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Tice v. Bristol-Myers Squibb Co.

September 13, 2007


The opinion of the court was delivered by: Conti, District Judge


Pending before this court is a motion for summary judgment (Doc. No. 5) filed by defendant Bristol-Myers Squibb Co. ("Bristol-Myers" or "defendant"). Plaintiff Carol Tice ("plaintiff") filed this civil action asserting two counts. Count one sets forth claims under the Age Discrimination in Employment Act, 29 U.S.C. §621 et seq. ("ADEA"), and the Pennsylvania Human Relations Act, 43 P.S. §954(b) ("PHRA").*fn1 Plaintiff, while admitting to violating a company policy of Bristol-Myers asserts that fellow employees under the age of forty engaged in the same activity, yet were not subject to disciplinary measures. Because plaintiff is over the age of forty and was disciplined, i.e., terminated for allegedly engaging in activity for which other employees were not similarly disciplined, plaintiff claims she was discriminated against on the basis of her age.

Count two sets forth claims for violating Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §2000 et seq. ("Title VII") and the PHRA, 43 P.S. §955.*fn2 With respect to these claims plaintiff alleges that male employees engaged in the same activity for which plaintiff was terminated; yet, the male employees were not terminated for the same behavior. Plaintiff alleges that Bristol-Myers violated Title VII when it terminated her for violations of its company policy, but failed to take similar actions against its male employees.

Bristol-Myers moves for summary judgment with respect to plaintiff's claims on the theory of issue preclusion or collateral estoppel, arguing that dispositive factual issues before this court were previously adjudicated and resolved in a prior federal administrative hearing that was separate from the statutory framework for Title VII and ADEA claims. Bristol-Myers asserts that plaintiff is precluded from relitigating those factual issues here. Plaintiff argues that no factual finding by an administrative agency, whether state or federal, may ever be given collateral estoppel effect in a Title VII or ADEA case. This court finds the doctrine of issue preclusion will be applicable when a material fact at issue in a Title VII or ADEA case was litigated and resolved in a final decision rendered in an action filed under Title VIII of the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1514A ("SOX"), a whistleblowers' protection provision. Congress has provided that, with respect to a SOX claim, when a final order of the Secretary of Labor could have been reviewed by a court of appeals, that order cannot be judicially reviewed in any other civil proceeding. 18 U.S.C. § 1514A(b)(2) (SOX action is governed by rules and procedures in 49 U.S.C. § 42121(b)(4), which provides a limitation on collateral attack); 29 C.F.R. § 1980.112(a). Here, the decision of the administrative law judge became the final order of the Secretary of Labor and review of that order by a court of appeals could have been obtained. Under these circumstances plaintiff is collaterally estopped from relitigating the factual issues resolved by the ALJ and summary judgment will be granted in favor of defendant.

Factual Background

The factual background is derived from the undisputed evidence of record and the disputed evidence of record viewed in the light most favorable to the nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). ("The evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor").

In July 1986, plaintiff began her employment with a predecessor of Bristol-Myers as a pharmaceutical sales representative. In 1997, plaintiff was promoted to a cardiovascular specialty position. (Pl. Ex. 1 at 21). In July 2003, she was given the additional title of Senior Business Manager. (Def. Ex. 2 at 12).

In early 2004, two employees complained to plaintiff's manager, Harry Broadus ("Broadus"), that plaintiff was reporting sales calls outside of her territory. These employees complained that plaintiff recorded sales calls that she had not actually made. (Id. at 417-18). In December 2004, the same two employees again informed Broadus that plaintiff was still reporting calls on physicians outside of her territory. (Id. at 448). Also in December 2004, a separate department, the sample reconciliation group, notified Broadus that plaintiff had an issue with reconciliation of samples of the drug "Coumadin." The sample reconciliation group informed Broadus that three or four cases of the drug, for which plaintiff was responsible, were missing. (Id. at 160). On December 14, 2004, a meeting took place between Broadus and plaintiff. (Id. at 403). During this meeting, plaintiff admitted to Broadus that she had falsified sales call reports by recording sales calls on doctors with whom she had not actually met. (Id. at 407-09). Broadus, in turn, informed plaintiff that disciplinary measures would likely be taken with respect to the reconciliation problems identified by the sample reconciliation group. Broadus further informed plaintiff that he notified Kathleen Allard ("Allard"), regional vice president of sales, about the falsified sales call reports. Broadus advised plaintiff that the call reporting issue was under investigation. (Id. at 167-69). In a memorandum dated December 14, 2004, Broadus memorialized the conversation between plaintiff and himself and forwarded the memorandum to Allard. (Id. at 218).

