United States Ex Rel. Uhlig v. Fluor Corp.

In the

United States Court of Appeals

For the Seventh Circuit

____________________

No. 14-2815

UNITED STATES ex rel. ERIC UHLIG,

Plaintiff-Appellant,

v.

FLUOR CORP., et al.,

Defendants-Appellees.

____________________

Appeal from the United States District Court for the

Central District of Illinois.

No. 4:11-cv-04009 — Michael M. Mihm, Judge.

____________________

ARGUED SEPTEMBER 8, 2016 — DECIDED OCTOBER 11, 2016

____________________

Before FLAUM, ROVNER, and SYKES, Circuit Judges.

FLAUM, Circuit Judge. Eric Uhlig brought False Claims Act

and retaliation claims against his former employer, Fluor Cor-

poration, and related entities (collectively, “Fluor”). Fluor

contracted with the United States Army to provide, among

other services, electrical engineering work in Afghanistan.

Uhlig says Fluor violated the False Claims Act when it

knowingly breached the terms of its Army contract by using

2 No. 14-2815

unlicensed electricians as journeymen and billing the govern-

ment for the services. Uhlig also contends Fluor wrongfully

terminated Uhlig as a whistleblower in violation of 31

U.S.C. § 3730(h).

The district court granted summary judgment for Fluor.

We affirm.

I. Background

The United States Army uses umbrella agreements known

as “indefinite delivery, indefinite quantity” (“IDIQ”) con-

tracts with private companies to provide support for military

personnel. IDIQ contracts provide the general terms under

which a contractor is to work but do not delineate specific

conditions. The Army then uses “Task Orders” to assign jobs

to a contractor.

In 2007, the Army and Fluor entered into an IDIQ contract

known as Logistics Civil Augmentation Program IV

(“LOGCAP IV”). LOGCAP IV provided a framework for con-

struction, maintenance, and other services in support of mili-

tary personnel around the world.

LOGCAP IV originally contained no specific provisions

governing personnel qualifications. In August 2008, the Army

issued LOGCAP IV Contract Modification 4, which provided:

The Contractor shall ensure that Contractor per-

sonnel … possess a license, certification, train-

ing, and/or education commensurate with the

level of duties to which they are assigned.

… Contractor will comply with the terms of this

provision if Contractor develops and reasona-

No. 14-2815 3

bly implements a Trades Certification and Vali-

dation Plan, as approved by the Government,

utilizing the master, journeyman, or apprentice

model.

Fluor submitted a Trades Certification and Validation Plan

as required by Modification 4. The Plan divided craft workers

into four categories using “a combination of licenses held, ed-

ucation, training, and experience.”

The Plan defined a “helper” as an apprentice who works

under constant supervision and a “journeyman” as a skilled

craftsperson who may work with minimal supervision and

possesses “verifiable minimum experience and/or holds a

universally accepted certification, license and/or degree.” The

Plan also stated that electricians “[m]ay be required to hold a

license.”

In January 2009, the government approved the Plan, mak-

ing it the contractual standard by which Fluor employees’

qualifications were to be established.

In July 2009, Fluor was awarded Task Order 5, which au-

thorized Fluor to perform a variety of services, including elec-

trical work, at military bases in northern Afghanistan. Before

Fluor, a different contractor, KBR, Inc., had been performing

this work. To avoid major disruptions in service, the govern-

ment requested that Fluor attempt to hire KBR employees

who were already in Afghanistan. Fluor hired American and

British former KBR employees, as well as employees from

Bosnia, Macedonia, India, and Pakistan. The employees who

were not citizens of the United States or Great Britain were

referred to as “other-country nationals.”

4 No. 14-2815

Uhlig was one of the KBR employees that Fluor hired.

Fluor gave Uhlig a one-year foreperson1 position starting Jan-

uary 23, 2010.

In early 2010, Fluor reviewed its procedures for establish-

ing journeyman electricians’ qualifications and decided to re-

quire that these electricians hold a state-issued United States

license or a Great Britain-issued license. Fluor says that it im-

posed this requirement not because it was obligated to do so

under Modification 4, but rather because it wanted to stream-

line its qualification process and promote uniformity.

Uhlig had graduated from an apprenticeship program but

did not have an electrician’s license because his home state of

Missouri—like several other states—did not issue electrician’s

licenses.

