Opinion
19-2897
01-02-2020
THOMAS REILLY, Plaintiff-Appellant v. GLAXOSMITHKLINE LLC, Defendant-Appellee
Betty S.W. Graumlich (VSB No. 30825) Mark J. Passero (PA ID No. 314298) REED SMITH LLP Riverfront Plaza-West Tower 901 East Byrd Street, Suite 1900 Richmond, VA 23219 (804) 344-3400 bgraumlich@reedsmith.com mpassero@reedsmith.com Kim M. Watterson (PA ID No. 63552) REED SMITH LLP 225 Fifth Avenue Pittsburgh, PA 15222 (412) 288-7996 kwatterson@reedsmith.com Counsel for Counsel for Defendant-Appellee GlaxoSmithKline LLC
On Appeal from the July 16, 2019 Memorandum and Order Entered in the Eastern District of Pennsylvania at Civil Action No. 2:17-cv-02045-JCJ
BRIEF OF APPELLEE
Betty S.W. Graumlich (VSB No. 30825) Mark J. Passero (PA ID No. 314298) REED SMITH LLP Riverfront Plaza-West Tower 901 East Byrd Street, Suite 1900 Richmond, VA 23219 (804) 344-3400 bgraumlich@reedsmith.com mpassero@reedsmith.com
Kim M. Watterson (PA ID No. 63552) REED SMITH LLP 225 Fifth Avenue Pittsburgh, PA 15222 (412) 288-7996 kwatterson@reedsmith.com Counsel for
Counsel for Defendant-Appellee GlaxoSmithKline LLC
Corporate Disclosure Statement and Statement of Financial Interest
No. 19-2897
Thomas Reilly
v.
GlaxoSmithKline, LLC
Instructions
Pursuant to Rule 26.1, Federal Rules of Appellate Procedure any nongovernmental corporate party to a proceeding before this Court must file a statement identifying all of its parent corporations and listing any publicly held company that owns 10% or more of the party's stock.
Third Circuit LAR 26.1(b) requires that every party to an appeal must identify on the Corporate Disclosure Statement required by Rule 26.1, Federal Rules of Appellate Procedure, every publicly owned corporation not a party to the appeal, if any, that has a financial interest in the outcome of the litigation and the nature of that interest. This information need be provided only if a party has something to report under that section of the LAR.
In all bankruptcy appeals counsel for the debtor or trustee of the bankruptcy estate shall provide a list identifying: 1) the debtor if not named in the caption; 2) the members of the creditors' committee or the top 20 unsecured creditors; and, 3) any entity not named in the caption which is an active participant in the bankruptcy proceedings. If the debtor or the bankruptcy estate is not a party to the proceedings before this Court, the appellant must file this list. LAR 26.1(c).
The purpose of collecting the information in the Corporate Disclosure and Financial Interest Statements is to provide the judges with information about any conflicts of interest which would prevent them from hearing the case.
The completed Corporate Disclosure Statement and Statement of Financial Interest Form must, if required, must be filed upon the filing of a motion, response, petition or answer in this Court, or upon the filing of the party's principal brief, whichever occurs first. A copy of the statement must also be included in the party's principal brief before the table of contents regardless of whether the statement has previously been filed. Rule 26.1(b) and (c), Federal Rules of Appellate Procedure.
If additional space is needed, please attach a new page.
Pursuant to Rule 26.1 and Third Circuit LAR 26.1, GlaxoSmithKline, LLC (Name of Party) makes the following disclosure: (Name of Party)
1) For non-governmental corporate parties please list all parent corporations. GlaxoSmithKline LLC has only one member, GlaxoSmithKline Holdings (Americas) Inc., which is owned, through several layers of wholly-owned subsidiaries, by GlaxoSmithKline plc, a publicly-traded public limited company organized under the laws of England.
2) For non-governmental corporate parties please list all publicly held companies that hold 10% or more of the party's stock:
GlaxoSmithKline LLC has only one member, GlaxoSmithKline Holdings (Americas) Inc., which is owned, through several layers of wholly-owned subsidiaries, by GlaxoSmithKline plc, a publicly-traded public limited company organized under the laws of England.
3) If there is a publicly held corporation which is not a party to the proceeding before this Court but which has as a financial interest in the outcome of the proceeding, please identify all such parties and specify the nature of the financial interest or interests:
None.
4) In all bankruptcy appeals counsel for the debtor or trustee of the bankruptcy estate must list: 1) the debtor, if not identified in the case caption; 2) the members of the creditors' committee or the top 20 unsecured creditors; and, 3) any entity not named in the caption which is active participant in the bankruptcy proceeding. If the debtor or trustee is not participating in the appeal, this information must be provided by appellant.
N/A
(Signature of Counsel or Party)
Dated: September 4, 2019
TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT ............................................................. 1
STATEMENT OF THE ISSUES ............................................................ 4
STATEMENT OF THE CASE .............................................................. 5
I. Factual Background ..................................................................... 5
A. Reilly's Employment With GSK's AS/400 Service Team ........................................................................... 5
B. Reilly's Concerns Regarding The AS/400 ............................... 6
1. Reilly's Difference Of Opinion Regarding Capped Versus Uncapped Processors ............................. 6
2. Reilly Conveys His Concerns About Uncapped Processors And GSK Decides To Cap The Processors .................................................. 7
3. Reilly's Concerns Regarding Extended Access For Users ................................................... 10
C. GSK's Decision To Outsource The AS/400 Service And Eliminate The AS/400 Team .............................................. 10
D. After GSK Announces The Outsourcing, Reilly Makes A Complaint Through GSK's Employee Hotline, Expressing The Same Concerns Regarding The AS/400 He Previously Reported ................................................... 12
E. GSK Outsources The AS/400 Service And Eliminates The Existing AS/400 Analysts, Including Reilly ...................... 12
F. GSK's Compliance Manager Determines That Reilly's Complaints Are Unsubstantiated; Reilly Then Complains To GSK's CEO ................................................ 15
G. GSK's SEC Disclosures ................................................... 17
H. GSK Completes Its Investigation And Effectuates Reilly's Termination Consistent With Its Termination Of The Other Analysts Over Six Months Earlier ...................... 18
II. Procedural History .................................................................... 19
STANDARD OF REVIEW ................................................................. 23
SUMMARY OF ARGUMENT ............................................................ 23
ARGUMENT .................................................................................. 27
I. The District Court's Summary Judgment Order Should Be Affirmed Based On Either Or Both Of Two Independent And Equally Dispositive Failings In Reilly's Prima Facie Case .................... 27
A. Reilly Did Not Make Out A Prima Facie Case Because He Has No Evidence Showing That He Engaged In Protected Conduct .......................................................... 27
1. Based On The Undisputed Record, Reilly Did Not Establish That It Was Objectively Reasonable To Believe That His Complaints Concerned Fraud Or Violations Of Securities Law ................................................... 30
2. Reilly's Effort To Satisfy SOX's Protected Activity Element By Recasting His Complaints As Relating To GSK's Securities Disclosures Also Fails As A Matter Of Law ....................................................... 37
B. Reilly Failed To Establish A Prima Facie Case That His Complaints Were A Contributing Factor In GSK's Decision To Eliminate His Position ..................................... 46
1. Reilly's Unsupported Speculation Does Not Establish An Inference Of Causation ............................ 46
2. Even If Reilly Could Make Out An Inference Of Causation, Legitimate Intervening Events Destroy Any Such Inference .............................................................. 51
II. The District Court's Summary Judgment Decision Also Can Be Affirmed On The Ground That Reilly Did Not-And Cannot- Dispute GSK's Clear And Convincing Evidence Establishing That It Would Have Terminated Reilly Regardless Of His Complaints ............................................................................. 53
Complaints ............................................................................. 53
CONCLUSION................................................................................56
TABLE OF AUTHORITIES
Page(s) Cases
Adamson v. Multi Cmty. Diversified Servs., Inc., 514 F.3d 1136 (10th Cir. 2008) ..................................................... 49
Berckeley Inv. Grp., Ltd. v. Colkitt, 455 F.3d 195 (3d Cir. 2006) ......................................................... 22
Celotex Corp. v. Catrett, 477 U.S. 317 (1986) .............................................................. 22, 29
DiFiore v. CSL Behring, LLC, 879 F.3d 71 (3d Cir. 2018) ........................................................... 22
E.F. Operating Corp. v. Am. Bldgs., 993 F.2d 1046 (3d Cir. 1993) ........................................................ 22
Feldman v. Law Enf't Assocs. Corp., 752 F.3d 339 (4th Cir. 2014) ................................................... 50, 51
Hana Fin., Inc. v. Hana Bank, 135 S.Ct. 907 (2015) ................................................................. 29
Johnson v. Multi-Sols., Inc., 493 Fed.Appx. 289 (3d Cir. 2012) ............................................... 35, 36
Lamb v. Rockwell Automation, Inc., 249 F.Supp.3d 904 (E.D. Wis. 2017) .................................. 41, 42, 43
Lampkin v. Cohen, No. 00-CV-657, 2000 WL 1522851 (E.D. Pa. Oct. 12, 2000), aff'd, 33 Fed.Appx. 648 (3d Cir. 2002) ....................................... 48
Lawson v. FMR LLC, 571 U.S. 429 (2014) ................................................................... 31
Matrixx Initiative, Inc. v. Siracusano, 563 U.S. 27 (2011) .................................................................... 44
Powers v. Union Pacific Railroad Company, ARB Case No. 13-034, 2015 WL 1881001 (ARB March 20, 2015) ................................................................................50, 51
Resolution Trust Corp. v. Fid. & Deposit Co. of Md., 205 F.3d 615 (3d Cir. 2000) ......................................................... 22
Safarian v. Am. DG Energy Inc., 622 Fed.Appx. 149 (3d Cir. 2015) ............................................... 40, 41
Sylvester v. Parexel Int'l LLC, No. 07-123, 2011 WL 2517148 (ARB May 25, 2011) .......................... 39
Thomas v. Tyco International Management Co., LLC, 262 F.Supp.3d 1328 (S.D. Fla. 2017) ....................................... 44, 45
Westawski v. Merck & Co., 215 F.Supp.3d 412 (E.D. Pa. 2016) .............................................. 34
Westawski v. Merck & Co., 739 Fed.Appx. 150 (3d Cir. 2018) ............................................... passim
Wiest v. Lynch (“Wiest I”), 710 F.3d 121 (3d Cir. 2013) .................................................... passim
Wiest v. Tyco Elecs. Corp., No. 10-3288, 2015 WL 1636860 (E.D. Pa. Apr. 13, 2015), aff'd, 812 F.3d 319 (3d Cir. 2016) .................................................. 49
Wiest v. Tyco Elecs. Corp. (“Wiest II”), 812 F.3d 319 (3d Cir. 2016) .................................................... passim
Yue Yu v. McGrath, 597 Fed.Appx. 62 (3d Cir. 2014) ..................................................... 49
Statutes
18 U.S.C. § 1341 .......................................................................... 28
18 U.S.C. § 1343 .......................................................................... 28
18 U.S.C. § 1344 .......................................................................... 28
18 U.S.C. § 1348 .......................................................................... 28
18 U.S.C. § 1514A(a)(1) ............................................................ 27, 28
Regulations
29 C.F.R. § 1980.109(b) ................................................................. 53
Other Authorities
S. Rep. No. 107-146 (2002).............................................................. 31
PRELIMINARY STATEMENT
The district court entered summary judgment for Appellee GlaxoSmithKline LLC ("GSK") on the Sarbanes-Oxley ("SOX") whistleblower claims filed by Appellant Thomas Reilly ("Reilly"), a former IT analyst at GSK. That decision is correct. The material facts underlying Reilly's "whistleblower" claims and an application of controlling law to those undisputed facts show that Reilly's claims fail as a matter of law.