In response to the December 14, 2004 memorandum, plaintiff prepared a memorandum dated December 18, 2004, requesting a meeting with Allard. In that memorandum, plaintiff alleged: 1) a belief that Broadus and other personnel retaliated against her because of a previous sexual harassment claim; 2) a belief that Broadus may have improperly perceived her as not being able to do her job because of a medical condition;*fn3 and 3) her concern regarding appropriate business ethics as it related to the accurate reporting of daily sales calls and the pressure placed upon sales representatives to misrepresent the number of sales calls. A copy of plaintiff's memorandum was sent to Kathryn Santos-Tharney ("Santos-Tharney"), human resources generalist. (Def. Ex. C-5). Allard contacted Santos-Tharney and advised her not to contact plaintiff regarding the allegations made in her December 18, 2004 memorandum. Allard advised Santos-Tharney to allow human resources to investigate the allegations. (Def. Ex. 2 at 215, 247). Because the allegations involved possible company violations, Santos-Tharney notified Kathleen McElarney ("McElarney"), an employee relations investigator. (Id. at 308).

In January 2005, Santos-Tharney and plaintiff discussed the issues and concerns raised in plaintiff's memorandum on the telephone. (Pl. Ex. 1 at 82). On February 10, 2005, plaintiff had a telephone conversation with McElarney, who was in charge of investigating the allegations in plaintiff's memorandum. (Id. at 312). Plaintiff and McElarney discussed the allegations in plaintiff's memorandum. Plaintiff explained the nature of her previous sexual harassment claim, again admitted to having falsified sales call reports, and indicated that other Bristol-Myers employees also falsified sales call reports. Plaintiff did not provide McElarney with names of any alleged offenders (Def. Ex. 2 at 329) and did not provide examples of how Broadus had treated her differently due to her medical condition. (Id. at 312-14).

In addition to the telephone conversation between McElarney and plaintiff concerning plaintiff's memorandum, McElarney interviewed Broadus about the allegations. (Id. at 318-19). McElarney determined that plaintiff's accusations of retaliation related to her previous claim for sexual harassment and discriminatory treatment based upon her medical condition were unfounded. (Id. at 346, 349). In addition, McElarney confirmed that plaintiff falsified sales calls without being asked to do so. (Id. at 319). Based upon this information, on March 2, 2005, McElarney prepared a memorandum recommending that plaintiff be terminated for falsifying sales call reports. (Id. at 321). The act of falsifying sales call reports is a violation of Bristol-Myers's Code of Conduct, which provides in pertinent part:

Immediate Termination

Certain violations of this Code of Conduct result in immediate termination for cause (i.e., without severance). Examples include, but are not limited to, the following: Falsification of any company document, including call reports and expense reports. Falsification of call reports includes, but is not limited to, reporting a call on a date other than the date on which the calls was made. . . . (Def. Ex. R14 at 18). Plaintiff was terminated on April 13, 2005. (Def. Ex. 2 at 299).

On May 12, 2005, plaintiff filed a complaint with the United States Department of Labor's Occupational Safety and Health Administration ("OSHA"), alleging that Bristol-Myers violated SOX. (Def. Ex. 1 at 1). Plaintiff claimed that she was terminated for engaging in protected activity. The alleged protected activity consisted of plaintiff's admission to having falsified sales call reports and her reporting that other Bristol-Myers employees had done the same. In essence, plaintiff alleged in her SOX claim that the protected activity was the reporting of company violations. Plaintiff claimed that because she reported that undisclosed employees of Bristol-Myers, as well as herself, falsified call reports, Bristol-Myers terminated her. Additionally, plaintiff claimed that management at Bristol-Myers was pressuring sales representatives into falsifying sales call reports. (Id. at 2).

SOX provides for whistleblowers' protection, enumerating certain lawful behavior which is protected. SOX protects employees who provide information to their employer about what the employees reasonably believe constitutes a violation of various federal statutes protecting shareholders and ensuring integrity within the corporate structure. 18 U.S.C. §1514A.

Following an investigation, OSHA found no reasonable cause to believe that Bristol-Myers violated SOX. OSHA determined that plaintiff's purported protected activity (i.e. providing information about what she felt was unethical activity) was not a factor in her termination. (Def. Ex. 1 at 2). On November 4, 2005, plaintiff, objecting to OSHA's findings, sought a hearing before an administrative law judge (the "ALJ"). A hearing was granted. The hearing took place over three days from January 30, 2006 through February 1, 2006. (Id.).

During the administrative hearing, the ALJ considered several issues. These issues were explicitly itemized in the ALJ's written opinion and included:

(1) Does Bristol-Myers qualify as a company covered by SOX?

(2) Was Carol Tice an employee of Bristol-Myers on the date of the protected activity?

(3) Was Tice engaging in protected activity under SOX?

(4) If Tice engaged in protected activity as an employee of Bristol-Myers, was Bristol-Myers aware of the protected activity?

(5) Did Tice suffer unfavorable personnel actions?

(6) If Tice engaged in protected activity as an employee of Bristol-Myers, and Bristol-Myers was aware of the protected activity, did the protected activity contribute to the decision by Bristol-Myers to terminate Tice?

(7) If Tice established a violation of the employee protection provisions of SOX, did Bristol-Myers demonstrate by clear and convincing evidence that it would have disciplined Tice or terminated her even in the absence of the protected activity?

(Id. at 3-4).