By mid-2010, Fluor had implemented its licensing require-

ment for journeyman electricians being hired in the United

States for deployment to Afghanistan. However, the situation

was more complicated for electricians like Uhlig, who had al-

ready been hired in Afghanistan as “foremen” but lacked

state-issued electrician’s licenses. No one disputed that the

unlicensed foremen were qualified to do journeyman work;

nevertheless, Fluor decided to apply its licensing requirement

to existing employees.

On November 16, 2010, Fluor emailed its foremen working

under Task Order 5, including Uhlig, explaining that licensed

1 At KBR, Uhlig and other workers were “journeymen.” Uhlig and

other KBR journeymen were hired by Fluor as “foremen” because Fluor

did not yet have a job classification named “journeymen,” though KBR’s

pay scale for journeymen matched Fluor’s pay scale for its foremen.

No. 14-2815 5

foremen would be reclassified as “journeymen” and unli-

censed foremen would be reclassified as “helpers.” Fluor

stated that this change was meant to “bring Fluor into better

alignment with our contractual requirements.” Accordingly,

of the hundreds of Fluor electricians working under Task Or-

der 5, approximately thirty-one, including Uhlig, became

“helpers.” The others simply changed titles from “foremen”

to “journeymen.”

Other-country nationals were not eligible for licensing by

a state in the United States. Thus, under Fluor’s self-imposed

licensing procedure, all such employees became helpers, even

if, by virtue of their education and experience, they were qual-

ified to perform journeyman work. However, Fluor did not

plan to terminate unlicensed other-country nationals in the

same way Fluor terminated Uhlig. Fluor says that it was more

affordable to retain those employees as helpers because they

did not get the same overseas benefits as American helpers.

On November 17, 2010, Fluor offered Uhlig an additional

year’s employment. However, on November 19 Fluor in-

formed Uhlig that because he did not have a license, he was

being reclassified as a helper. Fluor further informed Uhlig

that unless he obtained a license before January 23, 2011, the

end of his one-year employment, he would be terminated.

Unfortunately for Uhlig, he was out of vacation days and

had no opportunity to return to the United States to get an

electrician’s license by January 2011. Uhlig asked human-re-

sources supervisor Thomas Rizzo for help, but Fluor would

not change its position. Uhlig was upset that he would be ter-

minated while the unlicensed other-country nationals—also

now all helpers—would stay on.

6 No. 14-2815

Uhlig says that after imposing the licensing requirement,

Fluor directed helpers to perform unsupervised journeyman

work. Uhlig was particularly frustrated after one assignment

at a camp called “NKC” and sent an email to Rizzo and De-

fense Contract Management Agency officer Billy Porter. In it,

Uhlig said he was given an assignment he did not think he

should be given as an unlicensed helper. Uhlig further stated:

“I am a U[S] tax payer losing my job at the end of January

because … this company is using my US tax dollars having

OCN/A[fg]hans [as] unlicensed electricians going against

government compliance.” Uhlig had not read Modification 4

or the language of the Trades Certification and Validation

Plan at that point.

Rizzo asked Uhlig why he had contacted the government

directly instead of pursuing available channels through Fluor.

Uhlig responded in a December 4, 2010 email: “I am just fol-

lowing a US taxpayer’s obligation to report fraud waste and

abuse from stiffing the US government.” Uhlig again copied

Porter on the email, but also sent the email to

mdoyle@doyleraizner.com, stating that Mr. Doyle was his at-

torney, and to mssparky@mssparky.com. Ms. Sparky was a

website hosted by a former KBR employee, the stated purpose

of which was “exposing … corporate greed among [defense]

contractors.” Uhlig admits that when he sent the email, he

had neither retained Doyle as his attorney nor previously

been in contact with him. Uhlig had simply found Doyle’s

name and email address on the Ms. Sparky website.2

2 Uhlig’s email accusations eventually prompted two members of the

Defense Contract Management Agency’s quality-assurance staff to inves-

tigate the tasks that Fluor’s electricians were performing. The staff did not

No. 14-2815 7

One week later, Fluor terminated Uhlig. Fluor says Uhlig’s

email to Ms. Sparky was unacceptable not only because it was

inflammatory but also because it contained Thomas Rizzo’s

name, email address, and phone numbers, which were not

publicly available. Sending this information to the Ms. Sparky

email address violated Fluor’s computer-use policy.

