Opinion
19-2897
01-23-2020
THOMAS REILLY, Appellant v. GLAXOSMITHKLINE LLC
Scott M. Pollins Pollins Law Attorney for Appellant Thomas Reilly
On Appeal from the United States District Court For the Eastern District of Pennsylvania (E.D.Pa. No. 17-CV-2045) District Judge: Honorable J. Curtis Joyner
REPLY BRIEF OF APPELLANT
Scott M. Pollins Pollins Law Attorney for Appellant Thomas Reilly
TABLE OF CONTENTS FOR APPELLANT'S REPLY BRIEF
INTRODUCTION …………….……………………………………….. 1
CONGRESS INTENDED BROAD PROTECTION FOR WHISTLEBLOWERS ……………………………………………………… 1
REILLY'S SOX-PROTECTED COMPLAINTS SPLANNED YEARS … 3
GSK ACKNOWLEDGED THE LEGITIMACY AND SEVERITY OF REILLY'S COMPLAINTS BUT CONCEALED THE ACTUAL RISKS HIS COMPLAINTS EXPOSED IN ITS SEC FILINGS ……………….. 5
GSK DID NOT OUTSOURCE REILLY'S ENTIRE DEPARTMENT AND IT HAS NOT PHASED OUT THE AS/400 AND ITS REPEATED CLAIMS TO THE CONTRARY SPOTLIGHT THAT ISSUES OF MATERIAL FACT EXIST ABOUT REILLY'S CASE …… 6
THE SAFARIAN AND LAMB CASES ARE DISTINGUISHABLE FROM REILLY'S CASE ………………………………………… 9
CONCLUSION …………………………………………………………….. 10
TABLE OF AUTHORITIES
Cases Page
Araujo v. New Jersey Transit Rail Operations, Inc., 708 F.3d 152 (3rd Cir. 2013) …………………………………………………………. … 2
Digital Realty Trust v. Somers, 583 U.S. (2018) ……………………… 9
Feldman v. Law Enforcement Associates, Corp., 752 F.3d 339 (4th Cir. 2014) 2
Lamb v. Rockwell Automation, Inc., 249 F.Supp.2d 904 (E.D.Wis. 2017) .. 10
Safarian v. American DG Energy, Case No. 10-6082 (D.N.J. 4/30/14)…… 9
Wiest v. Lynch, 710 F.3d, 121 (3rd Cir. 2013) ………………………….. 3
Statutes
18 U.S.C. §1514A ………………………………………………………. 1
49 U.S.C. § 42121 ………………………………………………………… 1, 2
Regulations
29 C.F.R. § 1980.104 …………………………………………………….. 3
INTRODUCTION
Appellant, Thomas Reilly (Reilly), through his counsel, submits this Reply Brief in support of his request the District Court decision be reversed so that he can have his case decided by a jury.
Whenever a party seeking summary judgment relies on its spin about the facts of the case, summary judgment must be denied. It's a jury's role to determine what the facts are and what inferences or spin should be drawn from those facts. Appellee, GlaxoSmithKline, LLC (GSK), repeatedly asks this Court to take its word over Reilly's and value its assessment of the evidence over a jury's. This Court should not condone GSK's attempts to deprive Reilly of the opportunity to present his case to a jury and allow a jury to decide what the truth is.
CONGRESS INTENDED BROAD PROTECTION FOR WHISTLEBLOWERS
The Sarbanes-Oxley Act of 2002 (SOX) contains both civil and criminal provisions providing for the protection of whistleblowers. The civil cause of action, 18 U.S.C. § 1514A (Section 806), provides that a publicly traded company like GSK may not "discharge, demote, suspend, threaten, harass or in any other manner discriminate against an employee in the terms and conditions of employment." Section 806 provides that "An action brought under paragraph 1(B) shall be governed by the legal burdens of proof set forth in section 42121 of title 49 of the United States Code." 49 U.S.C. § 42121 is the "contributing factor" burden-shifting framework of the Whistleblower Protection Program of the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR 21), 49 U.S.C. ¶ 42121(b). Feldman v. Law Enforcement Associates, Corp., 752 F.3d 339, 344 (4th Cir. 2014).
