Labor & Employment

On August 26, 2022, the Third Circuit Court of Appeals issued a ruling in Crosbie v. Highmark Inc., _ F.4th_ (3d Cir.  Aug. 26, 2022), holding that, an employee who makes a whistleblowing claim is not insulated from being terminated from their position if they exhibit harassing behavior in the workplace.

Background and Procedural History

Defendant Gateway Health Plan (“Gateway”), a health insurance company, hired Plaintiff Alastair Crosbie (“Crosbie”) to investigate fraud within Highmark Inc.’s (“Highmark”) network of doctors.  In 2017, Crosbie discovered that some doctors did not have required Medicaid licenses, while others had prior convictions for selling opioid prescriptions.  Crosbie reported his findings to his managers at Gateway, who declined to take any action.  Crosbie urged his managers to do something, but his managers eventually told him to drop the issue.  

About a year later, a co-worker filed a complaint against Crosbie with Highmark’s Human Resources department (“HR”).  Specifically, the co-worker alleged Crosbie called her “Miss Piggy” and he “oinked” at her.  HR interviewed an eyewitness, who also corroborated the allegation.  Upon the urging of Crosbie, HR interviewed additional employees who knew of past issues between Crosbie and the complainant.  Furthermore, HR interviewed Jim Burgess, one of Crosbie’s managers who Crosbie claims told him over a year ago to drop the issue regarding Crosbie’s fraud report.  Burgess stated that “he would have questioned the [co-worker’s] allegations”, but Crosbie had called him earlier that day and made similar “coughing” and “snorting” noises, making Burgess think Crosbie did in fact make the alleged “oinking” sounds towards the complaining co-worker.  After HR completed its investigation, Crosbie was terminated from his position.  Crosbie then sued Highmark and Gateway, claiming retaliation under the False Claims Act.  Specifically, Crosbie claimed he was terminated as a result of his fraud report.  Highmark argued no retaliation had occurred because the decisionmakers regarding Crosbie’s termination had no knowledge of Crosbie’s fraud report and that they had a good reason to fire him.  The District Court agreed with Highmark, granted summary judgment in their favor, and dismissed Crosbie’s complaint.  Crosbie appealed.

Third Circuit’s Opinion

On appeal, Crosbie argued that Highmark’s decision for terminating him was pretext for retaliation, because the HR investigation was inadequate, and that Burgess influenced the investigation because he wanted Crosbie fired.  With respect to the HR investigation, Crosbie argued that the investigator “did not follow standard procedure, interview every witness, or look at the complainant’s history of baseless allegations.”  The Third Circuit, however, found that those reasons were not enough to prove pretext.  The Third Circuit explained that the issue is not whether HR conducted the best investigation, but whether the investigation was so inadequate, that a jury could find it unbelievable.  Given that the investigator interviewed the complainant, Crosbie, and other employees, including an eyewitness who corroborated the complainant’s allegation, the Third Circuit did not find that the investigation was a sham.  Furthermore, it agreed with the district court’s findings that since Crosbie conceded that the HR investigator did not know about Crosbie’s fraud report, the investigator could not have retaliated against him for that reason.

Irrespective of the quality of the investigation, Crosbie also argued that retaliation occurred under a Cat’s Paw Theory.  Under this theory, “[a]n employer can be liable…only if a non-decisionmaker’s act proximately caused the firing.”  As stated above, Crosbie alleged Burgess (who did not make the decision to fire Crosbie) influenced the investigation because he wanted him fired.  The Third Circuit also rejected this claim as Crosbie was unable to show that Burgess wanted to fire him because of his fraud report, and that Burgess influenced HR’s investigation or Crosbie’s termination.

Main Takeaway

The Third Circuit held that “[w]histleblowing does not insulate an employee from being fired for misconduct.”  As such, employers should feel reassured that they can take appropriate actions towards a whistleblower who engages in bad workplace conduct.


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