Reilly was responsible for designing, servicing, and troubleshooting GSK's AS/400 computing system, which is comprised of servers that host certain GSK financial and manufacturing software. For years, Reilly complained about a co-worker's decision to uncap processors on the AS/400 servers (which allowed servers to share one another's CPU and memory capacity), believing that uncapping could cause major business disruptions, something that never happened or even came close to happening. He also complained-in general, vague terms-about the possibility of security breaches with the AS/400. Reilly's employment with GSK ended when, as part of a larger reorganization and plan to discontinue use of the AS/400 system, GSK decided to outsource the servicing of the AS/400 and eliminate all of the then-existing analyst positions supporting that service, including Reilly's.
Based on these undisputed facts, Reilly contends that GSK violated SOX- a statute designed to protect shareholders from financial fraud and protect employees who report it from retaliation. As the district court explained, the undisputed material facts do not make out a prima facie case of SOX retaliation.
First, Reilly's complaints about server performance issues that did not rise to the level of triggering GSK's disaster protocol, and his doomsday speculations about problems that never came to pass, are not SOX-protected. SOX asks whether a public company engaged in mail, wire, bank, securities, or shareholder fraud or violated securities laws. And it protects employees who reasonably believe such a violation has occurred or is about to occur and report it.
Reilly points to no evidence showing that a reasonable person in his position would have believed that GSK engaged in any wrongdoing-let alone committed fraud or a violation of securities laws. Reilly's last-ditch effort to complain to GSK's CEO-after he was told he would shortly receive a final separation date-and to recast his complaints as relating to securities disclosures also fails. In this regard, he offers only conjecture about catastrophic business disruptions and fraudulent behavior, without a scintilla of evidence supporting his speculation. Without that evidence, Reilly cannot establish protected activity as a matter of law.
Second, Reilly points to no evidence of a causal link between his complaints and his job loss. To the contrary, it is uncontroverted that GSK outsourced the entire AS/400 service (and terminated three employees in addition to Reilly) because GSK was going to phase out the AS/400 since it was no longer compatible with different software chosen by the company. It strains reason to suggest that GSK would do that to cover up Reilly's former manager's supposed desire to terminate him. Even if Reilly had any evidence that his manager wanted to terminate him because of his complaints (which he does not), Reilly failed to refute GSK's legitimate business reasons for outsourcing the AS/400 service, which establish that GSK would have eliminated the service and Reilly's position regardless of his complaints.
This Court should affirm the district court's order entering summary judgment in favor of GSK.
STATEMENT OF THE ISSUES
Whether this Court should affirm the district court's order entering summary judgment in favor of GSK because Reilly pointed to no evidence to meet his prima facie burden to demonstrate that he made SOX-protected complaints?
SUGGESTED ANSWER: Yes.
Whether this Court should affirm the district court's order entering summary judgment in favor of GSK for the independent reason that Reilly pointed to no evidence to meet his prima facie burden to prove that his complaints were a contributing factor to GSK's decision to outsource the AS/400 service and eliminate all existing analyst positions, including Reilly's?
SUGGESTED ANSWER: Yes.
Whether this Court should affirm the district court's order granting summary judgment in favor of GSK because, even if Reilly could make out a prima facie case, Reilly did not dispute GSK's clear and convincing evidence that it would have outsourced the AS/400 service and eliminated his position regardless of Reilly's alleged protected conduct?
SUGGESTED ANSWER: Yes.
STATEMENT OF THE CASE
I. Factual Background
The following record facts are undisputed.
A. Reilly's Employment With GSK's AS/400 Service Team
From 1999 to 2015, GSK employed Reilly as an analyst and, starting in 2003, a Senior Consultant on the AS/400 service team ("AS/400 Team"). JA83. The AS/400 (or iSeries) is a computer operating system manufactured by IBM that hosts the applications supporting portions of GSK's financial processing and manufacturing. JA140, 151, 154-155, 177, 185-186. The AS/400 Team was responsible for maintaining the AS/400 operating systems and remediating performance and other issues as they occurred or were identified. JA186. Reilly's job included configuring GSK's servers to honor GSK's internal security controls, but he did not have responsibility for developing such controls. JA87.
GSK has a system that continuously backs up all information on the AS/400 so that GSK can rebuild the system without the loss of information if disaster were to strike. JA186. GSK defines "disaster" as a continuous outage of 24 hours or more. Id. During the time period in which Reilly made complaints, GSK never had a server shutdown that reached the 24-hour recovery point and GSK never had to use its disaster recovery procedure due to issues with the AS/400 server. JA165, 198-199.
Before 2012, Reilly and his AS/400 Team colleagues reported to AS/400 Service Manager Brian Gillies. JA83-84. In or around 2012, Jo Taylor became the AS/400 Service Manager. JA83-85, 151-152. Taylor reported to Steve Miller (Vice President of Enterprise Systems and Technologies). JA136, 153. During Taylor's time as Manager (from 2012-2015), the AS/400 Team was comprised of Reilly, Rick Oberholzer, Dan Mong, Mike Bacon, and Steve Farnden. JA152-153, 174. Reilly, Oberholzer, and Mong worked in the U.S., and Bacon and Farnden worked in the U.K. with Taylor. JA153, 174. Each member was an iSeries Service Analyst, with Reilly holding a senior role. JA153.
B. Reilly's Concerns Regarding The AS/400
Beginning in or around 2011, Reilly complained about what he called "[s]erious security exposures [and] performance problems" with the AS/400. JA84, 88-89, 210-243, 416-417. His concerns included the decision to uncap the AS/400 processors and what he perceived as resulting performance issues. Id.
1. Reilly's Difference Of Opinion Regarding Capped Versus Uncapped Processors
In 2011, Reilly's co-worker, Oberholzer, "enabled something called uncapped processors." JA88. Uncapping processors allows one server to use CPU capacity from another server if capacity is available. JA89. Reilly preferred "capped" processors (where each server has its own dedicated memory and CPU) instead of "uncapped" processors (which allow a server to use available CPU capacity and memory from another server). JA89, 160, 177. Although Reilly acknowledged that uncapping the processors would provide more CPU capacity, he believed that uncapped processors would cause the memory component to "thrash" or "lock up." JA89. According to Reilly, uncapping the processors resulted in the AS/400 servers becoming "destabilized"-meaning "bad performance" and "corrupted data." JA93-94.
When asked what he meant by "corrupted data," Reilly, consistent with his inability to provide evidence to support his case, gave the vague response that it could mean a "lot of different things," without further elaboration. JA94.
2. Reilly Conveys His Concerns About Uncapped Processors And GSK Decides To Cap The Processors
In April 2012, Reilly emailed Taylor sharing his concerns regarding AS/400 server performance. JA484-485. Then, in response to his annual review in December 2012, Reilly documented similar complaints to Taylor, stating that he had "provided documented proof that server performance is horrendous but [he had] no credibility and [could not] convince anyone to listen." JA215.
Shortly thereafter, on January 10, 2013, Taylor put Reilly in charge of an issue relating to "poor performance" on GSK's AS/400 India server, after a GSK employee in India complained about "screen to screen time lag." JA99-100, 220-229. The next day, Reilly emailed Taylor with his analysis of the issue and his opinion that the uncapped processors caused the server performance issues. JA220-228. Two days after that, Taylor responded that it "was IBM's recommendation to turn on Shared Processors, so [she] would like IBM to review this data and work with [Reilly] to resolve" the issue. JA220. In the meantime, Taylor directed the AS/400 Team to monitor the server response times over a 24-hour period and said that she would "authorise turning the shared processing off" if performance issues persisted during a full 24 hours. Id. In his deposition, Reilly claimed that a server shutdown could have happened, but admits he does not know whether GSK's servers-specifically those relating to financial reporting-were ever compromised. JA122, 165.
On January 15, 2013, Reilly again spoke to Taylor about performance issues, claiming that "memory faulting, disk arm utilization, and end user response time are out of range and unacceptable." JA487. Then, on January 23, 2013, Reilly forwarded a report on AS/400 performance issues to Miller (Taylor's boss), which summarized the issues regarding "CPU, Memory, and Disk Arm utilization." JA145-146, 231-243.