The AIR 21 burden shifting framework is far more protective of employees and much easier to satisfy than Title VII. Araujo v. New Jersey Transit Rail Operations, Inc., 708 F.3d 152, 158-59 (3rd Cir. 2013) (applying AIR 21 standard to an analogous whistleblower statute). Thus, in enacting SOX and other federal whistleblower statutes, Congress purposely avoided Title VII's McDonnell-Douglas burden shifting framework in favor of a framework that is far more protective of employees like Reilly. "For employers, this is a tough standard, and not by accident." Id. at 159. In Araujo, the Third Circuit interpreted the Federal Rail Safety Act, which, like SOX, explicitly adopts the "contributing factor" standard from AIR 21. After discussing the legislative history, the court stated: "We simply note this history to emphasize that, as it did with other statutes that utilize the 'contributing factor' and 'clear and convincing evidence' burdenshifting framework, Congress intended to be protective of plaintiff-employees." Id. at 160.
GSK agrees that Reilly must demonstrate the following by a preponderance of the evidence to establish a prima facie case for retaliation under Section 806: he (1) "engaged in a protected activity; (2) "[t]he respondent knew or suspected that the employee engaged in the protected activity;" (3) "[t]he employee 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 v. Lynch, 710 F.3d 121, 129 (3rd Cir. 2013) (quoting 29 C.F.R.§ 1980.104(e)(2)(i)-(iv)). Once Reilly has made a prima facie showing, the burden is on GSK to prove "by clear and convincing evidence that it would have taken the same adverse action in the absence of the [plaintiff's] protected activity." 29 C.F.R. § 19080.104(e)(4) (emphasis added).
REILLY'S SOX-PROTECTED COMPLAINTS SPANNED YEARS
In its response brief, GSK attempts to downplay the specificity, breadth and severity of Reilly's complaints. Here's a list of the complaints Reilly made starting in early 2012 and through early 2015.
Early 2012 - Following a SOX audit discussion, Reilly complains to his manager Jo Taylor (Taylor) that GSK's auditors are not being informed about the lack of security reporting on GSK's global manufacturing and financial services, including the Enterprise One Financial server (E1), which processes $100,000,000 per day in customer orders. Reilly's brief at 7.
January 2013 - Reilly informs Taylor about computer server security and performance problems in advance of an external audit with PriceWaterhouseCoopers (PwC) and Taylor tells Reilly to keep quiet about his concerns so that PwC does not pick up any insights about this. Reilly's brief at 8.
Spring 2013 - On the heels of Taylor finally listening to Reilly about the danger of using uncapped processors, GSK users repeatedly complain about
severe and debilitating delays in shipping customer orders and generating invoices. Reilly's brief at 9-10.
Summer 2013 - After Reilly tells her that the "lights are and have been flashing red so someone with authority and ability to align resources needs to step up and act", Taylor angrily responds and says "I'm well aware of the situation, history and impact and don't need to be reminded yet again." Reilly's brief at 10-11.
Early 2014 - Reilly complains to GSK's Global Compliance about serious problems with GSK's global manufacturing and enterprise financial systems impacting GSK worldwide. GSK's Global Compliance tells Reilly his allegations are getting attention at the highest levels of the company, including the CEO. GSK's Global Compliance tells Reilly that his complaints could impact share value if it were discovered that GSK was concealing information from its external auditor PwC. Reilly's brief at 1314.
March 2014 - Reilly reiterates his complaints about the security of GSK's global production servers being unstable and continuing to experience serious disruptions that auditors would have kittens if they became aware of. Reilly's brief at 12.
June 2014 - Reilly complains that he's been on record saying that GSK's U.S. AS400 computer server fleet is unstable and problems have been covered up. Reilly's brief at 12.
January 2015 - Reilly submits a lengthy complaint to GSK's CEO. Reilly tells GSK's CEO that the computer security, stability and quality issues he's been complaining could violate the Corporate Integrity Agreement GSK was forced to enter into with the U.S. Department of Justice as a result of the Cidra scandal. Reilly says that GSK's Global Compliance has already told him that falsely claiming compliance to auditors and shareholders could impact share price. Reilly informs the CEO that GSK's 2013 Annual Report makes no reference of the serious security, quality, and compliance issues he's been complaining about. Reilly's brief at 14-17.
