Mahony v. UNIVERSAL PEDIATRIC SERVICES, INC.
643 F.3d 1103
8th Cir.2011Background
- UPSI operates multiple Iowa home health offices; ~80% of income from Medicaid reimbursements.
- Mahony, hired 2006 as VP of Nursing, oversaw regulatory compliance audits and CMS/Medicaid submissions.
- Management planned Sheldon office expansion; CMS enrollment options included stand-alone vs. branch; Anderson chose stand-alone.
- In June 2008, Mahony warned against opening Sheldon without CMS approval; Gorter moved into Sheldon.
- June 5 confrontation led to internal investigation; Mahony filed grievance alleging harassment and policy violations.
- June 13, 2008 Mahony terminated; CMS later approved Sheldon as a branch and began Medicaid claims July 15.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Mahony engaged in protected public-policy activity | Mahony opposed potential false claims. | No protected activity; no actual false claims were planned. | No genuine issue; dismissal affirmed. |
| Whether termination undermines public policy | Termination chilled reporting of potential fraud under federal law. | At-will termination for managerial delay in expansion. | No public policy violation; affirmed. |
| Whether triable facts exist as to UPSI's intent to defraud | Evidence supports possible intent to file false claims. | Remedial actions negate intent; no fraud planned. | No, as a matter of law no factual dispute about intent. |
| Whether Mahony’s internal complaint bears weight under policy | Internal complaint protected under public policy. | Internal complaints do not override at-will rule here. | Not dispositive; public policy not triggered. |
Key Cases Cited
- Fitzgerald v. Salsbury Chem., Inc., 613 N.W.2d 275 (Iowa 2000) (established elements of Iowa wrongful discharge public policy)
- Lloyd v. Drake Univ., 686 N.W.2d 225 (Iowa 2004) (limits public policy to well-recognized policies)
- Jasper v. H. Nizam, Inc., 764 N.W.2d 751 (Iowa 2009) (limits recognizing public policy from statutes)
- Smuck v. National Management Corp., 540 N.W.2d 669 (Iowa Ct.App. 1995) (federal law may ground Iowa public policy (public policy against fraud))
- Martin Marietta Corp. v. Lorenz, 823 P.2d 100 (Colo. 1992) (federal false-statements act can underpin public policy)