraints due to a drop off in [Commission] revenues?

c. Did the [c]ourt err as a matter of law in holding that [appellee]

Grieshaber would be immune from Whistleblower [Law] liability if he was a

peer of [appellant] at the time [appellant] complained to his superiors about

the Ciber contract but then subsequently became [appellant]’s superior and

the person deciding to terminate him because of his Whistleblowing

activity?

d. Did the [c]ourt err as a matter of law in holding that because the

contracts with Ciber were fixed-rate contracts they could not involve waste

in violation of the Whistleblower [Law] and that [appellant] had failed to

report any wrongdoing under the Whistleblower [Law]?

e. Did the [c]ourt err as a matter of law in holding that under the facts of

this case, the granting of [s]ummary [j]udgment was clear and free from

doubt?

Appellant’s Brief, at 2-3.

Summary judgment is proper only where there is no genuine issue concerning any

material fact and the moving party is entitled to judgment as a matter of law. Karoly v.

2 We do not reach the first sub-issue contained in this claim, which relates to the

presentment of the 33rd \Statewide Investigating Grand Jury. The investigation —

during which appellant testified along with hundreds of others — resulted in corruption

charges against several individuals, including Commission officials Mitchell Rubin,

George Hatalowich, and Joseph Brimmeier, as well as Ciber’s David Miller, and resulted

in various guilty pleas. See “8 charged in alleged turnpike corruption,” Brad Bumsted

and Tom Fontaine,

http://triblive.com/news/adminpage/3652326-74/turnpike-former-brimmeier#axzz3cgXrD

FCD (retrieved June 10, 2015); “Turnpike Prosecutions End with Convictions But No Jail

Time,”

http://pittsburgh.cbslocal.com/2014/11/21/turnpike-prosecutions-end-with-convictions-bu

t-no-jail-time/ (retrieved June 10, 2015); see also “How Whistleblowers uncovered a

‘pay-to-play’ culture in the Pennsylvania Turnpike,” http://pennlive.com, 11/6/13. While

the presentments may indicate at least some of appellant’s complaints were well

founded, appellees herein were not indicted.

[J-13-2015] - 6

Mancuso, 65 A.3d 301, 308-09 (Pa. 2013); see also Pa.R.C.P. 1035.2(2) (summary

judgment proper if, after completion of discovery relevant to motion, adverse party who

would bear burden of proof at trial fails to produce evidence of facts essential to cause of

action or defense which in jury trial would require issues to be submitted to jury). In

considering a motion for summary judgment, the record must be viewed in the light most

favorable to the non-moving party, and all doubts as to whether a genuine issue exists are

resolved against the moving party. Karoly, at 309. The record for purposes of deciding

a motion for summary judgment includes the pleadings, depositions, answers to

interrogatories, admissions, and affidavits, Pa.R.C.P. 1035.1(1), (2), but oral testimony

alone, of the moving party or his witnesses, i.e., affidavits or depositions, even if

uncontradicted, is generally insufficient to establish the absence of a genuine issue of

material fact, see id., 1035.2 note (citing Penn Center House, Inc. v. Hoffman, 553 A.2d

900 (Pa. 1989); Borough of Nanty-Glo v. Am. Sur. Co. of New York, 163 A. 523 (Pa.

1932)). Moreover, “[t]he questions of whether there are material facts in issue and

whether the moving party is entitled to summary judgment are matters of law.”

Alderwoods (Pennsylvania), Inc. v. Duquesne Light Co., 106 A.3d 27, 34 n.5 (Pa. 2014)

(citations omitted). Finally, our scope of review of questions of law is de novo, and we

need not defer to the lower court’s determinations. Summers v. Certainteed Corp., 997

A.2d 1152, 1159 (Pa. 2010) (citation omitted).

Appellant argues the Commonwealth Court “totally ignored numerous items of

probative evidence,” including a grand jury presentment which resulted in criminal

charges against several individuals arising out of Ciber’s contract with the Commission,

and the fact that Commission chief operating officer George Hatalowich asserted his Fifth

[J-13-2015] - 7

Amendment right to silence when specifically asked about appellant’s termination during

his deposition; appellant notes such an invocation supports an adverse inference in a civil

case. Appellant’s Brief, at 40-41 (citing RAD Services, Inc. v. Aetna Cas. and Sur. Co.,

808 F.2d 271 (3d Cir. 1986)); see also Deposition of George Hatalowich, 1/25/12, 5-14.

According to appellant, the court also ignored sworn evidence the Ciber contract was the

product of illegal corruption, Commission employees critical of the contract were being

systematically terminated, and the terminations were “unprecedented and pretextual.”

