Smith v. Harrison Rural Electrification Association, Inc. et al

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
JAMES SMITH,
Plaintiff,
v. 	CIVIL ACTION NO. 1:26-cv-2
(KLEEH)
HARRISON RURAL ELECTRIFICATION
ASSOCIATION, INC. and TERRY STOUT,
Individually and in his official
capacity,
Defendants.
MEMORANDUM OPINION AND ORDER GRANTING IN PART AND DENYING IN
PART DEFENDANT’S MOTION TO DISMISS [ECF NO. 5]
Pending 	before 	the 	Court 	is 	Defendants’ 	Motion 	to 	Dismiss
Plaintiff’s 	Complaint 	[ECF 	No. 	5]. 	For 	reasons 	stated 	herein,
Defendants’ Motion [ECF No. 5] should be GRANTED in part and DENIED
in part.
I. 	PROCEDURAL HISTORY
Plaintiff James Smith (“Plaintiff”) filed a Complaint against
Defendants 	Harrison 	Rural 	Electrification 	Association, 	Inc.
(“HREA”) and Terry Stout (“Defendant Stout”) on Jan. 5, 2026. ECF
No. 1. Plaintiff alleges seven causes of action: Count I: Violation
of the Enhancement of Contractor Protection from Reprisal Statute 1
(41 U.S.C. § 4712); Count II: Violation of False Claims Act Anti-
1 Plaintiff alleges a violation of the Federal Whistleblower Protection
Act but cited the Enhancement of Contractor Protection from Reprisal
Statute. See 41 U.S.C. § 4712. This memorandum will address 41 U.S.C.
§ 4712.
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Retaliation 	Provision 	(31 	U.S.C. 	§ 	3730(h)); 	Count 	III: 	West
Virginia 	Public 	Policy 	Wrongful 	Discharge 	– 	Reporting 	Fraud 	and
Waste; Count IV: West Virginia Public Policy Wrongful Discharge –
Reporting Violations of Federal and State Law; Count V: Breach of
Implied Employment Contract; Count VI: West Virginia Wage Payment
and 	Collection 	Act 	Violations 	(W.Va. 	Code 	§ 	21-5-1 	et 	seq.); 	and
Count VII: Promissory Estoppel/Detrimental Reliance. Id.
Defendants 	filed 	Motion 	to 	Dismiss 	Plaintiff’s 	Complaint
(“Motion”) 	[ECF 	No. 	5] 	and 	Memorandum 	of 	Law 	in 	Support 	of
Defendants’ Motion to Dismiss Plaintiff’s Complaint [ECF No. 6] on
Feb. 26, 2026. Plaintiff filed Plaintiff’s Response in Opposition
on 	March 	20, 	2026 	[ECF 	No. 	11], 	to 	which 	Defendant 	replied 	[ECF
No. 12] on March 27, 2026. In the Motion, Defendants request that
Plaintiff’s Complaint be dismissed with prejudice. ECF No. 5. The
Motion is fully briefed and ripe for review.
II. 	FACTS
Plaintiff 	is 	the 	former 	employee 	of 	HREA, 	whose 	general
manager 	was 	Defendant 	Stout. 	ECF 	No. 	1 	at 	¶¶ 	1, 	11. 	HREA 	is 	a
federal 	grantee, 	receiving 	$20 	million 	in 	federal 	funds 	from 	the
United 	States 	Department 	of 	Agriculture 	(“USDA”) 	for 	fiber 	optic
infrastructure 	and 	installation 	and 	operates 	under 	the 	federal
Rural 	Electrification 	Act 	of 	1935. 	Id. 	Plaintiff 	served 	as 	Human
Resources 	(“HR”) 	Manager 	for 	nearly 	five 	years 	before 	he 	was
terminated on March 28, 2025. Id. at ¶ 1-2.
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Plaintiff 	states 	in 	the 	Complaint 	that 	HREA 	written 	board
policies 	govern 	employee 	conduct, 	whistleblowing, 	retention 	of
legal 	counsel, 	board 	approvals 	for 	personnel 	decisions,
performance 	evaluations, 	compensation, 	and 	termination. 	Id. 	at 	¶
12.
Plaintiff 	alleges 	that 	around 	March 	2024 	he 	reported
fraudulent activity by Defendant Stout to HREA Accounting Manager
Christy 	Cleghorn. 	Id. 	at 	¶ 	19. 	Among 	these 	allegations 	were 	(1)
Plaintiff discovered in the course of his employment that Defendant
Stout sold a 2012 Dodge 5500 bucket truck worth $40,000-$50,000 to
former 	board 	president 	and 	current 	HREA 	board 	member 	Jeff 	Nelson
for 	7-8% 	market 	value 	at 	$3,300, 	(2) 	Defendant 	Stout 	manipulated
his personal leave accruals to secure a $100,000 retirement payout,
in violation of HREA policy, (3) Defendant Stout gave his personal
acquaintance 	and 	neighbor, 	Ty 	Chapman, 	a 	substantial 	raise 	and
promotion without board approval or performance evaluation, which
was 	required 	by 	HREA 	policy, 	and 	(4) 	Defendant 	Stout 	used 	HREA
equipment 	to 	monitor 	HREA 	members’ 	and 	employees’ 	spouses’
internet activity without their consent. Id. at ¶¶ 14-18. Plaintiff
also 	informed 	HREA 	Board 	President 	Bill 	Suan 	of 	these 	activities
on Dec. 15, 2024. Id. at ¶ 19.