GSK ACKNOWLEDGED THE LEGITIMACY AND SEVERITY OF REILLY'S COMPLAINTS BUT CONCEALED THE ACTUAL RISKS HIS COMPLAINTS EXPOSED IN ITS SEC FILINGS
As indicated above, when Reilly complained to GSK's Global Compliance in early 2014, he was informed his complaints were being taken seriously because they could impact the company's share value. Taylor also realized the severity of Reilly's complaints but instructed him to cover up his concerns from GSK's external auditors at PwC. According to GSK's Global Compliance Manager's September 2014 report, several of Reilly's complaints about access management and privileges and computer configuration and performance issues were substantiated. JA-777-78.
In GSK's 2013 and 2014 20-F's filed with the SEC, GSK disclosed hypothetical information systems risks that could negatively impact the company's financial results instead of the actual risks Reilly had complained about and GSK users had substantiated were causing actual financial losses. Reilly's brief at 18-19.
GSK's self-serving and unsubstantiated statement on page 18 of its brief that the second investigation of Reilly's complaints conducted by Global Corporate Investigations showed his complaints to be unfounded is icing on a mud pie. GSK knows that it refused to disclose this report based on a claim of attorney/client privilege. Therefore, reference to the outcome of a secret privileged report is unfair to Reilly, allows GSK to continue to get away with hiding the truth, and should not be tolerated by this Court.
GSK DID NOT OUTSOURCE REILLY'S ENTIRE DEPARTMENT AND IT HAS NOT PHASED OUT THE AS/400 AND ITS REPEATED CLAIMS TO THE CONTRARY SPOTLIGHT THAT ISSUES OF MATERIAL FACT EXIST ABOUT REILLY'S CASE
GSK wants us to believe that it outsourced Reilly's entire department and its entire AS/400 service. Neither is true. The truth is that GSK did a selective outsourcing in which Taylor and Reilly's co-worker, Daniel Mong (Mong), both remain employed by GSK after the alleged complete outsourcing. In about the Spring 2014, years after Reilly had first started complaining, Reilly and his coworkers were allowed to apply for an open position even though everyone knew Mong would get the position. JA-427. Taylor told Reilly he was not allowed to apply for the retained position because it was going to be a very low-level position and he was too high of a grade to apply. JA-427. Subsequently, Reilly was allowed a one-week window to apply for the retained position with the caveat that if he applied and did not get it he was agreeing to be terminated. JA-428.
By this time, Reilly had complained to Global Compliance three months earlier and had an entirely different thread happening. JA-429. Global Compliance told Reilly that based on his complaints he would be safeguarded. JA-429. Reilly believed that GSK's Global Compliance was going to safeguard him and knew that the outsourcing was a farce to cover up performance and security problems. JA-429. Global Compliance instructed Reilly that based on what he had shown them, Reilly could not be wrongfully terminated for making serious allegations and they were going to protect him. JA-430.
Reilly was living in parallel realities - one where GSK's Global Compliance was assuring him he was protected during their investigation and the other where GSK IT was telling him that he was going to be eliminated. JA-434. Reilly could not push back with GSK IT to say he was not going to apply for the retained position because he was waiting for Global Compliance's investigation. JA-434. Reilly committed to GSK's Global Compliance that he would not discuss the investigation with anybody internally or externally. JA-435. Global Compliance warned Reilly not to share his allegations with anybody internally or externally. JA-442. Reilly took Global Compliance at its word and believed he was prohibited from reporting to a government agency. JA-442.
On page 3 of its brief, GSK claims that it is uncontroverted that GSK outsourced the entire AS/400 service. In an April 2019 declaration submitted by GSK with its district court summary judgment brief, GSK's Vice President of Infrastructure Operations said that he led a strategy to eliminate GSK's use of AS/400's and move into an ERP program because the AS/400's were a sunset strategy. None of this is true. Several months earlier and in January 2019, Mong testified as follows:
Q The AS/400 servers?
A Yes.
Q Which were the computers that were being used worldwide at Glaxo?
A Yes.
Q Are they still the same computers?
A They are, yes.
Q What's ERP?
A It stands for Enterprise Resource Planning.
Q How does that relate to the computer system at Glaxo?
A Well, the ERP would be -- like, the JD Edwards Financial Service -well, we just referred to it as JD Edwards and the manufacturing software's called BPCS, the acronym BPCS. You know, ERP, that terminology is really more closely aligned to the SAP solution that was in place for the projected migration of the AS/400 workload eventually to this ERP solution.
