Appeals Ct: NV Officials On The Hook For Failing To Investigate Worker’s Complaint

The U.S. District Court of Appeals for the Ninth Circuit has ruled that four Nevada officials can be sued for allegedly scuttling an investigation into a retaliation complaint filed by a whistleblower who worked at Ear Nose and Throat Associates (ENTA) in Las Vegas, NV.

Helen Armstrong, a human resources supervisor at ENTA, reported the health and safety violations at ENTA in 2014 to the Nevada Occupational Safety and Health Administration (NOSHA), a state agency, when ENTA failed to take action. She alleged, among other things, the practice reused contaminated syringes and sold expired prescriptions.

NOSHA investigated and issued ENTA a fine.

ENTA allegedly immediately began retaliating against Armstrong, who had worked there for 23 years, and eventually fired her in 2016.

In an important ruling, a three-judge panel of the U.S. District Court of Appeals for the Ninth Circuit, based in San Francisco, has ruled that  “at will” employees like Armstrong have a limited property interest in their job and can’t be fired for a “prohibited reason” like reporting health and safety violations to NOSHA. 

“Armstrong’s complaint plausibly alleges that the process she received was essentially nonexistent and so constitutionally deficient,” the panel concluded.

The panel said Armstrong may be able to show the four state officials effectively conspired with ENTA to scuttle Armstrong’s retaliation complaint.

Evidence of Gross Retaliation

After she complained about ENTA’s unsafe practices, Armstrong began to receive write-ups and was demoted. Before her NOSHA complaint, not a single co-worker complaint was filed against Armstrong; afterward, 50 complaints were filed against her.

Armstrong filed a second NOSHA complaint alleging retaliation but withdrew it before ENTA was notified because she was diagnosed with cancer and feared losing her health insurance if she was fired.

NOSHA’s Chief Investigator Lara Pellegrini notified ENTA of the complaint when she copied ENTA on a letter to Armstrong acknowledging the withdrawal of the complaint. Instead of admitting her mistake, Pellegrini falsely told Armstrong she was required to send ENTA the letter copy.

Armstrong was on medical leave. When she returned to work, she says she was berated in front of office colleagues and patients and written up for lying about having been ill. That same day, she was hospitalized and required a heart stent implant.

Armstrong filed a third NOSHA complaint, alleging retaliation. This time, Pellegrini reassigned Armstrong’s case to herself and allegedly began obstructing the investigation. After Armstrong complained, Jess Lankford, NOSHA Chief Administrative Officer, reassigned the case to a new investigator but Pellegrini continued to be involved.

Armstrong alleges NOSHA officials engaged in foot dragging and subterfuge until they eventually dismissed her complaint without even notifying her.

Astoundingly, NOSHA failed to inform Armstrong and her attorney that ENTA had made a settlement offer.  

Armstrong sued four NOSHA officials in under 42 U.S.C. § 1983. In addition to Pellegrini and Lankford, the defendants are Terry Reynolds, Deputy Director of the Nevada Division of Business and Industry, and Steve George, Administrator of the Division of Industrial Relations.

Federal Lawsuit

Armstrong’s lawsuit was dismissed in its entirety by U.S. District Judge Andrew P. Gordon pursuant to a pretrial motion filed by ENTA.

The three-judge Ninth Circuit panel reinstated Armstrong’s claims of procedural due process against all NOSHA defendants, Armstrong’s claim of Intentional Infliction of Emotional District against Pellegrini, and ordered the lower court to permit Armstrong to amend some of her claims.

The panel didn’t buy ENTA’s argument that an ‘at will” employee like Armstrong can be fired at any time for any reason. The panel said an “at will employee” who is deprived of employment due to state government conduct can sue for interference with contractual relationships and failure to provide due process of law.

 “Nevada’s whistleblower protection statute… gives complainants a ‘legitimate claim of entitlement’ to an investigation of their complaint and to an action being brought on their behalf if the investigation shows a violation of the statutory provisions,” said the panel.

The panel said Armstrong may be able to plausibly allege NOSHA officials effectively colluded  with ENTA or “a relationship between the defendants and her termination sufficient to sustain either a ‘direct participation’ or ‘setting in motion’ theory.” 

Though some complaints may be meritless and not warrant an investigation, the panel says NOSHA “must undertake some investigation in cases involving facially meritorious complaints.”

The panel decision was written by Judge Danny J. Boggs and joined by judges A. Wallace Tashima and Marsha S. Berzon.

Armstrong was represented by Phillip Spector of Messing & Spector, Baltimore, MY, and John Napier Tye, of Whistleblower Aid, Washington, D.C.

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