After 	Plaintiff 	reported 	this 	activity, 	Cleghorn 	received 	a
10% pay raise in January 2025. Id. at ¶ 24. Also in January 2025,
one 	of 	Plaintiff’s 	coworkers 	asked 	him 	if 	he 	had 	been 	“demoted.”
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Id. at ¶ 27. Furthermore, a new warehouse position was created and
filled in Feb. 2025. Id. at ¶ 25. On March 28, 2025, Plaintiff was
terminated due to “lack of cash flow.” Id. at 30. Plaintiff’s job
was 	terminated 	without 	board 	approval. 	Id. 	This 	civil 	action
followed.
III. LEGAL STANDARD
a. Rule 12(b)(6) of the Federal Rules of Civil Procedure
Rule 	12(b)(6) 	allows 	a 	defendant 	to 	move 	for 	dismissal 	upon
the 	ground 	that 	a 	complaint 	does 	not 	“state 	a 	claim 	upon 	which
relief can be granted.” In ruling on a 12(b)(6) motion to dismiss,
a 	court 	“must 	accept 	as 	true 	all 	of 	the 	factual 	allegations
contained in the complaint.” Anderson v. Sara Lee Corp., 508 F.3d
181, 188 (4th Cir. 2007) (quoting Erickson v. Pardus, 551 U.S. 89,
94 	(2007)). 	A 	court 	is 	“not 	bound 	to 	accept 	as 	true 	a 	legal
conclusion 	couched 	as 	a 	factual 	allegation.” 	Papasan 	v. 	Allain,
478 U.S. 265, 286 (1986).
A 	court 	should 	dismiss 	a 	complaint 	if 	it 	does 	not 	contain
“enough facts to state a claim to relief that is plausible on its
face.” 	Bell 	Atlantic 	Corp. 	v. 	Twombly, 	550 	U.S. 	544, 	570 	(2007).
Plausibility 	exists 	“when 	the 	plaintiff 	pleads 	factual 	content
that 	allows 	the 	court 	to 	draw 	the 	reasonable 	inference 	that 	the
defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal,
556 	U.S. 	662, 	678 	(2009). 	A 	motion 	to 	dismiss 	“does 	not 	resolve
contests 	surrounding 	the 	facts, 	the 	merits 	of 	a 	claim, 	or 	the
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applicability 	of 	defenses.” 	Republican 	Party 	of 	N.C. 	v. 	Martin,
980 	F.2d 	942, 	952 	(4th 	Cir. 	1992). 	Dismissal 	is 	appropriate 	only
if 	“it 	appears 	to 	be 	a 	certainty 	that 	the 	plaintiff 	would 	be
entitled 	to 	no 	relief 	under 	any 	state 	of 	facts 	which 	could 	be
proven in support of its claim.” Johnson v. Mueller, 415 F.2d 354,
355 (4th Cir. 1969).
IV. 	DISCUSSION
Defendant 	filed 	its 	Motion 	to 	Dismiss 	with 	Prejudice 	[ECF 	No.
5] 	pursuant 	to 	Rule 	12(b)(6) 	of 	the 	Federal 	Rules 	of 	Civil
Procedure. ECF No. 5. For the following reasons, Defendant’s Motion
is GRANTED in part DENIED in part.
A. Defendant’s motion to dismiss is DENIED as to Count I because
Plaintiff 	has 	properly 	pled 	the 	allegations 	and 	the 	failure
to exhaust defense cannot be considered in this case.
Defendant’s motion to dismiss is DENIED because Plaintiff has
properly pled protected disclosures of gross mismanagement, gross
waste 	of 	funds, 	and 	abuse 	of 	authority, 	and 	violation 	of 	a 	law,
rule, 	or 	regulation 	related 	to 	federal 	funds. 	Furthermore,
Defendant’s 	affirmative 	defense 	of 	failure 	to 	exhaust
administrative 	remedies 	cannot 	be 	considered 	in 	this 	motion
because 	the 	necessary 	facts 	do 	not 	appear 	on 	the 	face 	of 	the
complaint. 	A 	claimant 	under 	41 	U.S.C. 	§ 	4712 	must 	exhaust
administrative 	remedies 	prior 	to 	filing 	suit 	in 	federal 	court.
Robertson v. Intratek, 976 F.3d 575, 580 (5th Cir. 2020). However,
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failure 	to 	exhaust 	administrative 	remedies 	is 	widely 	regarded 	as
an 	affirmative 	defense 	that 	need 	not 	be 	anticipatorily 	pled 	by
plaintiffs. Jones v. Bock, 549 U.S. 199, 212 (2007).