Appellant’s Brief, at 43 (citing Affidavit of Deb Davis, Appellant’s Brief in Opposition to

Appellees’ Motion for Summary Judgment, Exhibit 7). Appellant asserts the evidence he

presented below, when viewed properly in the light most favorable to him, established a

prima facie violation of the Whistleblower Law and warranted additional proceedings in

the trial court.

Appellant further contends the lower court erred when it held that, even if he

established a prima facie case, appellees met their burden to prove a legitimate purpose

for terminating him, and they “would have taken the same adverse employment action

absent [appellant’s] good-faith report of wrongdoing.” Appellant’s Brief at 44 (quoting

O’Rourke v. Dep’t. of Corr., 778 A.2d 1194, 1204 (Pa. 2001)). Appellant argues the

evidence he presented, when properly viewed, supports the inference the 2008

Commission layoffs, allegedly made for budgetary reasons, were actually intended to

remove employees critical of the corrupt Ciber contract. Appellant also claims the trial

court erred in holding his reports to Grieshaber could not support Whistleblower Law

liability because Grieshaber was not his supervisor at the time; appellant argues a plain

[J-13-2015] - 8

reading of the statute does not require the superior initiating the adverse employment

action (Grieshaber) be the same superior to whom the report was initially made (Maun).

In addition, appellant asserts the trial court erred when it held the Ciber contracts

could not constitute “waste” in violation of the Whistleblower Law because they were

fixed-rate contracts. Appellant notes the Commission was “vigorously advancing a ‘no

waste’ argument in this case while keeping secret its own commissioned report”

indicating the Ciber contract did indeed involve waste of $45 million. Appellant’s Brief, at

55.3 Appellant further argues his reports included instances of “wrongdoing” as required

by the Whistleblower Law. Appellant’s Brief, at 53. Appellant insists this case is not

clear and free from doubt, and as a result, summary judgment was erroneously granted.

See, e.g., Fine v. Checcio, 870 A.2d 850, 857 (Pa. 2005) (court may grant summary

judgment only where right to such judgment is clear and free from doubt).

In their brief — filed prior to the Commission’s recent admission the Ciber contract

involved “waste” — appellees claim appellant cannot prove, by a preponderance of the

evidence, he “reported or was about to report in good faith, verbally or in writing, an

instance of wrongdoing or waste to the employer or an appropriate authority.” Appellees’

Brief, at 31-32, 41 (quoting 43 P.S. § 1424(b)). Appellees emphasize “wrongdoing”

means the violation of a statute, regulation, other law the employer is “charged to enforce

for the good of the public[,] or [one] dealing with the internal administration of the

governmental employer in question.” Id., at 32 (quoting Gray v. Hafer, 651 A.2d 221,

224 (Pa. Cmwlth. 1994), aff’d per curiam, 669 A.2d 335 (Pa. 1995)). Appellees assert

3 On April 28, 2015, this Court granted appellees’ application for leave to file a

post-submission communication indicating the Commission has changed its position on

this issue, and has admitted, in its own lawsuit against Ciber, the Ciber contracts “did

involve waste in violation of the Whistleblower Law.” Application for Leave to File

Post-Submission Communication, ¶ 6.

[J-13-2015] - 9

“wrongdoing” does not include potential or possible violations, but only actual violations.

Appellees’ Brief, at 32 (citing Morgan v. Rossi, 1998 W.L. 175604, at *8 (E.D. Pa. April 15,

1998)). Appellees argue appellant never identified or reported the violation of an actual

law or regulation, beyond his vague reference to the Federal Acquisition Regulations

(FAR), or general industry standards and good practices. Appellees further argue the

general ethics policy set forth in the Commonwealth Procurement Code cannot support a

claim under the Whistleblower Law. See 62 Pa.C.S. § 2301 (setting forth

Commonwealth policy to promote and balance objectives of protecting government

integrity and facilitating recruitment and retention of personnel; public employees to

discharge duties impartially to assure fair competitive access to agency procurement by

responsible contractors, to foster public confidence in integrity of Commonwealth

procurement process).