On February 15, 2011, Uhlig filed False Claims Act and re-

taliatory-discharge claims against Fluor. The government de-

clined to intervene as the plaintiff on its own behalf under

31 U.S.C. § 3730(b)(4)(B).

Fluor moved for summary judgment, and the district

court granted Fluor’s motion on August 6, 2014. In dismissing

the False Claims Act claim, the district court held that Fluor’s

contract with the Army did not require that journeyman elec-

tricians be licensed and therefore that Fluor had not breached

the contract. The court dismissed Uhlig’s retaliation claim be-

cause Uhlig had no objective basis for asserting that Fluor had

defrauded the government, thus his complaint was not “pro-

tected activity” under the False Claims Act. This appeal fol-

lowed.

II. Discussion

We review a district court’s grant of summary judgment

de novo, examining the record in the light most favorable to

find any problems. On-site Defense Contract Management Agency Com-

mander Colonel Cameron Holt said he was not concerned about Uhlig’s

allegations. Fluor received no written feedback from the Defense Contract

Management Agency regarding the investigation, and Fluor was never

asked to change its practices or procedures with respect to the assignment

of electrical tasks.

8 No. 14-2815

the nonmoving party. United States ex rel. Feingold v. AdminaS-

tar Fed., Inc., 324 F.3d 492, 494 (7th Cir. 2003) (citation omitted).

Summary judgment is proper when “there is no genuine dis-

pute as to any material fact and the movant is entitled to judg-

ment as a matter of law.” Fed. R. Civ. P. 56(a).

A. False Claims

The False Claims Act, 31 U.S.C. § 3729 et seq., makes it un-

lawful to (1) knowingly present a “false or fraudulent claim

for payment or approval” to the United States government, or

(2) knowingly make, use, or cause to be made or used a “false

record or statement material to a false or fraudulent claim.”

31 U.S.C. § 3729(a).

Under the Act, private individuals such as Uhlig—re-

ferred to as “relators”—may file qui tam civil actions on behalf

of the United States. To establish civil liability under the False

Claims Act, a relator generally must show that (1) the defend-

ant made a statement in order to receive money from the gov-

ernment; (2) the statement was false; (3) the defendant knew

the statement was false; and (4) the false statement was mate-

rial to the government’s decision to pay or approve the false

claim. United States ex rel. Yannacopoulos v. Gen. Dynamics, 652

F.3d 818, 822, 828 (7th Cir. 2011) (citations omitted).

Uhlig says Fluor violated the False Claims Act by know-

ingly employing unlicensed electricians in breach of its con-

tract and submitting invoices for the unlicensed services to

the government for payment. However, the contract did not

require licensing. Modification 4 to the LOGCAP IV contract

required craft employees to “possess a license, certification,

training, and/or education commensurate with the level of du-

ties to which they are assigned” (emphasis added). Further,

No. 14-2815 9

the Trades Certification and Validation Plan, which was the

contractual standard by which the employees’ qualifications

were to be established, also did not require licensing. Rather,

the Plan defined “journeyman” as a “[s]killed craftsman …

having verifiable minimum experience and/or hold[ing] a uni-

versally accepted certification, license and/or degree” (empha-

ses added).

The contract language clearly provided a set of options for

establishing an employee’s qualifications, and licensing was

not the exclusive method for doing so. Though Fluor inde-

pendently decided to phase in a self-imposed requirement

that journeymen must hold a license, this internal require-

ment did not change the plain terms of the contract. See Yanna-

copoulos, 652 F.3d at 826. As a result, Fluor was not in breach

of its contract with the government when it submitted in-

voices for electrical work performed by unlicensed electri-

cians.

Uhlig also argues that Modification 4 is an “alternative

contract.” As a result, he concludes, once Fluor elected one of

the four listed means of verifying its electricians’ qualifica-

tions, Fluor was required to abide by its choice, or else be in

breach of the contract. See Eagle Star Ins. Co. v. Seneca Ins. Co.,

No. 94 CIV. 9106 (JFK), 1995 WL 733642, at *3 (S.D.N.Y. Dec.

12, 1995).

We disagree. Eagle Star describes an alternative contract

as:

one in which a party promises to render some

one of two or more alternative performances, ei-

ther one of which is mutually agreed upon as

the bargained-for equivalent given in exchange

10 No. 14-2815

for the return performance by the other party.

Once a party elects its method of performance,

the contract ceases to be an alternative contract

and the electing party is obligated to perform in

accordance with the method of performance

elected by him.

Id. (internal citations and quotation marks omitted).

The Letter Agreement in Eagle Star contemplated mutually

exclusive performance options. See id. at *4. Here, however,

the language in Modification 4 and the Trades Certification

and Validation Plan contemplates compatible choices, as in-

dicated by the repeated use of “and/or” in describing the

qualification options.