Defendant 	asserts 	that 	Plaintiff 	has 	not 	exhausted 	all
administrative remedies in its Motion. ECF No. 5 at p. 3. Plaintiff
contends, however, that failure to exhaust administrative remedies
cannot 	warrant 	dismissal 	under 	Fed. 	R. 	Civ. 	Pro. 	12(b)(6) 	if 	all
facts 	necessary 	to 	the 	defense 	do 	not 	appear 	on 	the 	face 	of 	the
complaint. ECF No. 11, at p. 5. Nonetheless, Plaintiff attaches a
complaint 	and 	an 	email 	receipt 	to 	his 	Response 	showing 	that 	he
filed a complaint with the Office of the Inspector General for the
USDA. Id., Ex. 1. The “Date” line of the complaint is left empty,
and 	Plaintiff 	does 	not 	include 	the 	date 	of 	when 	he 	filed 	this
complaint. Id.
The first question before this Court is whether the motion to
dismiss 	Count 	I 	is 	governed 	by 	Federal 	Rule 	of 	Civil 	Procedure
12(b)(1) 	or 	12(b)(6). 	For 	the 	claim 	to 	be 	governed 	by 	12(b)(1),
the 	statutory 	provision 	requiring 	administrative 	exhaustion 	must
be 	jurisdictional. 	Louise 	Trauma 	Center 	LLC 	v. 	United 	States
Citizenship 	and 	Immigration 	Services, 	147 	F.4th 	495, 	n. 	1 	(4th
Cir. 	2025). 	An 	administrative 	exhaustion 	requirement 	is
jurisdictional “[o]nly if the statutory text ‘plainly show[s] that
Congress 	imbued 	a 	procedural 	bar 	with 	jurisdictional
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consequences.’” Stewart v. Iancu, 912 F.3d 693, 700 (4th Cir. 2019)
(quoting United States v. Kwai Fun Wong, 575 U.S. 402, 410 (2015)).
The 	Fourth 	Circuit 	has 	not 	yet 	decided 	whether 	41 	U.S.C. 	§
4712’s exhaustion requirement is jurisdictional, but a majority of
courts 	that 	have 	engaged 	in 	this 	analysis 	have 	found 	the
requirement 	to 	be 	non-jurisdictional. 	See 	Jacobs 	Project
Management 	Co. 	v. 	United 	States 	Department 	of 	the 	Interior, 	64
F.4th 123 (3rd Cir. 2023) (holding that 41 U.S.C. § 4712’s timing
requirements 	for 	exhaustion 	of 	administrative 	remedies 	are 	non-
jurisdictional, in part for lack of jurisdictional consequences);
Olson v. Microsoft Corporation, 2025 WL 2664321, No. 3:25-cv-0774-
D 	*2-3 	(Sept. 	17, 	2025 	N.D. 	Tex) 	(same). 	Thus, 	the 	motion 	to
dismiss Count I should be governed by Rule 12(b)(6).
Under Rule 12(b)(6), a court may consider documents "integral
and 	explicitly 	relied 	on 	in 	the 	complaint" 	without 	converting 	a
motion to dismiss into a motion for summary judgment. Robinson v.
Am. Honda Motor Co., 551 F.3d 218, 222-23 (4th Cir. 2009).
Here, Defendant’s assertion that Plaintiff has not exhausted
administrative 	remedies 	cannot 	be 	resolved 	because 	the 	proper
facts do not appear on the face of the Complaint, and Plaintiff’s
attached receipt of filing a complaint with the Inspector General
cannot 	be 	considered. 	First, 	the 	Complaint 	does 	not 	reference
exhaustion 	of 	administrative 	remedies 	or 	the 	fact 	that 	Plaintiff
filed a Complaint. See ECF No. 1. Although Plaintiff attached the
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complaint he filed with the Inspector General of the USDA and the
receipt of such filing, this document cannot be considered because
it is not explicitly relied upon in the Complaint. 2 See id. Thus,
the 	affirmative 	defense 	of 	failure 	to 	exhaust 	administrative
remedies cannot be considered here and this Court must look to the
merits of the claim.
41 U.S.C. § 4712 is the whistleblower protection provision of
the 	National 	Defense 	Authorization 	Act 	(“NDAA”). 	41 	U.S.C. 	§
4712(a)(1) provides that:
An 	employee 	of 	a 	contractor, 	subcontractor,
grantee, 	subgrantee, 	or 	personal 	services
contractor may not be discharged, demoted, or
otherwise discriminated against as a reprisal
for 	disclosing 	to 	a 	person 	or 	body 	described
in paragraph (2) information that the employee
reasonably 	believes 	is 	evidence 	of 	gross
mismanagement of a Federal contract or grant,
a 	gross 	waste 	of 	Federal 	funds, 	an 	abuse 	of
authority 	relating 	to 	a 	Federal 	contract 	or
grant, 	a 	substantial 	and 	specific 	danger 	to
public 	health 	or 	safety, 	or 	a 	violation 	of
law, rule, or regulation related to a Federal
contract 	(including 	the 	competition 	for 	or
negotiation of a contract) or grant.