Q Why was that being done?
A Uhm, it was just considered strategic. They wanted to have a consolidated platform for all of their finance and manufacturing.
Q So a move from AS/400s to the ERP?
A Yes.
Q When was that started, that initiative?
A Hmm.
Q Around 2001? Does that sound about right?
A No. It might have been a little earlier, but I -- the only - it could have
gone back that long. I know that there were multiple iterations of that project that didn't really take off, but probably by 2005 it became sort of a tangible platform that that was then being used.
Q Is that going on today?
A The service is still there. It's no longer the strategic direction of the company.
JA-450 and Ex. 1.
A portion of Mong's deposition testimony cited here was not included in the joint appendix (pp 50:1-51:4). Exhibit 1 includes JA-450, which is page 49 of Mong's deposition and pages 50-51 of his deposition, which Reilly has also labeled as JA-450a and JA-450b. Reilly understands that this Court may decide to ignore pages 50 and 51 because they were not included in the original joint appendix. Reilly respectfully requests this Court decide instead to consider these pages especially because the evidence directly contradicts what GSK claims is 100% true.
THE SAFARIAN AND LAMB CASES ARE DISTINGUISHABLE FROM REILLY'S CASE
On page 40 of its brief, GSK says that the Safarian v. American DG Energy Inc. case shows why Reilly's case should be lost. However, what GSK failed to mention is that Mr. Safarian did not even bring a SOX claim. He brought a whistleblower claim under the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. Safarian, https://scholar.google.com/scholar_case?case=14147971697437909415&q'safaria n+v+american+dg+energy+inc&hl=en&as_sdt=6,76,90,100,108,123,139,153,163, 298,299,300,361,362,363. This is a significant distinction because Dodd-Frank only protects whistleblowers who have complained to the SEC, whereas SOX protects internal whistleblowers like Reilly. See, Digital Realty Trust v. Somers, 583 U.S. (2018).
On page 41 of its brief, GSK cites the Lamb v. Rockwell Automation, Inc. case relied on by the District Court. Ms. Lamb's case is different than Reilly's case and should not suffer the same fate of dismissal because the court found Ms. Lamb had complained about violations of company procedures, not federal law, and her own expert said nothing she complained about was a SOX violation. Lamb, 249 F.Supp.2d 904, 909, 913-14 (E.D. Wis. 2017).
CONCLUSION
In early 2012, Reilly risked his career and livelihood by complaining to his long-time employer GSK that its computer systems were dangerously outdated, compromised, unstable and insecure. Reilly persistently complained while loyally serving GSK and performing his job. Throughout the next three years, GSK acknowledged that Reilly's complaints were serious enough that GSK's share price could be impacted but told Reilly to conceal problems from GSK's external auditors and warned Reilly to talk to no one about his complaints.
Eventually, GSK grew angry and frustrated with Reilly and devised a plan to selectively outsource his department, downplay his complaints and end his employment. SOX cases are difficult for employees to successfully litigate and win. Congress intended for whistleblowers to more easily reach the courthouse and have their cases decided by juries.
Reilly asks that this Court reverse the District Court's decision and allow his case to be heard by a jury.
Respectfully submitted, By: Scott M. Pollins, Pollins Law 303 W. Lancaster Ave., Ste. 1C Wayne, PA 19087 (610) 896-9909 (phone)/(610) 896-9910 (fax) scott@pollinslaw.com (email) Attorney for Plaintiff/Appellant, Thomas Reilly
CERTIFICATION OF COUNSEL
I, Scott M. Pollins, certify as follows:
1. The reply brief contains 2437 words using Microsoft Word software.
2. The text of the electronic brief is identical to the text in the paper copies.
3. A virus detection program has been run on the file and no virus was detected.
4. Opposing counsel is a filing user as provided in L.A.R. Misc. 113.4 and has consented to electronic service of the brief through the court's electronic docketing system (cm/ecf). I certify that on this 23rd day of January 2020 I am causing to be mailed to opposing counsel via first class U.S. Mail a paper copy of Appellant's Reply Brief.
5. I am admitted to practice in this Court of Appeals.
By: Scott M. Pollins