On February 18, 2013, an IBM representative emailed Reilly and informed him that "[r]egarding uncapped verses capped [processors,] there is no right or wrong answer. It depends on the workload and what other resources are assigned. If you choose to run uncapped the demand for memory and IO will increase as processor [use] is added. My suggestion would be to increase memory for the LPAR." JA246. Taylor asked the IBM representative to identify the individual at IBM who had recommended uncapping the processors. The representative told Taylor (copying Reilly) that he was not sure who gave the recommendation, but that he would not have suggested it. JA249-252.
Taylor decided to cap the processors on or about April 15, 2013, and put Reilly in charge of the recapping. JA97, 160, 254. Taylor sent an email to the AS/400 Team informing them of the decision, noting the differences of opinion among team members and stating: "I know that this issue has been very emotive over the last year and some of you will be unhappy with this decision, however a decision has to be made and a direction set in order to bring closure to this." JA254.
After the servers that supported India were recapped, the same employee who had complained about lag time when the processers were uncapped complained about performance again, stating that he believed "it is something to do with the processor feature which we disabled." JA256-264. India employees pointed out that-after the processors were recapped consistent with Reilly's recommendation-there were two to three hour delays in generating invoices and that trucks could not be released due to the slow lag time. JA261-262. As a result, a GSK employee in India asked Reilly and Taylor if the processors could be "reverse[d]" and uncapped again. Taylor stood behind Reilly's recommended approach and responded that GSK would not reverse its decision. JA256.
3. Reilly's Concerns Regarding Extended Access For Users
In 2013, Reilly also complained about AS/400 "users that are identified as having more authority than the standard or [GSK's] system access management plan would" allow. JA95, 164. In response, Taylor put Reilly in charge of addressing any privilege access risk that might exist (i.e., the risk that someone could do something malicious as a result of excessive authority) relating to the AS/400-making him responsible for leading the team and closing off the risk. JA95-96.
On October 8, 2013, Taylor informed Reilly that she was disappointed he was unable to close the risk. Taylor then took over the effort and closed off the risk. JA169-170, 266-270.
C. GSK's Decision To Outsource The AS/400 Service And Eliminate The AS/400 Team
In 2013, Miller (VP of Enterprise Systems and Technologies) led a team that developed a strategy for discontinuing use of the AS/400 system because it no longer was a strategic system. JA144, 185-186. The AS/400 was not capable of hosting enterprise software (known as "SAP") that GSK planned to use going forward on all of its computer systems and, as a result, GSK decided to phase out the AS/400 and migrate to a system capable of supporting SAP, a migration that is still ongoing. JA135-136, 144, 186, 197, 704-727. As part of the transition, Miller recommended that GSK outsource responsibility for servicing the AS/400 to leverage the agility and skills of a third-party vendor. JA144, 186.
In January 2014, GSK reorganized its global End User and Infrastructure Services ("EIS") Department (of which the AS/400 Team was a part) into IT Hosting Services-a separate department. JA161-162, 186-187, 272-273, 728769. As part of the reorganization, Miller implemented his recommendation to outsource the AS/400 service to a third-party vendor. JA186. Taylor and Mong assisted in the Request For Proposal process used to select the vendor. JA102-103, 161. None of the other AS/400 Team members (Reilly, Oberholzer, Bacon, and Farnden) were involved. JA102-104. GSK ultimately selected Blue Chip (an IT service provider in the U.K.) as the vendor; it remains the vendor today. JA186. Blue Chip uncapped all of the processors and added memory, and there have been no performance issues with the AS/400. JA194.
As a result of the outsourcing, GSK eliminated all of the existing AS/400 Team analyst positions. JA187. It retained the manager position, then occupied by Taylor, so that someone would be in place to manage the relationship with the new third-party vendor and created a new analyst position to support Taylor in coordinating with the vendor. JA104, 137, 159, 162, 186-187, 728-769.
D. After GSK Announces The Outsourcing, Reilly Makes A Complaint Through GSK's Employee Hotline, Expressing The Same Concerns Regarding The AS/400 He Previously Reported
After the outsourcing was announced, Reilly emailed GSK's "Speak Up" line (an employee hotline) and provided 14 printed pages of complaints covering his entire tenure at GSK. JA278-291, 296. Reilly said he was "forced to go into great detail below because of the intense hostility, harassment and character assassination [he's] endured over the past 14 years when attempting to prevent these issues ...." JA278. Reilly's complaint reiterated past issues with his colleague Oberholzer and repeated his concerns regarding AS/400 performance issues. JA278-291. He also raised the AS/400 outsourcing and stated that he "believe[d] that there's a strategy of outsourcing the problem ...." JA286. GSK assigned Michael Woods, a GSK Compliance Manager with responsibility over IT and HR, to investigate Reilly's complaints. JA294-296.
E. GSK Outsources The AS/400 Service And Eliminates The Existing AS/400 Analysts, Including Reilly
In March 2014, GSK announced to the AS/400 Team members, including Reilly, that their positions would be eliminated as part of the EIS reorganization. JA104, 106-107, 272-273. GSK decided to fill the new analyst role from a closed pool consisting of the three U.S.-based team members (Reilly, Oberholzer and Mong). JA182, 187. Those interested in the position had to apply for it and only the person selected would be retained. JA107, 109-113, 306-311.
Taylor went out on adoption leave from mid-April 2014 to mid-January 2015. JA150. During that time, Miller and Steven Jeffrey, who reported to Miller, decided that Henry Bolton would take over Taylor's responsibilities. JA136, 138, 150, 173. Because the newly created analyst position would represent a downgrade for Reilly, as his salary band at the time was higher than the band set for the new position (JA110, 176, 187), Bolton asked HR to clarify whether Reilly was permitted to apply for the position. JA176. HR told Bolton that Reilly could decide for himself whether he wanted to apply for the position. Id. On May 6, 2014, Bolton told the AS/400 Team that the termination date for the unsuccessful candidates in the U.S. closed pool for the new analyst position would be September 28, 2014. JA109-110, 310.
At first, Reilly wanted to be included in the pool and understood that his position would be eliminated if he did not get the job-just like all U.S. AS/400 Team members. JA109-113, 306-311. He later changed his mind and declined to be considered for the position. JA109-111, 182, 187, 306. Reilly testified that he changed his mind because he believed Woods could save his job depending on the outcome of the investigation. JA110-113. Yet, Reilly admitted that Woods never told him that his position would not be eliminated:
Q. Did Michael Woods ever tell you that GSK couldn't eliminate your position during the outsourcing just because you had made complaints to the company?
A. No. Michael Woods told me that he took my allegations seriously, and he covered the safeguarding and told me that I could not be wrongfully terminated.
JA107 (emphasis added).
By "safeguarding," Reilly was referring to GSK's "Safeguarding GSK Employees Who Report Unethical or Illegal Conduct" Policy, which covers antiretaliation. JA115, 127, 313-319. The Policy "prohibit[s] retaliation against employees who raise concerns." JA314. The Policy, however, does not state that GSK will keep and/or find a job for an employee whose job has been eliminated for reasons unrelated to his/her complaints if his/her complaints are substantiated. JA313-319.
Bolton selected Dan Mong for the new analyst role. JA159, 175, 187. Taylor learned of the decision when she returned from adoption leave. JA159. On or about July 8, 2014-before the scheduled date for the elimination of his position-Reilly went out on disability leave. JA114, 273. As a result of the decision to outsource to Blue Chip, GSK eliminated the existing analyst positions and terminated Oberholzer and the two U.K.-based team members in October 2014. JA162, 181, 187. Because Reilly was on short-term disability leave, GSK postponed the official notification of his separation. JA114-115, 181, 273.
F. GSK's Compliance Manager Determines That Reilly's Complaints Are Unsubstantiated; Reilly Then Complains To GSK's CEO
Based on his investigation, Woods determined that:
• GSK was phasing out the AS/400 system over the next several years in favor of company-wide strategic solutions; therefore support for the AS/400 would be outsourced.
• "Outside of Tom Reilly's allegation, there was no evidence suggesting that the outsourcing is driven by any non-business considerations."
• Reilly's "allegation of a significant risk of failure that may lead to very significant interruption of the GSK business is not substantiated, but there are some aspects of access management and privileges which should be reviewed and remediated if found to be overly broad."
• "While there are configuration and performance issues, a review of the history of incidents on the AS/400 hardware, as well as discussions with staff and management, found no indication of systemic issues that would cause or suggest a systemic issue that may cause a catastrophic failure of services."
JA299-302, 773, 777.
After Reilly returned from disability leave on January 2, 2015, GSK informed him that he would receive his notice of separation on January 23, 2015, in accordance with his prior job elimination. JA119, 273, 276, 326. After that, on January 15, 2015, Reilly sent an email to Andrew Witty, the Company's CEO. JA118, 323-331. In that email, Reilly reiterated his prior complaints:
Over the past few years I've been unable to stop misconduct and dereliction of duty which has led to these serious computer quality control violations, systemic security non-compliance, global computer fleet instability, interface interruptions and resulting chaos management. These problems relate not only to stability, quality control and compliance of the AS400 computer systems but also the global supply chain interfaces and integrity of the manufacturing and financial data being hosted on these servers. This could eventually lead to drug manufacturing quality problems, financial data irregularities and even more FDA penalties against GSK.JA323 (emphasis added).
Reilly added that he "took time to review [GSK's] 2013 Annual Report which makes no reference to any of these serious performance, security, quality, compliance issues, risk management or corporate responsibility deficiencies so I suspect that the internal reporting channels have not made the people who sign off on the annual report aware of these issues which also puts them at risk." JA325. For the first time, Reilly contended that the risks he complained about should have been, but were not, disclosed on GSK's 2013 and 2014 Form 20-F Reports and shareholder disclosures. Id.; see also ECF No. 1 (Complaint) ¶¶ 54, 61.
In his email to Witty, Reilly acknowledged that he "recently returned from 6 months of workplace stress related short term disability and was informed by [his] manager and HR that [he'll] be receiving a termination letter on 23 January 2015 as a result of the outsourcing initiative, be terminated from the company 60 days later and receive a severance package." JA326.