41 	U.S.C. 	§ 	4712(a)(1). 	Thus, 	to 	state 	a 	claim 	for 	relief 	under
this statute, an employee of a federal grant recipient must plead
facts sufficient to show that (1) he “reasonably believe[d] he was
2 Even if the receipt and complaint could be considered for this
motion, it would not be dispositive because Plaintiff does not provide
the date that the complaint was filed. See ECF No. 3, Ex. 1. Under the
statute, Plaintiff must give the Inspector General at least 210 days
to produce a report before remedies are “exhausted.” 41 U.S.C. §
4712(c)(2).
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disclosing evidence” of “gross mismanagement of a Federal contract
or grant, a gross waste of Federal funds, an abuse of authority .
. 	. 	or 	a 	violation 	of 	a 	law, 	rule, 	or 	regulation 	related 	to 	a
Federal 	contract” 	(2) 	he 	made 	a 	protected 	disclosure 	of 	such
evidence 	to 	someone 	described 	in 	41 	U.S.C. 	§ 	4712(a)(2), 	and 	(3)
“the protected disclosure was a ‘contributing factor’ to an adverse
personnel 	action.” 	Patel 	v. 	Credence 	Mgmt. 	Sols., 	No.
120CV00427RDAJFA, 2021 WL 5447526, at *4(E.D. Va. Nov. 22, 2021).
See 	also 	Prichard 	v. 	Metro. 	Wash. 	Airports 	Auth., 	No. 	1-18-cv-
1432, 2019 WL 5698660, at *12 (E.D. Va. Nov. 4, 2019) (listing the
elements of a prima facie case under 41 U.S.C. § 4712); 41 U.S.C.
§ 4712.
The 	NDAA 	has 	commonly 	been 	compared 	to 	other 	whistleblower
protection acts for interpretation purposes, as pointed out by the
Fifth Circuit:
“The 	NDAA 	is 	a 	relatively 	newer 	statute 	with
scant interpretive case law.” Shea v. Mgmt. &
Training 	Corp., 	580 	F.Supp.3d 	389, 	392 	n.2
(W.D. Tex. 2022) (internal quotation marks and
citation 	omitted). 	Accordingly, 	courts
evaluating NDAA retaliation claims often draw
upon 	the 	analytical 	frameworks 	of 	other
federal 	whistleblower 	provisions. 	See, 	e.g.,
id. 	at 	392–93 	(citing 	Wallace 	v. 	Andeavor
Corp., 	916 	F.3d 	423, 	426–47 	(5th 	Cir. 	2019)
and Craine v. Nat'l Sci. Found., 687 F. App'x
682, 	691 	(10th 	Cir. 	2017), 	which 	analyze
whistleblower-retaliation 	claims 	under 	the
Sarbanes-Oxley 	Act); 	Fuerst 	v. 	Housing
Authority of City of Atlanta, Georgia, 38 F.4 th
860, 872–73 (11th Cir. 2022)] (citing Lachance
v. White, 174 F.3d 1378, 1381 (Fed. Cir. 1999)
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and White v. Dep't of Air Force, 391 F.3d 1377,
1382 	(Fed. 	Cir. 	2004), 	which 	analyze
whistleblower-retaliation 	claims 	under 	the
Whistleblower 	Protection 	Act); 	DuPage 	Reg'l
Off. of Educ. v. U.S. Dep't of Educ., 58 F.4th
326, 351 (7th Cir. 2023) (same, citing Kewley
v. 	Dep't 	of 	Health 	& 	Hum. 	Servs., 	153 	F.3d
1357, 1361–62 (Fed. Cir. 1998) and Whitmore v.
Dep't of Lab., 680 F.3d 1353, 1367 (Fed. Cir.
2012)).
Beltran 	v. 	Lockheed 	Martin 	Corporation, 	No. 	25-10808, 	2026 	WL
788905, 	at 	n. 	2 	(5th 	Cir. 	March 	20, 	2026) 	(per 	curiam). 	Here, 	a
comparison 	of 	the 	NDAA 	and 	the 	Whistleblower 	Protection 	Act 	of
1989 (“WPA”) is useful to this Court. First, both statutes prevent
retaliation 	against 	employees 	for 	legal 	disclosures 	of
information. See generally 5 U.S.C. § 2302; 41 U.S.C. § 4712(a)(1).
