138 F. Supp. 3d 329
S.D.N.Y.2015Background
- Ashmore, a former CGI employee who previously worked at HUD, alleges he objected to a Rat Pack strategy to evade HUD’s Section 8 unit cap (a "shell company" and related 49/51 plans) and was terminated after raising objections; he brings a Sarbanes‑Oxley § 806 whistleblower claim and a breach of contract claim for unpaid bonus.
- CGI conducted PBCA rebid planning; Ashmore participated in strategy meetings (the “Rat Pack”) and says the shell/transfer‑back and 49/51 strategies were discussed; CGI disputes existence/seriousness of any fraudulent scheme.
- Ashmore asserts he told his supervisor (Carragher) on May 11, 2010 that the scheme was illegal; he was excluded from meetings in mid‑June and terminated on June 16, 2010.
- CGI relies on contemporaneous performance criticisms (average April review, attendance, communication, project management issues) and supervisor Kyprianou’s recommendation to fire; CGI contends termination was for performance.
- Ashmore’s offer letter referenced eligibility for an annual, performance‑tied profit participation bonus but did not unambiguously guarantee payment; CGI practice suggested eligibility required employment through fiscal year end.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Ashmore engaged in protected activity under SOX § 806 | Ashmore says he subjectively and reasonably believed the Rat Pack plans violated federal fraud statutes and told his supervisor | CGI argues there was no objectively reasonable belief because the scheme was speculative, undeveloped, and Ashmore didn’t document or escalate objections | Court: Genuine issues of fact exist as to both subjective and objective reasonableness and whether Ashmore engaged in protected activity — summary judgment denied on SOX claim |
| Whether CGI knew of Ashmore’s protected activity | Ashmore contends his communications to supervisor provided notice | CGI contends his statements referenced HUD/procurement rules, not SOX‑enumerated laws, so no notice | Court: His communications were sufficient to put CGI on notice as a matter for the jury — disputed fact remains |
| Whether CGI proved by clear and convincing evidence it would have terminated Ashmore absent protected activity | Ashmore points to temporal proximity, exclusion from meetings, and gaps between criticisms and discipline as evidence of pretext | CGI points to documented performance issues, supervisor recommendation, and prior warnings to show legitimate, nondiscriminatory reasons | Held: Triable issues on pretext and causation; CGI did not carry the clear‑and‑convincing threshold on summary judgment — SOX claim survives |
| Whether CGI breached contract by failing to pay bonus | Ashmore contends the offer letter and practice entitled him to profit participation bonus | CGI argues bonus was discretionary/contingent and customary practice required employment through fiscal year end; no contractual entitlement shown | Held: No genuine dispute; offer letter and evidence do not establish a mandatory bonus right — summary judgment for CGI on breach of contract |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burdens and framework)
- Anderson v. Liberty Lobby, 477 U.S. 242 (standard for genuine issue of material fact)
- Bechtel v. Admin. Review Bd., 710 F.3d 443 (burden‑shifting and employer’s clear‑and‑convincing burden under § 1514A)
- Guyden v. Aetna, Inc., 544 F.3d 376 (focus on plaintiff’s belief rather than actual fraud in § 1514A cases)
- Leshinsky v. Telvent GIT, S.A., 942 F. Supp. 2d 432 (application of objective/subjective reasonable belief and summary judgment in SOX cases)
- Lugosch v. Pyramid Co. of Onondaga, 435 F.3d 110 (public access presumption for summary‑judgment submissions)