Appellees assert appellant never established a causal connection between his

reports of alleged wrongdoing and waste and his termination, and without such proof he

cannot prevail on a Whistleblower claim. See Golaschevsky v. Dep’t of Envtl. Prot., 720

A.2d 757, 759 (Pa. 1998) (Whistleblower Law plaintiff must show by “concrete facts” or

surrounding circumstances his report of wrongdoing led to his dismissal). Appellees

state the temporal distance between appellant’s reports (March and October of 2007) and

his termination in November, 2008 undermine such a causal connection. Even taking

into account evidence appellant argues the lower court ignored, such as the grand jury

presentment, Hatalowich’s invocation of the Fifth Amendment, and the Davis affidavit,

which may not be admissible for the truth of its contents at trial, 4 appellees claim

appellant still cannot prove his case by a preponderance of evidence. Appellees also

4 See generally Pa.R.C.P. 1035.4 (supporting and opposing affidavits shall be made on

personal knowledge, set forth such facts as would be admissible in evidence, and show

affirmatively that signer is competent to testify to matters stated therein).

[J-13-2015] - 10

assert there is no evidence the decision makers who actually fired appellant were aware

of his reports of wrongdoing.

Finally, appellees argue appellant has not shown he is entitled to relief on the basis

of his other reports of alleged wrongdoing and waste: the EZPass discount scheme, the

use of multiple investment managers, and improper hiring practices. In any event,

appellees argue, even if appellant could show a prima facie case of liability, the lower

court properly found it was rebutted by a separate, legitimate, and non-pretextual reason

for firing him. See 43 Pa.C.S. § 1424(c) (proof by preponderance of evidence that

termination occurred for separate and legitimate non-pretextual reasons shall be defense

to action); O’Rourke, at 1204 (employer may rebut prima facie case by showing it would

have taken same action absent employee’s reports). Appellees argue they proved

appellant was fired for legitimate budgetary reasons.

Appellant filed a reply brief to reiterate there are genuine issues of material fact

that should have precluded summary judgment. He focuses on his own extensive

deposition testimony regarding appellees’ frequent and candid discussion of the political

influence on the Commission’s hiring and contracting decisions, and appellees’

conflicting testimony on this point. Appellant’s Reply Brief, at 3. According to appellant,

these factual disputes based on oral testimony may not be resolved on summary

judgment. Id., at 3-4 (citing Nanty-Glo, supra). Appellant contends his additional

evidence regarding his complaints about the Commission’s endorsement of EZPass

reseller discounts, its unnecessary use of multiple investment managers, and the

continued hiring of unqualified patronage appointees undermines the pretextual position

that he was fired for budgetary reasons.

As the parties’ disparate takes on the record and the interpretations they draw from

it suggest, there are disputed issues of material fact that, when viewed in the light most

[J-13-2015] - 11

favorable to appellant as the non-moving party, should have precluded summary

judgment in favor of appellees. See, e.g., Alderwoods, at 34 n.5 (citing Smith v.

Township of Richmond, 82 A.3d 407, 414-15 (Pa. 2013)). Whether the record would

support a verdict or not, it is sufficient to preclude summary judgment.

The Whistleblower Law provides protection for employees of a public employer

who report a violation or suspected violation of state law. See 43 P.S. § 1421, Historical

and Statutory Notes (“An Act providing protection for employees who report a violation or

suspected violation of State, local or Federal law; providing protection for employees who

participate in hearings, investigations, legislative inquiries or court actions; and

prescribing remedies and penalties.”). The statute defines a “whistleblower” as “[a]

person who witnesses or has evidence of wrongdoing or waste while employed and who

makes a good faith report of the wrongdoing or waste, verbally or in writing, to one of the

person’s superiors, to an agent of the employer or to an appropriate authority.” Id., §

1422. The term “employer” is defined as “a public body,” and includes an individual “who

receives money from a public body to perform work or provide services relative to the

performance of work for or the provision of services to a public body.” Id. And, a “public

body” includes “[a] State officer, agency, department, division, bureau, board,

commission, council, authority or other body in the executive branch of State

government,” or “[a]ny other body which is created by Commonwealth or political

subdivision authority or which is funded in any amount by or through Commonwealth or

political subdivision authority or a member or employee of that body.” Id.5 The term

5 The Commission is “an instrumentality of the Commonwealth” that consists of five

members; the Secretary of Transportation serves as an ex officio member, and the

remaining four members of the Commission are appointed by the Governor of

Pennsylvania, by and with the advice and consent of two-thirds of the Senate. 36 P.S. §

652d.