More 	specifically, 	both 	the 	NDAA 	and 	the 	WPA 	prohibit 	federal
agencies 	from 	retaliating 	against 	employees 	for 	disclosing
information 	“which 	the 	employee 	reasonably 	believes” 	is 	“a 	gross
waste” of funds or “an abuse of authority,” among other things. 5
U.S.C. 	§ 	2302(b)(8); 3 	41 	U.S.C. 	§ 	4712(a)(1). 	This 	similarity 	in
3 “Any employee who has authority to take, direct others to take,
recommend, or approve any personnel action, shall not, with respect to
such authority—take or fail to take or threaten to take or fail to
take, a personnel action with respect to any employee or applicant for
employment because of—
(a) 	Any disclosure of information by an employee or applicant
which the employee or applicant reasonably believes evidences—
(i) 	Any violation of any law, rule, or regulation, or
(ii) 	Gross mismanagement, a gross waste of funds, an abuse of
authority, or a substantial and specific danger to public
health or safety . . .”
5 U.S.C. § 2302(b)(8).
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purpose and statutory language allows this Court to apply case law
interpreting 	the 	WPA 	to 	the 	language 	of 	the 	NDAA, 	as 	both 	the
Eleventh 	and 	Seventh 	Circuits 	have 	done. 	See 	Fuerst, 	38. 	F.4th
860; DuPage, 58 F.4th 326. Additionally, both statutes are governed
by 	the 	burdens 	of 	proof 	specified 	in 	5 	U.S.C. 	§ 	1221(e). 	See 	5
U.S.C. 	§ 	1221; 	41 	U.S.C. 	§ 	4712(c)(6). 	Thus, 	it 	follows 	that
interpretations 	of 	5 	U.S.C. 	§ 	1221 	in 	the 	context 	of 	the 	WPA 	can
reasonably be applied to the NDAA as well.
1. Reasonable belief
Under the NDAA, a protected disclosure occurs when an employee
reports information that they “reasonably believe” to be evidence
of 	conduct 	the 	statute 	protects 	against. 	41 	U.S.C. 	§ 	4712(a)(1).
For a claimant’s belief to be “reasonable,” it must be “objectively
reasonable 	as 	a 	matter 	of 	law.” 	Fuerst, 	38 	F.4th 	at 	872.
Furthermore, in interpreting the WPA, the Federal Circuit held the
test 	for 	whether 	belief 	is 	reasonable 	is 	to 	determine 	whether 	“a
disinterested observer with knowledge of the essential facts known
to 	and 	readily 	ascertainable 	by 	the 	employee 	reasonably 	conclude
that the actions of the government evidence” gross mismanagement,
gross 	waste 	of 	funds, 	abuse 	of 	authority, 	or 	etc. 	Lachance 	v.
White, 	174 	F.3d 	1378, 	1381 	(Fed. 	Cir. 	1999) 	(“White 	I”)
(interpreting 5 U.S.C. § 2302(b)(8)). See also Campbell v. Wormuth,
No. 	19-2395, 	2022 	WL 	17958643 	(4th 	Cir. 	Dec. 	27, 	2022) 	(adopting
the disinterested observer test for WPA analysis). Furthermore, “a
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purely 	subjective 	perspective 	of 	an 	employee 	is 	not 	sufficient
even if shared by other employees.” Id.
a. Gross Mismanagement
In 	a 	subsequent 	case, 	the 	Federal 	Circuit 	found 	that 	gross
mismanagement is only properly alleged if an employee “disclose[s]
such serious errors . . . that a conclusion . . . [of] err[or] is
not 	debatable 	among 	reasonable 	people.” 	Fuerst, 	38 	F.4th 	at 	873
(quoting 	White 	v. 	Dep’t 	of 	Air 	Force, 	391 	F.3d 	1377, 	1382 	(Fed.
Cir. 2004) (“White II”)). Additionally, “debatable differences of
opinion 	concerning 	matters 	are 	not 	protected 	disclosures.” 	Id.
Rather, 	protected 	disclosures 	must 	be 	“particularly 	egregious
conduct, not run-of-the-mill policy disputes between managers and
employees.” 	Fuerst, 	38 	F.4th 	at 	873. 	See 	also 	Fisher 	v.
Environmental Protection Agency, 108 M.S.P.R. 296 (2008) (“‘Gross
mismanagement’ 	is 	more 	than 	de 	minimis 	wrongdoing 	or 	negligence;
it means a management action or inaction that creates a substantial
risk 	of 	significant 	adverse 	impact 	on 	the 	agency’s 	ability 	to
accomplish 	its 	mission.”) 	An 	actual 	rule 	violation 	may 	establish
reasonable belief under the statute; however, a rule violation is
not 	required. 	Fuerst, 	38 	F.4th 	at 	872. 	Plaintiff 	“only 	needs 	to
show 	that 	[he] 	had 	(1) 	a 	reasonable 	belief 	that 	the 	information
disclosed (2) was evidence of gross mismanagement.” Id.