In response to Reilly's email, GSK conducted another investigation into Reilly's complaints including his new complaint about GSK's Annual Reports. JA323-331, 337-338. GSK informed Reilly that his January 23, 2015 notice of separation had been postponed and that he was being placed on paid administrative leave while GSK fully investigated the claims. JA119, 273, 276.
G. GSK's SEC Disclosures
The Form 20-F-part of GSK's Annual Report to the SEC-provides certifications as to "internal controls over financial reporting." JA356, 370-371. GSK's CEO, Andrew Witty, certified the 2013 Form 20-F on February 28, 2014 and certified the 2014 Form 20-F on February 27, 2015. Id. The 2013 and 2014 20-F Reports identify numerous risk impacts including, specifically:
Risk impact
Failure to adequately protect critical and sensitive systems and information may result in our inability to maintain patent rights, loss of commercial or strategic advantage, damage to our reputation or business disruption including litigation or regulatory sanction and fines, which could materially and adversely affect our financial results.
Context
We rely on critical and sensitive systems and data, such as corporate strategic plans, sensitive personally identifiable information, intellectual property, manufacturing systems and trade secrets. There is the potential that malicious or careless actions expose our computer systems or information to misuse or unauthorised disclosure.JA355, 369.
In addition, GSK disclosed the "[r]isk to the Group's business activity if critical or sensitive computer systems ... are not available when needed, are accessed by those not authorized, or are deliberately changed or corrupted." JA355, 368. Reilly testified that he believes GSK's disclosures were not adequate because, according to him, GSK must disclose when a computer "goes down for an hour and comes back up once a week for a year," even though he doesn't know if that occurred here and should have known that GSK would not have deemed such a service failure to be material. JA122, 124-125, 165, 186, 198199.
H. GSK Completes Its Investigation And Effectuates Reilly's Termination Consistent With Its Termination Of The Other Analysts Over Six Months Earlier
After its investigation was complete, GSK informed Reilly that it had concluded that his complaints regarding the AS/400 systems were unfounded. JA339. On April 8, 2015-six months after the other analysts were terminated- Jason Lord (Director of Corporate Investigations) emailed Reilly and informed him that, based on the prior organizational change, his "official notification of separation from GSK is 8th April 2015 (sic)." JA336, 340-341, 377. Reilly's last day of employment was June 30, 2015. JA128-129.
II. Procedural History
Reilly filed a SOX whistleblower complaint with the Occupational Safety and Health Administration on July 20, 2015. JA45-55. On September 6, 2016, after the parties submitted their positions, the Secretary of Labor agreed with GSK that Reilly's SOX Complaint was untimely and dismissed the complaint. JA57-60.
On October 7, 2016, Reilly appealed the Secretary's Findings to an Administrative Law Judge. GSK again moved to dismiss the SOX Complaint as untimely. On February 22, 2017, the ALJ issued an Order granting GSK's motion. JA62-80. On March 3, 2017, Reilly filed a Petition for Review of the ALJ's decision with the Administrative Review Board. Before the ARB ruled, Reilly filed his federal court complaint in this matter on May 4, 2017. ECF No. 1.
On July 10, 2017, GSK moved to dismiss Reilly's complaint, arguing both that the claims were untimely and that Reilly failed to allege a protected activity under SOX. See ECF No. 7. On October 25, 2017, the district court denied GSK's motion, stating that the protected activity issue was a "close call" and that Reilly's claim "barely survive[d]." ECF No. 13.
After completion of discovery, GSK moved for summary judgment. ECF Nos. 33, 40. GSK again argued that Reilly's SOX Complaint was untimely and also that the undisputed material facts established that Reilly could not make out a prima facie case of retaliation under SOX for two independent reasons: (1) there is no evidence showing that Reilly ever complained about fraud or a violation of securities law and, therefore, he did not engage in protected conduct as matter of law; and (2) there is no evidence of a causal link between Reilly's alleged protected conduct and GSK's decision to eliminate his position. Id. GSK also argued that even if Reilly could make out a prima facie case, he had no evidence refuting GSK's clear and convincing evidence that it would have eliminated Reilly's position regardless of his alleged complaints. Id.
The district court granted GSK's motion. Relying on this Court's controlling precedent, the court held that "Reilly has not established facts showing that his complaints about computer security were even remotely related to fraud of any kind ... [and, relative to his later complaints regarding SEC disclosures,] [n]o factfinder could find [Reilly's] belief that GSK violated SOX by not naming precise server issues to be objectively reasonable." JA36.
Although the district court ended its legal analysis there-awarding summary judgment for GSK-the court's discussion of the undisputed evidence confirms that Reilly's job was eliminated due to GSK's decision to outsource the AS/400 service, not his complaints:
• In March 2014 GSK announced the outsourcing and, at that time, Reilly was informed that every AS/400 analyst position would be eliminated, that Jo Taylor would remain as manager to coordinate with the outside vendor, and that a new analyst position would be created to assist Taylor with that coordination.
• "On May 6, 2014, Henry Bolton ("Bolton") (then the acting AS/400 Service Manager while Ms. Taylor was out on leave), informed the AS/400 Team that pursuant to the outsourcing, any AS/400 Team members who were not selected for the [newly created] Analyst position would be terminated, effective September 28th, 2014."
• Reilly "testified that he was informed by GSK that if he chose not to apply for the [new] Analyst role, he would be 'agreeing to be let go,' as was also the case for his AS/400 Team co-workers, Mike Bacon, Steve Farden, and Rick Oberholzer.... Nonetheless, Mr. Reilly decided not to apply for the Analyst position."
• After Reilly's termination was postponed due to his short-term disability leave and to investigate his complaint to GSK's CEO, GSK notified Reilly "that based on the outsourcing of the AS/400 Team" his employment had been terminated, effective June 30, 2015.JA13-14, 16-17; see also JA13, 104, 107, 109-110, 136-139, 175, 186-187, 272-273, 306-311, 728-769.
STANDARD OF REVIEW
This Court reviews a district court's grant of summary judgment "de novo." DiFiore v. CSL Behring, LLC, 879 F.3d 71, 75 (3d Cir. 2018). As such, this Court may affirm the judgment on any grounds argued below, even if the district court did not rely on those grounds. Resolution Trust Corp. v. Fid. &Deposit Co. of Md., 205 F.3d 615, 635 (3d Cir. 2000) (citing E.F. Operating Corp. v. Am. Bldgs., 993 F.2d 1046, 1048 (3d Cir. 1993)).
At the summary judgment stage, "the burden on the moving party may be discharged by 'showing'-that is, pointing out to the district court-that there is an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986) (emphasis added). Then, to survive summary judgment, a plaintiff must "make a showing sufficient to establish the existence of an element essential to [his] case, and on which [he] will bear the burden of proof at trial." Id. at 322-323. Summary judgment "against a party who fails to make [that] showing" is required. Id.
As this Court has aptly stated, "summary judgment is essentially 'put up or shut up' time for the non-moving party." Wiest v. Tyco Elecs. Corp. ("Wiest II"), 812 F.3d 319, 330 (3d Cir. 2016) (citing Berckeley Inv. Grp., Ltd. v. Colkitt, 455 F.3d 195, 201 (3d Cir. 2006)). Here, as the record demonstrates, Reilly did not "put up."
SUMMARY OF ARGUMENT
SOX's whistleblower provision is intended to protect employees who report fraud or a violation of an SEC rule or regulation. To make out a prima facie case of SOX retaliation, the plaintiff must prove that he engaged in a protected activity and that his protected activity was a contributing factor to an adverse action (e.g., termination of the plaintiff's employment). Reilly could not prove either-and thus his claims failed as a matter of law for each of those independent reasons.
An activity is SOX-protected when the employee has a subjective belief that also is an objectively reasonable belief that the conduct he reports constitutes fraud or an SEC violation. Here, Reilly's complaints fell into two categories- neither of which, as a matter of law, amounts to SOX-protected activity. As to the first category, he complained about computer instability and security issues (i.e., extended user access) related to the AS/400 and, in particular, his concern that GSK's decision to uncap processors on the AS/400 servers might lead to a catastrophic business disruption. The problem for Reilly is that (1) there is no evidence that the decisions GSK made relating to uncapping processors and user access were improper in any way-much less fraudulent or a violation of an SEC rule or regulation; and (2) there is no evidence that the business disruption he speculated might occur actually did occur or was even reasonably likely to occur. In fact, the undisputed evidence contradicts Reilly's SOX liability contentions- showing, as a matter of law, that it was objectively unreasonable for an IT specialist with Reilly's training and experience to believe that server performance causing computer lag time somehow constituted a violation of SOX. Thus, Reilly's complaints do not even get out of the starting gate.
Reilly's second category of complaints-articulated after he learned he would soon receive his termination date-likewise do not amount to SOX-protected activity. After GSK announced that Reilly's job would be eliminated as a result of third-party vendor outsourcing and that his last day at GSK was approaching, Reilly-for the first time-stated to GSK's CEO that he believed GSK's securities disclosures were inaccurate because GSK did not specifically disclose the alleged IT risks that were the subject of Reilly's earlier complaints. This is not protected activity because Reilly has no evidence that there was anything GSK should have disclosed but did not.
This Court has ruled on cases involving circumstances like these- uniformly rejecting the plaintiffs' SOX liability theories. Like the plaintiffs in those cases, Reilly failed to establish SOX-protected complaints because he could not prove that it was reasonable for him to believe that GSK had a duty to report on its SEC disclosures the types of purported computer issues or business disruption about which he was complaining-and that it was committing fraud or violating SEC rules or regulations by not doing so. Based on this lack of evidence, the district court correctly held that Reilly "has not established facts showing that his complaints about computer security were even remotely related to fraud of any kind ... [and they are] 'far too attenuated from the welfare of the shareholders to fall within the SOX ken.'" JA36. Reilly's failure to prove that he engaged in protected activity is reason enough to affirm.
Reilly's case also suffers from a lack of evidence on another element of the prima facie case of SOX retaliation. Reilly had the burden of showing that his complaints were a contributing factor to GSK's decision to terminate his employment. As the district court found, it is undisputed that (1) GSK outsourced the AS/400 service to a third-party vendor, which resulted in GSK eliminating all the existing AS/400 analyst positions, including Reilly's, keeping only a manager position and creating a new lower level analyst position to serve as a liaison with the new vendor; and (2) Reilly was offered, but declined, an opportunity to apply for the new position.