Prior to the administrative hearing, plaintiff and defendant conducted full discovery. During the administrative hearing, McElarney, Broadus and plaintiff testified under oath and were subject to cross-examination by opposing counsel. (Def. Ex. 2 at 11, 214, 403). A court reporter was present and all testimony obtained during the hearing was recorded. Additionally, counsel for each party submitted legal briefs and presented closing arguments before the ALJ.

On April 26, 2005, the ALJ issued his decision, which was explained in a detailed written opinion. (Def. Ex. 1 at 1-2).

In addition to the aforementioned enumerated issues set forth by the ALJ, three material factual disputes were considered during the administrative hearing. These factual disputes were discussed at length in the ALJ's opinion. First, the ALJ addressed plaintiff's allegations that management pressured employees to misrepresent sales call data. Next, the ALJ addressed plaintiff's allegations that other Bristol-Myers' representatives falsified their respective sales call reports. Finally, the ALJ addressed plaintiff's admission that she falsified sales call reports. (Id. at 18, 20, 21).

On the first of these issues, the ALJ determined that plaintiff could not objectively believe that any conduct on the part of Bristol-Myers or its employees served as a directive to falsify sales call reports. Plaintiff did not offer any evidence that any Bristol-Myers official directed her to falsify sales call data or compelled her to do so. (Id. at 19). Therefore, the ALJ concluded that there was no specific conduct by Bristol-Myers constituting fraud against shareholders. (Id. at 19).

On the second and third issues, the ALJ found that plaintiff's allegations failed to meet the materiality standard necessary for an employee to reasonably believe fraudulent activity was taking place. The materiality standard requires a complainant's belief of fraudulent misconduct to be based upon significant and material information concerning a corporation's financial condition in order to be considered a reasonable belief. (Id. at 21). During the administrative hearing, the only falsified sales call reporting plaintiff testified about was that engaged in by Greg Lane, an employee who left Bristol-Myers prior to plaintiff's reporting the falsification of the call reports. (Id. at 21-22, 45). The ALJ concluded that such a minimum showing of false sales call reporting did not meet the materiality standard outlined by SOX. Essentially, the ALJ concluded that it was unlikely that Bristol-Myers could have benefitted financially from falsified sales call reports on only two doctors by two sales representatives. The ALJ found that plaintiff's allegations were not material or significant enough for her to have reasonably believed that Bristol-Myers was engaged in fraudulent behavior that violated any federal securities regulations.*fn4

With respect to the second issue whether other Bristol-Myers' representatives falsified call reports, the ALJ specifically resolved factual disputes relating to the reasons for plaintiff's termination. (Id. at 23). The ALJ found that plaintiff's reporting of falsified call reports was not a contributing factor to her termination; rather, plaintiff was terminated because she falsified call reports. The ALJ concluded that "the [plaintiff] was terminated for the act of falsifying calls, not for the reporting of doing so." (Id. at 25). The ALJ found that Bristol-Myers demonstrated by clear and convincing evidence that it would have terminated plaintiff even in the absence of any protected activity. (Id. at 26). The ALJ determined that Bristol-Myers consistently adhered to its policy regarding the firing of employees who file false reports and terminated employees who falsified call reports. (Id. at 26). In reaching the decision that Bristol-Myers acted according to its policy by terminating plaintiff for falsifying call reports, the ALJ noted the absence of any discriminatory intent on the part of Bristol-Myers when determining whether to terminate plaintiff. (Id. at 24). Plaintiff admits that the factual findings of the ALJ are not disputed. (Doc. No. 19, Joint Concise Statement of Material Facts at 51-55). Plaintiff, however, argues that those facts are not material by reason of de novo review arguably being required and because plaintiff asserts that "the practice of falsifying sales call records was a common and well-known practice among the defendant's sales personnel, and was condoned and accepted by [d]efendant's managerial staff." (Id.) Plaintiff did not appeal the ALJ's decision which then became "the final order of the Secretary of Labor . . . pursuant to 29 C.F.R. § 1980.109(c)." Id. at 51. The assertion of plaintiff regarding the condoning and accepting of false call reports by defendant was raised and found to be without merit by the ALJ. (Def. Ex. 1 at 26).*fn5

Standard of Review

Federal Rule of Civil Procedure 56(c) provides that summary judgment may be granted if, drawing all inferences in favor of the nonmoving party, "the pleadings, deposition, 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 a judgment as a matter of law." FED. R. CIV. P. 56(c). A motion for summary judgment will not be defeated by the mere existence of some disputed facts, but will be defeated when there is a genuine issue of material fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). In determining whether the dispute is genuine, the court's function is not to weigh the evidence or to determine the truth of the matter, but only to determine whether the evidence of record is such that a reasonable jury could return a verdict for the nonmoving party. Id at 249. The court may consider any material or evidence that would be admissible or usable at trial in deciding the merits of a motion for summary judgment. Horta v. Sullivan, 4 F.3d 2, 8 (1st Cir. 1993) (citing 10A CHARLES ALAN WRIGHT, ARTHURR. MILLER AND MARY KAY KANE, FEDERAL PRACTICE AND PROCEDURE ยง 2721); Pollack ...

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