Here, 	taking 	all 	the 	pleaded 	facts 	as 	true, 	Plaintiff 	has
properly 	alleged 	gross 	mismanagement 	related 	to 	the 	grant 	funds
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the 	company 	has 	been 	provided. 	Plaintiff 	alleges 	Defendant 	Stout
“manipulated his own personal leave accruals” in violation of HREA
policy 	and 	hired 	an 	unqualified 	“personal 	acquaintance 	and
neighbor” to become HREA Operations Manager without Board approval
or 	performance 	evaluation, 	also 	in 	violation 	of 	HREA 	policy. 	ECF
No. 	1 	at 	¶¶ 	15-16. 	The 	fact 	that 	these 	alleged 	actions 	violate
company 	policies, 	which 	Plaintiff 	would 	have 	knowledge 	of 	given
his role of HR Manager for nearly five years, support Plaintiff’s
belief was reasonable. ECF No. 1 at ¶ 7. Furthermore, both actions
rise above the level of “difference of opinion” or “policy dispute”
between 	two 	employees. 	Although 	Plaintiff 	does 	not 	specifically
plead the funds used in both acts of alleged misconduct were funds
from 	federal 	grants, 	the 	fact 	HREA 	has 	received 	over 	$20 	million
in 	federal 	grants 	from 	the 	USDA 	and 	operates 	under 	the 	federal
Rural Electrification Act of 1935 is enough to reasonably conclude
federal 	funds 	were 	used 	here. 	ECF 	No. 	1 	at 	¶ 	1. 	Furthermore,
Defendant does not contest the use of federal funds in the alleged
incidents. 	See 	ECF 	No. 	6. 	For 	the 	reasons 	above, 	Plaintiff
satisfies element one of the statute as to the gross mismanagement
claim.
b. Gross waste of Federal funds
“A 	gross 	waste 	of 	funds 	requires 	more 	than 	debatable
expenditures that is significantly out of proportion to the benefit
reasonably 	expected 	to 	accrue 	to 	the 	government.” 	Wen 	Chiann 	Yeh
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v. 	Merit 	Sys. 	Prot. 	Bd., 	527 	Fed. 	Appx. 	896, 	900-01 	(Fed. 	Cir.
2013) (interpreting the WPA).
Here, 	Plaintiff 	successfully 	alleges 	reasonable 	belief 	of
gross waste of federal funds because this expenditure provides no
discernible benefit to the government on the facts pled. Plaintiff
alleges Defendant Stout sold a company truck worth $40,000-$50,000
to 	“former 	board 	president 	and 	current 	HREA 	board 	member 	Jeff
Nelson” 	for 	$3,300—allegedly 	7-8% 	of 	the 	market 	value. 	ECF 	No. 	1
at ¶ 14. Neither party establishes any benefit conferred upon HREA
resulting 	from 	the 	sale 	of 	the 	truck 	for 	$3,300, 	and 	it 	is 	not
apparent to the Court Nelson would provide any further benefit to
HREA 	through 	purchasing 	the 	truck 	for 	7-8% 	of 	market 	value. 	ECF
No. 	1 	at 	¶ 	14. 	Thus, 	Plaintiff 	has 	properly 	pled 	a 	reasonable
belief of gross waste of federal funds.
c. Abuse of Authority
The statute defines “abuse of authority” as “an arbitrary and
capricious 	exercise 	of 	authority 	that 	is 	inconsistent 	with 	the
mission 	of 	the 	executive 	agency 	concerned 	or 	the 	successful
performance 	of 	a 	contract 	or 	grant 	of 	such 	an 	agency.” 	41 	U.S.C.
§ 4712(g)(1). In the context of the WPA, the Federal Circuit goes
a 	step 	further, 	finding 	an 	abuse 	of 	authority 	is 	an 	exercise 	of
power 	which 	“adversely 	affects 	the 	rights 	of 	any 	person 	or 	that
results 	in 	personal 	gain 	or 	advantage 	to 	the 	official 	or 	to
preferred 	other 	persons.” 	Nelson 	v. 	Dep’t 	of 	the 	Army, 	658 	Fed.
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Appx. 1036 (Fed. Cir. 2016) (quoting Wen Chiann Yeh, 527 Fed. App’x
at 900) (interpreting the WPA).
Here, 	Plaintiff 	properly 	asserts 	a 	protected 	disclosure 	of
reasonable 	belief 	of 	abuse 	of 	authority 	based 	on 	the 	alleged
fraudulent 	truck 	sale, 	manipulation 	of 	leave 	accruals, 	and
fraudulent 	hiring 	of 	Chapman 	by 	Defendant 	Stout. 	ECF 	No. 	1 	at 	¶¶
19-23. In all these instances, a reasonable person could find the
actions 	taken 	by 	Defendant 	Stout 	are 	(1) 	inconsistent 	with 	the
mission 	of 	the 	agency 	and 	(2) 	provide 	personal 	gain 	or 	advantage
to himself or preferred other persons.
Taking 	the 	pleaded 	facts 	as 	true, 	the 	hiring 	of 	Chapman 	and
Defendant 	Stout’s 	alleged 	manipulation 	of 	leave 	accruals 	in
violation 	of 	HREA 	company 	policy 	is 	enough 	to 	raise 	an 	inference
that these actions are inconsistent with the agency’s mission. ECF
No. 	1 	at 	¶ 	15-16. 	Furthermore, 	selling 	a 	company 	vehicle 	to 	a
former board member for 7-8% of market value, leaving potentially
$36,700-$46,700 	on 	the 	table 	for 	no 	alleged 	reason, 	can 	also
reasonably be considered contrary to the mission of the agency and
an arbitrary and capricious practice. Id. at ¶ 14.