In response to that irrefutable evidence-fatal to his case-Reilly characterizes the outsourcing as "selective" and speculates that his supervisor was "frustrated" with his complaints. Without more, those arguments are insufficient to withstand summary judgment because, even if true, Reilly has no evidence linking any alleged frustration (or his complaints) to GSK's decision to outsource the AS/400 service and his resulting termination. And even if Reilly had evidence giving rise to an inference of some connection between his complaints and his termination, he still failed to meet his burden as a matter of law because legitimate intervening events-including GSK's decision to terminate all analyst positions and the length of time GSK permitted Reilly to remain employed after his complaints-destroy any causal connection. This is a separate and independent flaw in Reilly's prima facie case and another reason to affirm.
Finally, even if Reilly could make out a prima facie case, GSK still is entitled to summary judgment because the clear and convincing record evidence satisfied GSK's burden to show that Reilly would have been terminated regardless of his complaints and Reilly had no evidence rebutting this. This, too, is a reason to affirm.
ARGUMENT
I. The District Court's Summary Judgment Order Should Be Affirmed Based On Either Or Both Of Two Independent And Equally Dispositive Failings In Reilly's Prima Facie Case
"Section 806 of [SOX] provides corporate employees protection from retaliation by their employers for reporting fraud or a violation of an SEC rule or regulation by a covered company or one of its employees." JA19 (citing 18 U.S.C. § 1514A(a)(1) and Wiest v. Lynch ("Wiest I"), 710 F.3d 121, 129 (3d Cir. 2013)) (emphasis added). Under controlling law, to withstand summary judgment, Reilly had the burden of producing evidence on each of the following essential elements of a prima facie case: "(1) [Reilly] engaged in a protected activity; (2) [GSK] knew or suspected that [Reilly] engaged in the protected activity; (3) [Reilly] suffered an adverse action; and (4) [t]he circumstances were sufficient to raise the inference that the protected activity was a contributing factor in the adverse action." Wiest I, 710 F.3d at 129. As explained below, the undisputed record confirms Reilly failed to meet his evidentiary burden. The district court's decision should be affirmed.
A. Reilly Did Not Make Out A Prima Facie Case Because He Has No Evidence Showing That He Engaged In Protected Conduct
"For [his] anti-retaliation claim to survive summary judgment, [Reilly] 'must identify evidence in the record from which a jury could deduce ... [he] engaged in a protected activity' under Section 806." Westawski v. Merck &Co., 739 Fed.Appx. 150, 152 (3d Cir. 2018) (quoting Wiest II, 812 F.3d at 329). He did not meet that burden.
SOX does not provide protection to employees who lodge general complaints, but instead protects those who complain about fraud. Id. at 153. Thus, to satisfy the first element of his prima facie case-that he engaged in protected activity-Reilly needed to show that he had both a subjective belief and an objectively reasonable belief that the conduct he complained about constituted a violation of relevant law. Wiest I, 710 F.3d at 139. That means he had to provide record evidence that the conduct he complained about amounted to (or reasonably could be believed to amount to) a violation of: (1) 18 U.S.C. §§ 1341 (mail fraud), 1343 (wire fraud), 1344 (bank fraud), or 1348 (securities fraud); (2) any rule or regulation of the SEC; or (3) any provision of Federal law relating to fraud against shareholders. 18 U.S.C. § 1514A(a)(1).
A belief is objectively reasonable "when a reasonable person with the same training and experience as the employee would believe that the conduct implicated in the employee's communication could rise to the level of a violation of one of the enumerated provisions in Section 806." Wiest I, 710 F.3d at 132.
Reilly does not even try to explain-with reference to the evidence and controlling law-how he meets this standard. Instead, he simply asserts that the issue of whether he reasonably believed he was complaining about SOX-protected fraud or violations is best left to a jury. Appellant's Opening Brief ("AOB") 23. The only thing Reilly points to in support of that blanket assertion is a footnote in a Supreme Court trademark infringement decision, in which the Court noted that the "tacking inquiry" (i.e., comparing two trademarks), "involves a factual judgment about whether two marks give the same impression to consumers." Hana Fin., Inc. v. Hana Bank, 135 S.Ct. 907, 912 n.2 (2015). That inapposite case law does not rescue Reilly's claims.
Whether Reilly's claims can get to a jury is governed by the Supreme Court's well-settled summary judgment standard, establishing that summary judgment is required "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case." Celotex, 477 U.S. at 322. Reilly failed to make that required showing.
Without citation to the record, Reilly tries to recast his complaints as complaints of "deficient information security controls" related to financial processing (see AOB 20). But the record evidence, including Reilly's own statement of facts, undisputedly reveals what Reilly complained about-and those complaints as a matter of law are not SOX-protected activity:
• Reilly expressed his difference of opinion regarding the decision to enable uncapped processors on GSK's AS/400 servers and the
resulting impact relating to computer instability. JA84, 89-90, 93-94, 97, 122, 124-125, 147, 160, 177, 192-194, 254; ECF No. 1 ¶¶ 54, 61; AOB 7-10.
• Reilly claimed that certain unidentified GSK personnel-at points in time-had extended access privileges to the AS/400 server and could potentially do something malicious with that access. JA84, 95-96, 164; AOB 11-12.
• In January 2015-long after GSK eliminated his position-Reilly claimed that the alleged computer instability and security issues should have been disclosed in GSK's SEC certifications. JA323-331; AOB 14-17.
As explained below, the district court correctly concluded that those complaints do not fall within SOX's purview and were not "even remotely related to fraud of any kind." JA36.
1. Based On The Undisputed Record, Reilly Did Not Establish That It Was Objectively Reasonable To Believe That His Complaints Concerned Fraud Or Violations Of Securities Law
As this Court has made clear, "[a]lthough a plaintiff is not required to show 'a reasonable belief that each element of a listed anti-fraud law is satisfied,' [he] must still 'have an objectively reasonable belief of a violation of one of the listed federal laws. '" Westawski, 739 Fed.Appx. at 152 (quoting Wiest 1, 710 F.3d at 132). That is because "[i]t is common ground that Congress installed whistleblower protection in the Sarbanes-Oxley Act as one means to ward off another Enron debacle" and is "aimed at controlling the conduct of accountants, auditors, and lawyers who work with public companies." Lawson v. FMR LLC, 571 U.S. 429, 434, 447 (2014) (citing S. Rep. No. 107-146, at 2-11 (2002)). Here, an application of the controlling legal standard set forth in Westawski- which aligns with Lawson-shows that Reilly's complaints are "disconnected from [the] shareholder fraud" SOX is designed to protect. JA35.
First, Reilly failed to meet his burden because he did not point to evidence showing that he was complaining about any fraud or wrongdoing, let alone SOX-reportable fraud. Reilly argues that his complaints are SOX-protected because the AS/400 supports portions of GSK's financial processing and critical business operations. AOB 7, 10. But that alone does not place Reilly's complaints within SOX's purview. If it did, an employee's difference of opinion about which antivirus software a company uses for certain computers would be protected conduct just because those computers support a company's accounting or financial processes. This would mean that SOX protection applies to complaints about any number of day-to-day IT and operational decisions. That is not what the statute says.
Although Reilly asserts that the district court "inappropriately weighed the credibility of [ ] GSK's witnesses," he points to nothing in the court's opinion to support that conclusory statement. See AOB 5. The district court did not weigh evidence or make credibility determinations-instead, Reilly had no evidence to contradict GSK's witnesses.
Indeed, it is plain that Congress did not intend SOX to reach that far. As this Court has recognized, although a plaintiff's complaint need not "'definitively and specifically' relate to a statute or rule listed in § 806," it must still "relate in an understandable way" to one of the forms of fraud enumerated in the statute. Wiest I, 710 F.3d at 133-34. Just like the plaintiff in Westawski, Reilly "fails to explain how" his complaints regarding AS/400 performance issues "[are about] fraud." Westawski, 739 Fed.Appx. at 152; JA35.
Reilly's complaints about uncapped processors were simply a difference of opinion on an IT issue-and one that did not actually impact or threaten to impact the company in a material way. JA84, 89-90, 93-94, 97, 122, 124-125, 147, 160, 165, 177, 192-194, 198-199, 254. And, as Reilly's brief confirms (AOB 9), the undisputed record establishes that Reilly's supervisor, Taylor, actually worked with Reilly to get IBM's input and then decided to cap all processors-exactly what Reilly wanted. JA97, 160, 254. In an effort to create an inference of impropriety on the part of Taylor by claiming that she misunderstood IBM's advice, Reilly points to an email from an IBM representative (AOB 9) informing Taylor that "I would have not suggested [uncapped processors]." JA496. That email does not help Reilly for two reasons.
As a threshold matter, the record reveals that the IBM representative sent that email after he informed Taylor and Reilly that "[regarding uncapped verses capped [processors,] there is no right or wrong answer" and that he could not figure out who at IBM made the initial recommendation to uncap the processors. JA246, 249-252. And, in any event, there is nothing in the record connecting any difference of opinion about capping or uncapping the processors to a violation of a GSK policy-much less to fraud or a violation of securities laws.
The same goes for Reilly's purported complaints about "security of [GSK] manufacturing and financial reporting systems," which he contends was in "ruins." AOB 17; JA122. While Reilly's brief throws around phrases like "compromised security" (AOB 2), "debilitating computer security" (id. at 3), general "security issues" (id. at 10-11), and states that "security is a disaster" (id. at 12), he has no evidence supporting these doomsday assertions or, dispositive here, remotely suggesting SOX wrongdoing on the part of GSK.
Moreover, Reilly does not (and cannot) dispute that GSK remediated privilege access issues across all servers. JA163-164, 166-167, 169-170, 266-270.
