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NEAL v. HONEYWELL

October 3, 1996

JUDITH A. NEAL, Plaintiff,
v.
HONEYWELL, INC., and ALLIANT TECHSYSTEMS, INC., Defendants.



The opinion of the court was delivered by: PLUNKETT

 In their second motion for summary judgment in this False Claims Act case, defendants Honeywell, Inc. ("Honeywell"), and Alliant Techsystems, Inc., contend that the evidence supporting plaintiff Judith A. Neal's claim under section 3730(h) of the False Claims Act is insufficient as a matter of law. Because we find that genuine issues of material fact exist, we deny the motion.

 Facts

 Under contracts with the Department of Defense (the "government") which began in 1981, Honeywell manufactured ammunition for Army aircraft and fighting vehicles at its Joliet Arsenal Plant ("Joliet"). The ammunition was assembled in lots, each of which was given an identification number. The contracts obligated Honeywell to test the ammunition prior to delivery to ensure that it conformed to the government's specifications.

 Neal was hired at Joliet in the human resources department as an "organizational development specialist" on March 11, 1985. In February 1987, her superior, William Tyler ("Tyler"), the human resources manager at Joliet, asked her to investigate low morale in the PVC department, where the ammunition was tested to determine if it conformed to specifications. Neal met with James Law, the PVC advisor, and, with his permission, interviewed several PVC employees. During these interviews, she learned that results of ballistics tests on the ammunition were being falsified. After having conversations with several members of the testing team, Neal informed Tyler and Timothy Asmus ("Asmus"), quality manager, about the test data falsification. According to Neal, Tyler told her she was not supposed to have found out about it, that management was aware of it, and that management would handle it. At a meeting of Neal, Asmus and Tyler, both Neal and Asmus took the position that Honeywell's management in Minneapolis had to be informed. Tyler disagreed, stating that the situation would be handled internally at Joliet. There is no evidence that he ever passed on the information Neal disclosed to him either to Honeywell management in Minneapolis or to the federal government.

 Dissatisfied with Tyler's response, on Tuesday, March 3, 1987, Neal reported to Honeywell via an employee "hotline," that she had evidence that test data was being falsified. She spoke with Robert Becker ("Becker"), the legal department manager. She requested, among other things, information regarding anonymity. *fn1" She also asked to be called back at home that evening because she did not want to discuss the test data falsification from her office. Becker agreed and contacted her at home that evening. He assured her that her identity would remain confidential.

 Despite his promise to Neal, the following day Becker disclosed not only the substance of Neal's report, but her identity as well, to Mockenhaupt. Neal's identity was also disclosed it to Kenneth Fraasch ("Fraasch"), vice president of ammunition operations. *fn2" Fraasch's deposition testimony strongly suggests that he very soon disclosed Neal's identity at least indirectly to James K. Frakes, Jr. ("Frakes"), the location manager at Joliet. *fn3" In fact, both Timman and Neal testified at their depositions that Timman informed her on March 6 that Frakes knew she was the one who had made the call. There is no evidence that any Honeywell employee was ever disciplined for failing to maintain the confidentiality of Neal's identity.

 On March 5, 1987, Neal informed Tyler that she had made the hotline call. According to Neal, Tyler responded angrily and told her she should not have done it, that she had put the plant and the jobs of all its employees in jeopardy. During the next two weeks, Tyler made similar comments. Neal asserts that in early April, Tyler told her she had ruined the facility. Honeywell disputes that Tyler made these comments. *fn4"

 Through the investigation by Timman and Ray Loonan, *fn5" Honeywell determined by Friday, March 6, 1987, that there was substance to Neal's allegations, and it relayed information about the testing irregularities to the federal government. That day, Frakes and other top managers were informed that they were to be suspended on Monday, March 9, 1987. *fn6" And, on Monday, March 9, 1987, Honeywell suspended all ammunition testing at Joliet, replaced the managers there with Honeywell personnel from outside Joliet, and began a formal internal investigation. Frakes and the other suspended managers were restricted, for the most part, to a training room located near Neal's office.