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“waste” is defined as “[a]n employer’s conduct or omissions which result in substantial

abuse, misuse, destruction or loss of funds or resources belonging to or derived from

Commonwealth or political subdivision sources.” 43 P.S. § 1422.

The Whistleblower Law expressly prohibits an employer from retaliating against an

employee because of that employee’s report of wrongdoing or waste by the employer,

and an employee alleging a violation may bring a civil action for injunctive relief, or

damages, or both. Id., § 1423(a). An employee alleging a violation of the

Whistleblower Law must show, by a preponderance of the evidence, that prior to the

adverse employment action, the employee reported in good faith, verbally or in writing, an

instance of wrongdoing or waste to the employer or an appropriate authority. Id., §

1424(b). An employer may defend such an action by showing, by a preponderance of

the evidence, its action against the employee “occurred for separate and legitimate

reasons, which are not merely pretextual.” Id., § 1424(c).

Thus, in order to obtain relief on his Whistleblower Law action against the

Commission, appellant must establish he made verbal or written reports of wrongdoing or

waste by the Commission to his superior or another agent of the employer, and that he

was fired due to these reports. Appellant need only demonstrate these facts by a

preponderance of the evidence. Appellant therefore has to “show by concrete facts or

surrounding circumstances that the report [of wrongdoing or waste] led to his dismissal,

such as that there was specific direction or information he received not to file the report or

there would be adverse consequences because the report was filed.” Gray, at 225; see

also Golaschevsky, at 759.

Viewing the record in the light most favorable to appellant, there is sufficient record

evidence that Maun and Grieshaber admonished him not to report his observations about

the Ciber contract, or his job would be in jeopardy. Bailets Deposition, 5/10/13, at 89-91,

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97. There is evidence appellant made complaints to Grieshaber during the time the two

men were co-workers, before Grieshaber was promoted to CFO, and Grieshaber warned

appellant to be careful regarding Ciber because Ciber was politically connected. Id.,

7/24/13, at 274-76. Appellant testified he continued talking to Maun about Ciber up to

the week he was fired, even if his email correspondence on the topic had subsided by

then. Id., at 189-90. Moreover, despite the Commonwealth Court’s determination the

fixed-rate Ciber contracts criticized by appellant could not involve waste, appellees have

now supplemented the record to include the Commission’s admission those contracts

“did involve waste in violation of the Whistleblower Law.” Application for Leave to File

Post-Submission Communication, ¶ 6. In any event, it seems apparent that a fixed-price

contract can involve waste for at least two reasons. First, the contract price may be

artificially inflated for a politically-connected vendor who need not compete on a level

playing field or worry that its wasteful practices will be challenged by the procuring

agency. Second, if the fixed-price contract includes an item (such as knowledge

transfer) which then becomes the subject of a supplemental contract, the price of the

supplemental contract constitutes waste. Appellant’s reports implicated both of these

ways in which waste was allegedly occurring.

The record also indicates appellant made reports of wrongdoing, which is defined

to include a violation of a state or federal statute or regulation. See 43 Pa.C.S. § 1422.

Contrary to the Commonwealth Court’s conclusion appellant “cannot point to” such a

violation, Bailets, at 8, the reports identified that appellees implemented a procurement

process which unfairly advantaged a vendor with inside information. If true, this would

constitute a violation of Pennsylvania’s Procurement Code. See 62 Pa.C.S. § 2301

(requiring that “public employees discharge their duties impartially so as to assure fair

competitive access to Commonwealth agency procurement by responsible contractors

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and that they conduct themselves in a manner that fosters public confidence in the

integrity of the Commonwealth procurement process”).6

It is true Maun and Grieshaber presented conflicting evidence in their own

deposition testimony. The record also indicates at least a factual dispute with regard to a

causal connection between appellant’s reports and his subsequent termination,

particularly when considering the period of time between appellant’s earliest complaints

and his actual termination date. Maun Deposition, 3/14/11, at 33-34; Deposition of

Nikolaus H. Grieshaber, 6/24/11, at 66. However, viewing the evidence in the light most

favorable to appellant, it is clear he adduced sufficient evidence of reports of waste to a

direct supervisor, and to a co-worker who later became CFO, to withstand a motion for

summary judgment. Though appellant may not have presented “concrete evidence”

regarding the precise manner in which his complaints may have made their way up the

chain of command, appellant did provide evidence of “surrounding circumstances”

regarding the knowledge and warnings of Maun and Grieshaber, both of whom

subsequently had authority to make recommendations to the Commission regarding

appellant’s future employment status. See Golaschevsky, at 759; Gray, at 225. The

record here is readily distinguishable from a situation where there is “not even an

innuendo of any nexus between” an employee’s report of waste and his termination, such

that a Whistleblower claim must fail as a matter of law. See Lutz v. Springettsbury

Township, 667 A.2d 251, 254 (Pa. Cmwlth. 1995).