This Court has long-recognized that complaints that do not relate to illegal conduct or fraud do not fall within SOX's purview. Westawski, 739 Fed.Appx. at 152-53; Wiest I, 710 F.3d at 137. Westawski illustrates this principle. The plaintiff in that case "repeatedly complained to her supervisor and other managers about procedural irregularities concerning" her employer's relationship with an outside market research firm, "including that her supervisor directed her not to conduct [her employer's] usual bidding process" and "paid nearly double the standard amounts" for the firm's work. Westawski, 739 Fed.Appx. at 151. This Court correctly held that, even assuming the plaintiff's complaints were accurate and that the employer was paying the firm a premium of some kind, the plaintiff simply "fail[ed] to explain how that is fraud." Id. at 152.
The same goes here. Even if Reilly's complaints were accurate, he did not engage in protected conduct as a matter of law because he identified "no prohibition on" the conduct about which he complained, "let alone a prohibition within the scope of [SOX]." Westawski, 739 Fed.Appx. at 152; see also Westawski v. Merck &Co., 215 F.Supp.3d 412, 427-29 (E.D. Pa. 2016). For that reason alone, his complaints are not protected.
Nor does Reilly's invocation of an audit entirely unrelated to his complaints establish protected conduct. Although not mentioned anywhere in the argument section of his brief (likely because it is immaterial), Reilly points to an email exchange between Taylor and Reilly relating to a PWC audit. AOB 8. Contrary to what Reilly tries to suggest, his email was not about a "physical security and data integrity audit"-but instead was about the same instability issues he had always brought up. Indeed, Reilly's record citation omits the entirety of Taylor's testimony, which explains the distinction clearly: "So the subject of the email (continued on next page) was notification of a physical security and data integrity audit [in Panama]. However, the subject of [Reilly's] email is around performance issues across multiple systems that have nothing to do with the Panama audit." JA479. As such, Taylor advised Reilly that any performance issues should be discussed "on another day"-not ignored, as Reilly tries to suggest. JA487.
Second, as the district court correctly concluded, the undisputed evidence establishes that the issues Reilly speculated might arise-system problems that would materially impact the company's bottom line-never actually occurred, nor were they about to occur. Like his district court arguments, Reilly's arguments here rely on only his deposition testimony to support his assertion that "[a]s a result of the processors being uncapped, orders from large GSK clients like Wal-Mart were being lost and GSK users around the world had their workstations lock up." AOB 8-9, citing JA402-403. Reilly, however, has no evidence to support his surmise. He admitted that it was only his "understanding that orders were lost," and that he did not know how long the servers "locked up." JA403-404. His testimony, therefore, could not defeat summary judgment. Johnson v. Multi-Sols., Inc., 493 Fed.Appx. 289, 292 (3d Cir. 2012) (an "'inference based upon [] speculation or conjecture does not create a material factual dispute sufficient to defeat entry of summary judgment'").
Reilly makes only one effort to point to record evidence other than his own testimony to support his theories about catastrophic business disruptions-saying in a section header that "GSK users complain[ed] about major business disruptions." AOB 9-10. Then, to try to support that assertion, he quotes from an email chain relating to computer slowdowns in India. Id. But those "disruptions" occurred after GSK recapped the servers supporting India-that is, after the solution Reilly recommended was implemented. JA98-101, 256-264. The same employee who had complained about computer lag when the processers were uncapped, complained about performance after the processors were capped, stating that he believed "it is something to do with the processor feature which we disabled." JA257. Another GSK India employee asked Reilly and Taylor if the processors could be "reverse[d]" and uncapped again, and Taylor responded that GSK would not reverse its decision. JA256. Accordingly, the only evidence Reilly points to regarding computer delays and business disruption is supposed disruption that occurred after GSK implemented his suggestion to cap the processors.
In any event-and even more importantly, even if Reilly's surmise about lost orders and temporary lock ups were true, it was not objectively reasonable for Reilly to believe that they constituted any material disruption of GSK's business. As the district court concluded: (1) "GSK has a 'backup system' for the AS/400 that saves all information in the event of an outage that lasts continuously for 24 hours or more" (JA4, 186, 198-199); (2) "GSK has never needed to use this system" (JA4, 165, 198-199); and (3) "GSK does not consider a server shut-down of less than 24 hours to have a 'significant business impact.'" JA4, 165, 186, 198-199.
Given this, it was objectively unreasonable as a matter of law for an IT specialist in Reilly's position or with Reilly's training or experience to believe that server performance causing 15 minutes of computer lag time (JA122) or even 2-3 hours (JA511) somehow constituted a violation of SOX or even improper conduct. Westawski, 739 Fed.Appx. at 153 (summary judgment required because plaintiff's complaints did not "'relate in an understandable way' to any of Section 806's enumerated forms of fraud" (citing Weist I, 710 F.3d at 133)).
2. Reilly's Effort To Satisfy SOX's Protected Activity Element By Recasting His Complaints As Relating To GSK's Securities Disclosures Also Fails As A Matter Of Law
Likely realizing that his complaints about server performance and security could not possibly constitute protected conduct, Reilly-in a January 15, 2015 email to GSK's CEO sent after he learned that he would soon receive his termination date-tried to link his complaints to GSK's SEC disclosures. JA323-331. More specifically, after complaining for years about AS/400 service performance, Reilly for the first time asserted that GSK had failed to reveal those alleged IT-related risks on its 2013 and 2014 Form 20-F reports to the SEC. AOB 17-19. As the district court held, however, Reilly's last-ditch effort to assert protected conduct still fails as a matter of law.
Because Reilly sent his email after GSK notified him that his job would be eliminated, even if it constituted protected conduct (which it does not), there can be no inference of causation. (See Section I.B, infra.)
GSK's CEO's certifications in both its 2013 and 2014 20-F Reports specifically disclose that a "[f]ailure to adequately protect critical and sensitive systems and information may result in [GSK's] inability to maintain patent rights, loss of commercial or strategic advantage, damage to [GSK's] reputation or business disruption including litigation or regulatory sanction and fines, which could materially and adversely affect [GSK's] financial results....There is the potential that malicious or careless actions could expose our computer systems or information to misuse or unauthorised disclosure." JA12, 355, 369.
Reilly argues that the district court erred in concluding that those disclosures were accurate because he complained that GSK "fail[ed] to disclose actual instead of hypothetical risks." AOB 18-19. But there was no "actual" risk to report-indeed it is not even clear what Reilly means by "actual risk." Reilly does not dispute that GSK has a backup system for the AS/400, that GSK's disaster recovery protocol is not activated until there has been a continuous outage of 24 hours or more, and that circumstances have never caused the disaster protocol to be activated. JA165, 186, 198-199.
Moreover, Reilly did not complain about "actual" business disruption-but instead about potential disruption. In fact, his statements to GSK's CEO match the potential risks that GSK disclosed:
These problems relate not only to stability, quality control and compliance of the AS400 computer systems but also the global supply chain interfaces and integrity of the manufacturing and financial data being hosted on these servers. This could eventually lead to drug manufacturing quality problems, financial data irregularities and even more FDA penalties against GSK.JA323 (emphasis added).
Reilly then relies on the Administrative Review Board's statement in Sylvester v. Parexel Int'l LLC that a whistleblower's complaint is "protected as long as the employee believes that the violation is likely to happen." AOB 21 (citing Sylvester, No. 07-123, 2011 WL 2517148, at *13 (ARB May 25, 2011)). He fails to mention, however, that Sylvester made clear that "unsupported conjecture about hypothetical future events" is not protected activity. Sylvester, 2011 WL 2517148, at *37 (Brown, A.J., concurring in part); Wiest 1, 710 F.3d at 133 (citing Sylvester and noting that whistleblowing occurs when there is a reasonable belief that a "violation is imminent").
Here, Reilly failed to present evidence that the concerns he raised (AS/400 performance issues causing catastrophic failures) ever occurred, much less that a violation of securities laws was imminent. Instead, as the district court explained, Reilly offered only his own subjective belief that GSK should make a specific disclosure any time a computer shuts down for an hour once a week. JA34-35, 124-125. The district court then correctly concluded that "notwithstanding [Reilly's] dissatisfaction with the specificity of the company's disclosures," GSK's disclosures were consistent with the undisputed record. JA35.
This Court's decision in Safarian v. Am. DG Energy Inc. illustrates why Reilly's efforts to build his claims on SEC disclosures fail as a matter of law. 622 Fed.Appx. 149 (3d Cir. 2015) (affirming in part 2014 WL 1744989 (D.N.J. Apr. 29, 2014)). In that case, the district court held that the plaintiff's report of "overbilling, improper construction, and the failure to obtain proper permits" where the plaintiff "believed that the fraudulent billing of customers 'result[s] in misstatement[s] of accounting records to ... shareholders and fraudulent tax submissions to [the] Internal Revenue Service'" was not protected conduct. Safarian, 2014 WL 1744989, at *4. Although the district court acknowledged that it was true that overbilling "might eventually lead to incorrect accounting records," there was no evidence connecting the plaintiff's complaints to the accounting practices targeted by SOX (i.e., securities or accounting fraud) and, therefore, the complaints "f[e]ll outside the scope of [SOX"]. Id. at *4-5.
Likewise here, there is no evidence that the disruption Reilly speculated might occur actually did occur-indeed, the evidence shows it did not-and even if it had, there is no evidence that it was reasonable to believe that anyone at GSK covered up server issues or significant business disruption that was reportable on GSK's SEC disclosures. As the district court concluded, Reilly did not even set the internal controls for the security of the AS/400 (JA6), let alone have any responsibility to "examine, produce, submit, or approve the accounting reports or tax submissions." Safarian, 2014 WL 1744989, at *4-5 (noting that plaintiff "is an engineer who has no involvement with the company's accounting or taxation practices, and the reported activity did not deal with corporate disclosures").