 Mockenhaupt announced the suspensions and investigation to the employees at Joliet via a memorandum which stated that the investigation resulted from a hotline call. There is evidence (in the form of deposition testimony from persons employed at Joliet at the time) that an active "rumor mill" regarding the identity of the whistleblower quickly developed. According to some of the deponents, it was soon known by many employees at the Joliet plant that Neal had made the hotline call.

 On March 17, 1996, Neal learned from Christopher Long ("Long"), a human resources trainer and a friend of hers, that David Young ("Young"), a production manager at Joliet and one of the suspended managers, had threatened to "get" the whistleblower. *fn7" She informed Timman, who asked if she wanted physical protection, which she declined. There is no evidence that Timman informed any of his superiors of Young's threats.

 When Honeywell began its internal investigation, it assigned A. Allen Gray ("Gray"), associate general counsel at Honeywell, and Daryl Zimmer ("Zimmer"), Honeywell's director of ethics, to investigate either "personnel actions," according to Honeywell, or Honeywell's possible criminal and civil exposure, according to Neal. *fn8" During their interviews with Joliet employees, they learned on April 9, 1987, that Young had threatened the whistleblower. At some point thereafter, one or both of them confronted Young, who admitted making the threat and promised it would not be repeated. However, in their report, given to Honeywell's management later, Gray and Zimmer concluded that there was some evidence that Young had "not fully overcome these feelings of retribution and reprisal." (Pl.'s Response to Defs.' Rule 12(M) Statement, Ex. 10.) There is no evidence that either Gray or Zimmer made any report to their superiors when they first learned of Young's threats. No disciplinary action was initiated against Young at that time, and Spotts, the acting plant manager at Joliet, never addressed the issue with him. *fn9" There is evidence that none of the upper level personnel at Honeywell involved in the Joliet investigation, including Mockenhaupt, Becker, Spotts, and Gray, ever made an effort to protect Neal from retaliation or harassment at the plant. In fact, each of these people testified at their depositions that either that they took no action in this regard or that it was not their responsibility to do so.

 In the second week of May, someone at Honeywell informed Neal that the investigation was about to conclude and that personnel actions would be taken. Tyler offered Neal a one-month paid leave of absence, which she accepted because she was concerned that if any of the suspended personnel were disciplined, they might retaliate against her. Neal did not return work until the middle of June.

 On May 11, 1987, in conjunction with the completion of the internal investigation, Young was transferred immediately to a position at a Honeywell facility in Minnesota. Although he received a memorandum from Fraasch which informed him that his grade was being lowered and which stated that his "expressions of retribution and possible attempts to intimidate employees . . . [were] unacceptable management behavior," (Def.'s Ex. P-1), in fact Young was placed in charge of a factory employing about 375 people (nearly double the size of Joliet, where he had been the number two man) and continued to receive the same salary. *fn10" He was informed in August 1987 (after the transfer) that, beginning in November 1987, he would receive a merit salary increase of about $ 800 per month. *fn11"

 Neal contends that after she informed Tyler that she was the whistleblower, he stripped her of virtually all her responsibilities. She also asserts that he isolated her from other employees at the plant. The defendants dispute this and argue that she continued to perform rewarding job duties. They also assert that some of Neal's official responsibilities, such as "team building," were temporarily suspended because of the level of disruption which existed at Joliet as a result of the investigation. We find that there are significant disputes of material fact regarding this issue.

 By April 1987, Neal expressed to friends and her counselor that she felt she was being treated badly because she had made the hotline call and that she wanted to leave Honeywell. She contends that the stress of her situation there caused severe depression, insomnia and nightmares. She put her house on the market on April 23, 1987. In March and April 1987, she interviewed for and was offered positions at Honeywell facilities in Minneapolis and Tampa. *fn12" She declined them because she felt that such moves would be only lateral and did not include salary increases. *fn13" When the house sold in the middle of August 1987, she immediately resigned from Honeywell and moved to Connecticut, where she did not have a job. After several months of ...


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