Moreover, all these alleged actions provided personal benefit
to 	Defendant 	Stout 	or 	another 	preferred 	person. 	The 	alleged
manipulation 	of 	leave 	accruals 	by 	Defendant 	Stout 	to 	provide 	for
a 	$100,000 	retirement 	payout 	granted 	him 	obvious 	personal 	gain.
Id. at ¶ 15. The hiring of Chapman, Defendant Stout’s neighbor and
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acquaintance, 	without 	board 	approval 	when 	he 	was 	allegedly 	not
qualified 	provided 	Chapman 	with 	personal 	gain. 	Id. 	at 	¶ 	16.
Finally, 	selling 	a 	company 	truck 	to 	former 	board 	president 	and
current 	member, 	Nelson, 	for 	7-8% 	of 	its 	market 	value 	provided
Nelson with personal gain. Id. at ¶ 14. For the foregoing reasons,
this Court finds Plaintiff properly pled reasonable belief of abuse
of authority related to federal funds.
d. Violation of law, rule, or regulation
Plaintiff 	must 	allege 	reasonable 	belief 	that 	his 	disclosure
is 	evidence 	of 	a 	violation 	of 	a 	law, 	rule, 	or 	regulation 	related
to 	a 	Federal 	contract 	or 	grant. 	41 	U.S.C. 	§ 	4712(a)(1). 	For 	a
violation of law to be “related to” a federal contract there must
be “an actual nexus” or an “association or connection” between the
contract and the law. Ficarra v. SourceAmerica, No. 1:19-CV-01025,
2020 	WL 	1606396, 	at 	*4 	(E.D. 	Va. 	Apr. 	1, 	2020) 	(holding 	that 	an
employee’s disclosure of a federal grantee underreporting profits
related 	to 	a 	non-governmental 	contract 	did 	not 	relate 	to 	the
federal 	grant). 	At 	the 	motion 	to 	dismiss 	stage 	an 	employee 	must
only 	plead 	an 	objectively 	reasonable 	belief 	that 	the 	disclosed
action constitutes a violation of law. Fuerst, 38 F.4th at 872.
Here, Plaintiff has sufficiently alleged reasonable belief of
a violation of the Electronic Communications Privacy Act (“ECPA”)
of 1986 (18 U.S.C. § 2511) by Defendant Stout. The ECPA prohibits
the 	unauthorized 	interception 	of 	“any 	wire, 	oral, 	or 	electronic
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communication.” 	18 	U.S.C. 	§ 	2511(1)(a). 	Plaintiff 	alleges 	he
personally 	witnessed 	Defendant 	Stout 	using 	“HREA 	administrative
tools and/or electronic devices to monitor and access HREA members’
and employees’ spouses’ internet activity without their consent.”
ECF 	No. 	1 	at 	¶ 	17. 	Furthermore, 	Plaintiff 	alleges 	when 	he
questioned 	Defendant 	Stout 	about 	this 	practice, 	Stout 	stated 	“I
provide the internet, I can see what I want.” Id. It is reasonable
to 	believe 	this 	action 	constituted 	an 	intentional, 	unauthorized
interception of an electronic communication under the ECPA.
Additionally, Plaintiff pleads “an actual nexus” between this
action 	and 	the 	federal 	contract, 	because 	federal 	grants 	fund 	the
“fiber 	optic 	infrastructure 	and/or 	installation” 	by 	which
Defendant 	Stout 	was 	allegedly 	monitoring 	customers. 	Id. 	at 	¶ 	1.
Unlike 	in 	Ficarra, 	where 	the 	Plaintiff 	reported 	conduct 	that
related 	to 	funds 	provided 	by 	a 	non-governmental 	contract,
Plaintiff here has reported conduct related to the funding provided
by 	the 	USDA. 	Thus, 	Plaintiff 	has 	properly 	pled 	reasonable 	belief
of a violation of law.
2. Protected 	disclosure 	made 	to 	someone 	specified 	in 	§
4712(a)(2)
Plaintiff 	has 	successfully 	satisfied 	the 	second 	element 	of
the 	statute 	because 	he 	made 	a 	protected 	disclosure 	to 	HREA 	Board
President Suan and Accounting Manager Cleghorn. Under § 4712(a)(2)
of 	the 	NDAA, 	employees 	must 	make 	protected 	disclosures 	to 	a
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specified 	group 	of 	people, 	one 	being 	“a 	management 	official 	or
other 	employee 	of 	the 	contractor, 	subcontractor, 	grantee,
subgrantee, 	or 	personal 	services 	contractor 	who 	has 	the
responsibility 	to 	investigate, 	discover, 	or 	address 	misconduct.”