The district court also relied on Lamb v. Rockwell Automation, Inc. Although out-of-circuit, the district court found this case useful in analyzing Reilly's claims because it involved similar facts. JA32, 35-36 (citing 249 F.Supp.3d 904, 913 (E.D. Wis. 2017)). In Lamb, the plaintiff was on her employer's "IT internal controls team, work[ing] specifically with [] access privileges of IT department users and how those privileges related to internal control over financial reporting for purposes of SOX compliance." Id. at 907 (emphasis added). Lamb's alleged protected activity arose from her supervisor's request to disable certain rules surrounding access privileges, "[r]ather than identify over-privileged users and remediate ... conflict[s]," which Lamb alleged would "preclude an assessment of internal control over financial reporting as 'effective'." Id. at 907-908. Based on that conduct, Lamb alleged that high-level corporate officers at her employer were not accurately reporting disclosures to the SEC. Id.
Notably, Lamb's job responsibilities had a closer connection to SOX than Reilly's ever could.
The district court concluded that Lamb failed to present evidence linking her alleged complaints to violations of SOX. Id. at 919. Specifically, the court held that "no reasonable person in Lamb's position could have believed that a SOX violation was imminent at the time of her reporting ... [given the] scope of [her employer's] financial reporting or the other processes in place to ensure the integrity of its internal controls over financial information." Id. at 916 (noting that Lamb complained that her supervisor's actions "were a violation of [her employer's] ethics with potential significant impacts on the organization").
The same goes here for the same reason. Reilly "offers nothing to substantiate how [the alleged] misconduct would have a meaningful, or even noticeable, effect on [GSK]" or any evidence connecting his complaints to GSK's SEC certifications. Id. at 918. Just like Lamb, Reilly's "lengthy, unbroken string of hypothetical scenarios"-offering hypothetical about catastrophic business failure and speculating that higher-ups committed fraud by signing inaccurate disclosures-cannot connect his complaints to SOX. Id. at 919. As such, the district court correctly pointed to Lamb when it held that, regardless of any alleged wrongful conduct, the record evidence here is "'far too attenuated from the welfare of the shareholders to fall within the SOX ken.'" JA36 (quoting Lamb, 249 F.Supp.3d at 918).
In accordance with this Court's precedents and the factually similar Lamb case, the district court correctly held that "'[n]o reasonable person in [Reilly's] place, with [his] training and experience, could have believed that [GSK's] conduct violated SOX'" and, separately, that "[n]o factfinder could find [Reilly's] belief that GSK violated SOX by not naming precise server issues to be objectively reasonable." JA35-36 (citing Lamb, 249 F.Supp. at 913).
Reilly has nothing at all to say about this Court's decisions or Lamb and instead cites to inapposite cases, which only underscore why Reilly's claims fail as matter of law.
First, Reilly tries to discredit GSK's Form F-20 by asserting that "[m]any large corporations like GSK disclose generalized security risks in their public filings. If they do so while failing to disclose known actual risks, the omission can give rise to a shareholder fraud action." AOB 19 (citing Matrixx Initiative, Inc. v. Siracusano, 563 U.S. 27 (2011)). Matrixx, however, has nothing to do with the disclosure of risks related to computer stability or security risks and has no bearing here. In fact, Matrixx demonstrates why Reilly failed to meet his burden.
As the Supreme Court explained, to determine whether the plaintiff had pled securities fraud, the court needed to analyze whether defendants' claims were "misleading as to a material fact." Id. at 39. On that question, the district court here found that there is nothing misleading about GSK's disclosures-GSK disclosed that a "[f]ailure to adequately protect critical and sensitive systems and information ... could materially and adversely affect our financial results," and Reilly has no evidence that any material disruption ever occurred or was about to occur. JA12-13, 355, 369.
Second, Reilly tries to compare his complaints to those in Thomas v. Tyco International Management Co., LLC, 262 F.Supp.3d 1328 (S.D. Fla. 2017). As an initial matter, the decision in Thomas was to allow his SOX claim to move forward at the motion to dismiss stage-where the plaintiff had no evidentiary burden. Even then, Reilly's complaints do not come close to the complaints alleged in Thomas. The court summarized the plaintiff's allegations in that case as follows:
While employed by Tyco, Plaintiff began to have doubts about the reliability of a new monthly tie-out process used to ensure that the consolidated financial data reported to the SEC agreed with financial data in Tyco's general ledger system due to the following: (1) the lack of involvement of IT and compliance personnel; (2) the lack of a formal means to approve changes to data; and (3) the lack of the ability to detect manual manipulations to the data.Id. at 1332 (internal citations omitted).
In other words, the controls Thomas complained about-for which he, unlike Reilly, was responsible-were "used to ensure that the consolidated financial data reported to the SEC agreed with [the employer's] financial data." Id. Here, there is no evidence connecting Reilly's job responsibilities or complaints to GSK's financial reporting and certifications.
Instead, as the district court held, Reilly's complaints (whether about computer instability and security or disclosure of those issues in SEC certifications) fail as a matter of law because he "has not established facts showing that his complaints . . . were even remotely related to fraud of any kind" and "[n]o factfinder could find [Reilly's] belief that GSK violated SOX by not naming precise server issues to be objectively reasonable." JA36. Reilly's failure to supply evidence that he engaged in SOX-protected activity is reason enough to affirm the district court's order.
B. Reilly Failed To Establish A Prima Facie Case That His Complaints Were A Contributing Factor In GSK's Decision To Eliminate His Position
Reilly also failed to satisfy his burden on another element of the prima facie case for SOX retaliation because there is no evidence demonstrating that his purported protected conduct was a contributing factor to GSK's decision to outsource the AS/400 service and eliminate his and other analyst positions. In fact, the uncontroverted evidence is to the contrary.
1. Reilly's Unsupported Speculation Does Not Establish An Inference Of Causation
A contributing factor is "any factor, which alone or in combination with other factors, tends to affect in any way the outcome of the decision." Wiest II, 812 F.3d at 330 (internal quotation marks omitted). Although Reilly spends pages reciting this well-established standard to drive home his point that it "is not a demanding standard," he points to no evidence to meet that standard. AOB 2328. And while Reilly declares that "there is a dispute about whether [his] numerous complaints contributed to GSK terminating him," he never explains what that dispute is or offers any evidence of it. AOB 26.
Instead, Reilly stakes his "contributing factor" case on his assertion that GSK's contention that it outsourced "the entire AS/400 department" is not "honest" and it is more "honest to say that GSK executed a partial and selective outsourc[ing]" and that Taylor became "progressively frustrated at Reilly for" his complaints. Id. at 28. A review of the record-including what the district court found about the factual record-demonstrates that Reilly's characterization of the undisputed record is wrong.
Having found that Reilly did not prove protected activity, the district court did not analyze whether Reilly met his burden to prove causation. But its discussion of the undisputed evidence confirms that Reilly's job was eliminated due to GSK's decision to outsource the AS/400 service-not his complaints.
First, as the district court found, it is undisputed that GSK outsourced the AS/400 service to a third-party vendor because the AS/400 was not compatible with the new SAP software, requiring a new system. It is also undisputed that, as a result of that decision, Miller decided to eliminate the AS/400 Team with the exception of the Manager (Taylor), who would remain to manage the relationship with the new third-party vendor, and a newly created analyst position to support Taylor and act as a liaison with the vendor. JA13, 104, 106107, 110-111, 137, 145, 159, 162, 175, 186-187, 272-273, 306-311.
There is no evidence in the record, only Reilly's bare assertion, that GSK conducted a "selective outsource." AOB 28. Nor is there any evidence that "everyone knew Mong would get the [new analyst] position," or that Bolton gave Reilly some sort of inappropriate "warning" that he would be terminated if he did not get the new analyst position. See AOB 13. Indeed, the record is to the contrary. GSK offered Reilly an opportunity to apply for the new position and informed him that the unsuccessful candidate would be terminated. Reilly rejected the opportunity. JA13-14, 107, 109-113, 182, 187, 306-311.
Second, Reilly supports his assertion that Taylor was "frustrated" with him by pointing to an email she sent to Taylor telling him that she does not need to be "reminded yet again!" about uncapped processors and that she had expressed "disappointment" over his work. See AOB 11 (citing JA516); see also JA547. However, "'[u]nsubstantiated and subjective beliefs and opinions are not competent summary judgment evidence.'" Lampkin v. Cohen, No. 00-CV-657, 2000 WL 1522851, at *5 (E.D. Pa. Oct. 12, 2000), aff'd, 33 Fed.Appx. 648 (3d Cir. 2002); Yue Yu v. McGrath, 597 Fed.Appx. 62, 67 (3d Cir. 2014) (citing Adamson v. Multi Cmty. Diversified Servs., Inc., 514 F.3d 1136, 1151 (10th Cir. 2008) (employee's subjective belief in invidious nature of isolated and ambiguous comment does not support inference of discrimination)).
Reilly makes similar assertions about his belief that Taylor excluded him from the outsourcing process and discouraged him from applying for the open analyst position. AOB 13. But Reilly admits that other AS/400 team members (Oberholzer, Bacon, and Farnden) also were not involved in the outsourcing and cannot dispute that Taylor was not involved in filling the new analyst position. JA102-105, 159, 187. Instead, Bolton sought clarification from HR on whether Reilly was permitted to apply for the role, advised Reilly he could apply (which (continued on next page) he did not), and then ultimately selected Mong for the job. JA159, 169, 175-176, 187, 306-311.
In any event-and more importantly-even if Reilly's beliefs about Taylor's "frustration" were accurate, he still failed to provide the evidence required under controlling law-evidence linking that frustration to GSK's decision to outsource the AS/400 service and eliminate the existing analyst positions. In fact, it is undisputed that, in 2013, Miller-not Taylor- recommended that GSK outsource the AS/400 service to a third-party vendor. JA144, 186-187. So, there is no evidence to support Reilly's speculation that frustration or animus on the part of Taylor played any role in the outsourcing decision.
This Court has affirmed summary judgment for an employer in the face of the same argument Reilly makes here. Wiest v. Tyco Elecs. Corp., No. 10-3288, 2015 WL 1636860, at *9 (E.D. Pa. Apr. 13, 2015) ("[E]ven if there was a great deal of frustration with Mr. Wiest in the Wireless Business Unit ... there is no evidence that any of that alleged frustration was a contributing factor in the preliminary decision to terminate Mr. Wiest"), aff'd, 812 F.3d 319 (3d Cir. 2016); see also Feldman v. Law Enf't Assocs. Corp., 752 F.3d 339, 349 (4th Cir. 2014) ("[T]here was indeed animus between Feldman and the Outside Directors after Feldman's conduct, but he has not shown that the animus was a retaliatory response to his activities. Instead, he acknowledges that the acrimony began nearly two months before his first activity, and has offered no evidence that his conduct changed the bitter status quo in any way.").
