The opinion of the court was delivered by: BY THE COURT; JAMES T. GILES
David Shapiro ("Shapiro") alleges that defendants wrongfully terminated his employment in violation of the "whistleblower" protection provisions of the False Claims Act, 31 U.S.C. §§ 3729-3731. Defendants have moved for summary judgment. For the reasons stated below, defendants' motion is denied.
I. FACTUAL AND PROCEDURAL BACKGROUND
Shapiro was a shareholder, officer and director of a corporation known as Action Environmental and Home Inspection Services, Inc. ("Action"). On August 10, 1992, Ecotech Enterprises, Inc. ("Ecotech"), purchased the assets of Action. Shapiro alleges that he became an employee of Ecotech when he and Ecotech entered into a "Consulting/Non-compete Agreement" ("Agreement") which assigned him marketing and management responsibility.
Shapiro alleges that Ecotech purchased Action in order to obtain the operating facilities necessary to qualify as a Women's Business Enterprise ("WBE"). He alleges that, prior to Ecotech's purchase of Action, Ecotech was operating fraudulently as a WBE. He further alleges that Accredited Environmental Technologies, Inc. ("AET") participated in the fraud by performing the contracts Ecotech obtained and by accepting the other benefits Ecotech obtained as a WBE. Finally, Shapiro alleges that the presidents of AET and Ecotech, Alan Sutherland ("Sutherland") and his wife Lauren Wiler Sutherland ("Wiler"), participated in the fraud.
Two weeks after Ecotech purchased Action, Ecotech's president ordered Shapiro to discharge office staff, lab technicians and field personnel. Thereafter, Shapiro allegedly warned Ecotech's president orally and in writing that any attempt to operate Ecotech as a WBE without the required operating facilities would be unlawful and would result in False Claims being presented for payment to the United States government.
On November 4, 1992, Ecotech terminated its relationship with Shapiro. Shapiro alleges that his employment was terminated because he threatened to expose possible violations of the False Claims Act (the "Act"), 31 U.S.C. §§ 3729-31. Defendants have moved for summary judgment arguing that Shapiro is not entitled to relief under 31 U.S.C. § 3730(h) because Shapiro was not an "employee" of any of the defendants as is required by the Act.
II. STANDARD FOR SUMMARY JUDGMENT
Summary judgment is to be granted only "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). Furthermore, the moving party has the burden to provide evidence which responds to the central allegations of the non-moving party's complaint. Fitzke v. Shappell, 468 F.2d 1072 (6th Cir. 1972). If the moving party meets his burden, the adverse party may not rest on the pleadings but must set forth specific facts demonstrating that there is a genuine issue for trial. Adickes v. S.H. Kress & Co., 398 U.S. 144, 26 L. Ed. 2d 142, 90 S. Ct. 1598 (1970).
All defendants have moved for summary judgment, arguing that Shapiro was not their "employee" and thus does not have standing to sue under the Act.