Although appellees make much of the fact appellant’s reports of wrongdoing to

Grieshaber occurred while the two men were peers, before Grieshaber became CFO, we

do not consider this circumstance dispositive. The reports to Grieshaber were made to

6 Although § 2301 is primarily a legislative policy statement, it also contains a mandate as

reflected in the portion quoted above.

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“an agent” of the employer, or an “agent” of the public body (i.e., the Commission), both of

which are included as the proper recipient of a report as required under the Whistleblower

Law. 43 P.S. § 1422; see also Rankin v. City of Philadelphia, 963 F.Supp. 463 (E.D. Pa.

1997) (city employees could not avoid liability under Whistleblower Law by claiming they

were not “employers” of whistleblower plaintiff; any person who is “an agent of a public

body” is “employer” under law).

Thus, it is clear appellant presented prima facie evidence of violations of the

Whistleblower Law, which at the very least created issues of material fact to preclude the

grant of summary judgment. 7 In rebuttal, appellees presented evidence regarding

“budget cuts” and “budgetary reasons” which caused appellant’s dismissal. Appellees’

Motion for Summary Judgment, Exhibit K, Letter from George Hatalowich, 11/7/08; id.,

Exhibit M, Letter from Patricia F. Schlegel, 11/20/08; Maun Deposition, 3/14/11, at 18. In

turn, appellant presented conflicting evidence the budgetary excuse was a mere pretext:

Commission revenues were actually rising during this period of time, other employees

were given raises, new individuals were hired to fill new positions after appellant was

ostensibly fired for budgetary reasons, and the Commission had not yet even completed

7 This is so even without consideration of the evidence of Commission corruption

contained in the Grand Jury presentment, attached by appellant to his brief in opposition

to the motion for summary judgment. We therefore need not decide the question of

admissibility of the presentment at this juncture. Nor is it necessary to consider

Hatalowich’s invocation of the Fifth Amendment during his deposition in the present

matter in order to reach our conclusion here. According to appellant, the Commonwealth

Court improperly ignored this additional support for his position, and we note appellant is

correct that the evidence is relevant and admissible in this civil case. See Baxter v.

Palmigiano, 425 U.S. 308, 319 (1976) (observing that, in non-criminal setting, refusal to

answer question regarding potential criminality is relevant fact that may be considered in

interest of “improv[ing] the chances for accurate decisions”); see also RAD Services, at

275 (acknowledging that, in civil proceeding, evidence of person’s refusal to testify may

be considered by trier of fact).

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a new budget by November, 2008. Appellant’s Brief in Opposition to Appellees’ Motion

for Summary Judgment, Exhibit 5, Gross Toll Revenue by Class and Method; id., Exhibit

7, Affidavit of D. Davis, ¶¶ 10-17; Maun Deposition, 3/14/11, at 79-80; Grieshaber

Deposition, 6/24/11, at 82. The record thus presents evidence creating material issues

of disputed fact regarding whether appellant was fired because of his complaints to Maun

and Grieshaber about waste and wrongdoing at the Commission; appellant was not

required to resolve these disputes, which turn in some instances on the credibility of

witnesses, at the summary judgment phase. However, the Commonwealth Court

decided the issue of pretext in favor of appellees, which was error. See Alderwoods, at

41 (evidence presented by defendant seeking summary judgment conflicted with

plaintiff’s evidence; in light of such conflict, movant cannot merely rest upon recitations of

evidence supportive of its own position, since such differences present questions for

finder of fact and not judge attending to summary judgment motion).

We hold there remain genuine issues of material fact surrounding the reasons for

appellant’s termination and its connection to his reports of improper activity at the

Commission. Thus, the Commonwealth Court erred in granting summary judgment in

favor of appellees. We therefore vacate the judgment, reverse the Commonwealth

Court’s decision, and remand to that court for further proceedings consistent with this

opinion.

Reversed and remanded. Jurisdiction relinquished.

Mr. Chief Justice Saylor, Mr. Justice Baer, Madame Justice Todd and Mr. Justice

Stevens join the opinion.

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