Indeed, a plain reading of Modification 4 and the Trades

Certification Validation Plan is that Fluor needed to ensure

that its electricians were qualified for the duties to which they

were assigned by virtue of at least one of the following: li-

cense, certification, training, or education. Nothing in the con-

tract suggests that Fluor was required to elect one method of

verifying its electricians’ qualification and that Fluor would

then be limited to that method. In other words, under the con-

tract, Fluor could ensure that one electrician was qualified via

education, another via certification, and a third through licen-

sure, so long as each was qualified. Further, the contract did

not forbid Fluor from applying higher internal licensure poli-

cies to American electricians relative to other-country na-

tional electricians. The contract at issue, therefore, is not an

“alternative contract.”

Finally, Uhlig cites to emails from Fluor employees alleg-

edly interpreting the contract to prohibit unlicensed other-

No. 14-2815 11

country nationals from performing electrical work. However,

these messages do not change the contract’s plain terms. See

Yannacopoulos, 652 F.3d at 826 (when “[t]he language of [the

contract] is clear on its face, … the intent of the parties is to be

derived only from the express language of the contract”) (ci-

tation and internal quotation marks omitted).

Fluor did not breach its contract. Therefore, there was no

false statement under the False Claims Act, and we affirm the

district court’s decision.

B. Retaliation

Uhlig next argues that the district court erred in dismiss-

ing his retaliation claim. An employee can pursue a claim for

unlawful retaliation if he was discharged “because of lawful

acts done by the employee … in furtherance of an action un-

der” the False Claims Act. 31 U.S.C. § 3730(h). In other words,

a plaintiff must prove that he was engaged in protected con-

duct and was fired “because of” that conduct. Halasa v. ITT

Educ. Servs., Inc., 690 F.3d 844, 847 (7th Cir. 2012) (citations

omitted).

To determine whether an employee’s conduct was pro-

tected, we look at whether “(1) the employee in good faith be-

lieves, and (2) a reasonable employee in the same or similar

circumstances might believe, that the employer is committing

fraud against the government.” Fanslow v. Chi. Mfg. Ctr., Inc.,

384 F.3d 469, 480 (7th Cir. 2004) (citation omitted). In assessing

the second, “objective” prong, we look to the facts known to

the employee at the time of the alleged protected activity. See

id. at 479–80; Mann v. Heckler & Koch Def., Inc., 630 F.3d 338,

345 (4th Cir. 2010).

12 No. 14-2815

Uhlig’s retaliation claim cannot proceed because he did

not show that, at the time he sent the December 4, 2010 email,

a reasonable employee in Uhlig’s position would have be-

lieved Fluor was defrauding the government. As a result, his

conduct was not protected activity that could give rise to a

retaliation claim.

Uhlig admits he did not read Modification 4, the Trades

Certification and Validation Plan, or any other relevant con-

tract language before he sent the December 2010 email. He

therefore did not have any firsthand knowledge of Fluor’s

contract obligations to the Army.

Further, his secondhand knowledge—from two Novem-

ber 2010 emails—was not sufficient to cause a reasonable per-

son to suspect fraud on the part of Fluor. The November 16,

2010 email explained Fluor’s decision to reclassify unlicensed

electricians as “bring[ing] Fluor into better alignment with

[its] contractual requirements.” The November 19, 2010 email

stated that because Uhlig did not have a license, he was being

reclassified as a helper “to align [Fluor’s] job titles and basic

job responsibilities with the appropriate license, in accord-

ance with our contract with the client.”

Neither of these messages stated that Fluor’s contract with

the government required all electrical work to be performed

by licensed journeymen or that there was no role for unli-

censed helpers. The emails do not state Fluor’s contractual ob-

ligations to the government. Thus, these emails were not

enough to cause someone in Uhlig’s position to believe that

Fluor was defrauding the government.

Even if Uhlig subjectively believed Fluor was breaching its

contract, he lacked a sufficient basis on which to satisfy the

No. 14-2815 13

objective component of the protected-activity test. Uhlig’s

emails attempting to blow the whistle on Fluor’s alleged non-

compliance were therefore not protected activity. As a result,

even if the December 2010 email was the reason for Uhlig’s

termination, it cannot be the basis for a retaliation claim.

III. Conclusion

For the foregoing reasons, we AFFIRM the judgment of the

district court.