Third, Reilly's reliance on Powers v. Union Pacific Railroad Company, ARB Case No. 13-034, 2015 WL 1881001 (ARB March 20, 2015), a whistleblower claim under the Federal Rail Safety Act, does not advance his argument. Reilly notes that Powers holds that an employer's evidence of non-retaliatory motive cannot rebut a complainant's evidence of contribution at the prima facie stage. AOB 27; Powers, 2015 WL 1881001, at *21. While that is true, that point is irrelevant here because GSK does not advance evidence of non-retaliatory motive at this stage. Instead, in conformance with Power's holding that such evidence is appropriate when the burden shifts to GSK, GSK (in Section II, infra) sets forth undisputed facts that meet its burden to establish by clear and convincing evidence that it would have terminated Reilly regardless of his complaints. Id. GSK need not rely on evidence of non-retaliatory motive at this stage because, as explained, what distinguishes Reilly from Powers is that Reilly has no evidence that his alleged protected activities contributed to GSK's decision to outsource the AS/400 service. Without such evidence, the uncontested facts show that Reilly failed to meet his burden. For that reason alone, GSK is entitled to summary judgment as a matter of law.
Powers engaged in protected activity when he filed a medical injury report and followed his doctor's treatment plan based on that report-both of which constitute a protected activity under the Federal Rail Safety Act. Powers, 2015 WL 1881001, at *24. Powers' employer then terminated Powers for failing to follow the doctor's treatment plan-directly connecting his protected activity to his termination. Id.
2. Even If Reilly Could Make Out An Inference Of Causation, Legitimate Intervening Events Destroy Any Such Inference
Even if Reilly had pointed to evidence to create an inference that his complaints led to his termination, "the record overwhelmingly demonstrates 'legitimate intervening event[s],' such that any causal connection that could be derived from the circumstances was severed." Wiest II, 812 F.3d at 332 (citing Feldman, 752 F.3d at 348). That means that Reilly did not and cannot establish a prima facie case on the causation element.
Wiest II shows why Reilly failed to meet his burden to produce evidence of causation. In that case, this Court pointed to legitimate intervening events, including the employer's consistent treatment of other employees, the employer's favorable treatment of the plaintiff, and the "passage of a significant amount of time" to conclude that any inference of causation had been severed. Wiest II, 812 F.3d at 330-32. The same is true here.
Reilly admits that after GSK announced the outsourcing, it offered him the opportunity to apply for the new analyst position and Reilly decided not to pursue this opportunity. JA109-113, 176, 182, 187, 306, 310. In fact, Reilly- along with the other U.S. Team members-was treated more favorably than the two U.K. AS/400 Team members, whose positions were eliminated outright without any opportunity to apply for the new position. JA187. In addition, GSK permitted Reilly to remain on payroll for months after his scheduled termination date and long after the departure of the rest of his teammates, first in light of his disability leave and then due to GSK's desire to conduct a thorough investigation into his allegations. JA114-115, 119, 181, 273, 276.
These "uncontroverted facts, both individually and collectively, negate any possible inference of causation." Wiest II, 812 F.3d at 332. Moreover, the conduct on which Reilly primarily relies to claim he engaged in protected conduct-i.e., his complaint to GSK's CEO that GSK's SEC disclosures might be inaccurate-occurred nearly a year after GSK notified Reilly that his position had been eliminated as a result of the outsourcing. Accordingly, these undisputed facts establish that Reilly failed to make out a prima facie case of retaliation. For that separate reason, this Court should affirm summary judgment in favor of GSK.
II. The District Court's Summary Judgment Decision Also Can Be Affirmed On The Ground That Reilly Did Not-And Cannot-Dispute GSK's Clear And Convincing Evidence Establishing That It Would Have Terminated Reilly Regardless Of His Complaints
Even if Reilly had made out a prima facie case, GSK "still is entitled to summary judgment as it amply has demonstrated that it would have taken the same action in the absence of any protected behavior." Wiest II, 812 F.3d at 333 (citing 29 C.F.R. § 1980.109(b) ("[R]elief may not be ordered if the respondent demonstrates by clear and convincing evidence that it would have taken the same adverse action in the absence of any protected activity.")). Indeed, it is hard to imagine a set of circumstances under which a reasonable factfinder could conclude that GSK would decide to outsource an entire service, and eliminate the positions of an entire team supporting that service, as some sort of effort to retaliate against one employee. Reilly has no evidence of such a set of circumstances here.
In fact, although the district court did not decide this issue, the district court's factual findings confirm that conclusion:
• In 2013, GSK started a program to reorganize the EIS Department, of which Reilly was a member. JA13, 185186, 272-273, 704-727.
• As part of the reorganization of EIS and the changeover necessary to support SAP in December 2013, GSK decided to outsource management of the AS/400 system to a third-party vendor, Blue Chip, during the phaseout. JA13, 104, 107, 109-110, 135-139, 144, 161-162, 186187, 272-273, 306-311, 728-769.
• In January 2014, Reilly submitted his Speak Up complaint. JA9, 278-291, 296.
• In March 2014, GSK announced the outsourcing and Reilly was made aware that every position in the AS/400 Team was being eliminated, except for Jo Taylor's, who remained as manager, and the creation of a new analyst position. JA13, 104, 107, 109-110, 136139, 175, 186-187, 272-273, 306-311, 728-769.
• In May 2014, GSK offered Reilly an opportunity to apply for the lower level analyst position and informed him that the unsuccessful candidate would be terminated. Reilly rejected the opportunity. JA13-14, 107, 109-113, 182, 187, 306, 310.
• Reilly admits "that he was informed by GSK that if he chose not to apply for the Service Analyst role, he would be 'agreeing to be let go,' as was also the case for his AS/400 Team co-workers, Mike Bacon, Steve Farden, and Rick Oberholzer. ... Nonetheless, Mr. Reilly decided not to apply for the Analyst position." JA14, 109-113, 182, 187, 306, 310.
• After Reilly's termination was postponed due to his short-term disability leave and the investigation of his complaint to GSK's CEO, GSK notified Reilly "that based on the outsourcing of the AS/400 Team," his employment had been terminated, effective June 30, 2015. JA17, 118-119, 128-129, 273, 276, 323-331, 338-341, 377.
Reilly offers no contrary evidence.
Reilly spends pages discussing the contours of his "broad and forgiving" contributing factor burden (which he still failed to meet), but he does not even try to dispute GSK's clear and convincing evidence that he would have been terminated even if he had not made any complaints. Other than asserting- without support-that GSK "mischaracteriz[es] the scope and breadth of the outsourcing," AOB 28, he has no evidence showing that GSK made its decision on anything other than legitimate, defined business reasons, as shown by the company presentations outlining the detailed business and financial justifications for GSK's decision. JA704-769. Instead of pointing to evidence suggesting that GSK's legitimate business reasons were not "true" (because he cannot), Reilly simply repeats his belief that GSK must have done something wrong simply because he lost his job.
Like the plaintiff in Wiest II, Reilly "[a]gain ... fails to acknowledge his burden at this phase of the litigation. [The district court is] not obligated to ignore uncontroverted evidence [and must grant summary judgment]... unless and until [the plaintiff] identifies some evidence in the record to create a genuine dispute on this fact." Wiest II, 812 F.3d at 332 n.9. In this case, Reilly does not identify any such evidence-because there is none.
Based on the complete absence from the record of any facts to support Reilly's claims, as well as the clear and convincing undisputed evidence in favor of GSK, this Court should affirm summary judgment for GSK for this separate reason.
CONCLUSION
This Court should affirm the district court's July 16, 2019 Order entering judgment for GSK.
Respectfully submitted, Dated: January 2, 2020
Kim M. Watterson (PA ID No. 63552) REED SMITH LLP 225 Fifth Avenue Pittsburgh, PA 15222 (412) 288-7996 kwatterson@reedsmith.com
Betty S.W. Graumlich (VSB No. 30825) Mark J. Passero (PA ID No. 314298) REED SMITH LLP Riverfront Plaza-West Tower 901 East Byrd Street, Suite 1900 Richmond, VA 23219 (804) 344-3400 bgraumlich@reedsmith.com mpassero@reedsmith.com
Counsel for GlaxoSmithKline LLC
COMBINED CERTIFICATES
The undersigned hereby certifies that:
1. The Brief of Appellees was filed with the Court via the Court's ECF system, and an original and ten copies of the foregoing Brief were sent via overnight delivery to the Office of the Clerk, in accordance with Rule 25(a)(2)(B) of the Federal Rules of Appellate Procedure.
2. A copy of the foregoing Brief of Appellees was served upon the following counsel of record via the Court's ECF system, and one copy of the foregoing Brief was sent via overnight delivery:
Scott M. Pollins
Pollins Law
800 Westdale Avenue
Swarthmore, PA 19081
303 W. Lancaster Ave., Ste. 1C
Wayne, PA 19087
Attorney for Appellant
3. The undersigned counsel hereby certifies that she is a member in good standing of the bar of the United States Court of Appeals for the Third Circuit.
4. This Brief complies with the type/volume limitation contained in Rule 32(a)(7)(B)(i) of the Federal Rules of Appellate Procedure. The brief contains 12,334 words, excluding the parts of the brief exempted by Fed. R. App. P. 32(f).
5. Pursuant to Third Circuit LAR 31.1(c), the text of the electronic brief is identical to the text in the paper copies.
6. The electronic version of the Brief of Appellees filed with the Court was virus checked using Trend Micro Office Scan Client 10.0 sp1 scan engine 9.205.1002, and was found to have no viruses.
Dated: January 2, 2020
Kim M. Watterson (Pa. I.D. No. 63552)