41 U.S.C. § 4712(a)(2)(G).
Here, Plaintiff disclosed information regarding the allegedly
fraudulent 	truck 	sale, 	Defendant 	Stout’s 	alleged 	personal 	leave
accrual 	manipulation, 	the 	alleged 	improper 	promotion 	of 	Ty
Chapman, 	and 	the 	alleged 	violation 	of 	the 	ECPA 	to 	Accounting
Manager 	Cleghorn 	in 	July 	2024 	and 	to 	Board 	President 	Suan 	on
December 15, 2024. ECF No. 1 at ¶¶ 19-23, 60. While Plaintiff does
not specifically plead that Suan is a “management official” in the
Complaint, it would be reasonable to assume that the President of
the 	Board 	of 	a 	company 	would 	be 	considered 	a 	management 	official
with 	responsibilities 	to 	investigate 	misconduct, 	or 	delegate
another 	to 	investigate 	such 	conduct. 	Additionally, 	Plaintiff
disclosed 	all 	these 	incidents 	to 	Cleghorn 	in 	March 	2024 	and 	“the
latter part of 2024.” Id. at ¶ 19. It is reasonable to believe the
accounting manager of the company would have the responsibility to
investigate 	alleged 	financial 	misconduct. 	Thus, 	Plaintiff 	has
satisfied element two by making a protected disclosure to a person
defined in the statute.
3. Contributing Factor
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Plaintiff 	has 	also 	successfully 	pled 	his 	protected
disclosures 	were 	a 	contributing 	factor 	to 	his 	termination. 	A
protected 	disclosure 	can 	be 	considered 	a 	contributing 	factor 	to
termination if Plaintiff provides circumstantial evidence showing
“(A) 	the 	official 	taking 	the 	personnel 	action 	knew 	of 	the
disclosure 	or 	protected 	activity; 	and 	(B) 	the 	personnel 	action
occurred 	within 	a 	period 	of 	time 	such 	that 	a 	reasonable 	person
could 	conclude 	that 	the 	disclosure 	or 	protected 	activity 	was 	a
contributing factor in the personnel action.” Mikhaylov v. Dep’t.
of 	Homeland 	Security, 	62 	F.4th 	862 	(4th 	Cir. 	2023) 	(quoting 	5
U.S.C. § 1221(e)(2)).
In the context of the WPA, the Fourth Circuit has found that
a 	“lengthy 	lapse 	between 	the 	employer 	becoming 	aware 	of 	the
claimant’s 	protected 	activity 	and 	the 	alleged 	adverse 	employment
action negate[s] any inference that a causal connection existed.”
Hooven-Lewis v. Caldera, 249 F.3d 259, 278 (4th Cir. 2001 (finding
that 	a 	six-month 	lag 	between 	protected 	activity 	and 	termination
did 	not 	justify 	an 	inference 	of 	causation). 	See 	also 	Causey 	v.
Balog, 162 F.3d 795, 803 (4th Cir. 1998) (finding that a 13-month
interval 	was 	insufficient 	to 	prove 	causal 	connection); 	Conner 	v.
Schnuck Markets, Inc., 121 F.3d 1390, 1395 (10 th Cir. 1997) (holding
that 	a 	four-month 	time 	period 	between 	disclosure 	and 	personnel
action could not prove causation).
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Here, Plaintiff has sufficiently alleged that his disclosures
were 	contributing 	factors 	to 	his 	termination. 	Plaintiff 	provides
two pieces of circumstantial evidence to show Defendant Stout was
aware 	of 	his 	disclosures. 	First, 	he 	asserts 	Cleghorn 	received 	a
10% 	pay 	increase 	in 	January 	2025, 	after 	Plaintiff 	reiterated 	his
concerns to her in “the latter part of 2024.” ECF No. 1 at ¶¶ 19,
24. Plaintiff alleges this raise was “designed to reward Cleghorn’s
loyalty 	and/or 	silence 	and/or 	to 	incentivize 	her 	to 	provide
information 	about 	Plaintiff’s 	whistleblowing 	to 	GM 	Stout.” 	Id.
Furthermore, 	Plaintiff 	asserts 	Cleghorn 	informed 	Defendant 	Stout
of Plaintiff’s reports around the time of this raise. Id. Second,
Plaintiff asserts on January 30, 2025, one of his coworkers asked
him if he “had been demoted,” Id. at ¶ 27. Plaintiff contends this
incident evidences Cleghorn and Stout were discussing Plaintiff’s
“job status and potential termination” in January 2025. Id. At the
motion 	to 	dismiss 	stage 	and 	in 	the 	absence 	of 	discovery, 	this
circumstantial evidence sufficiently demonstrates Defendant Stout
knew of Plaintiff’s protected disclosures. Furthermore, Plaintiff
was 	terminated 	on 	March 	28, 	2025, 	just 	two 	months 	after 	Cleghorn
received a raise and Plaintiff’s coworker asked about his demotion.
Id. 	at 	¶ 	30. 	This 	two-month 	gap 	is 	much 	shorter 	than 	the 	time
lapses 	that 	the 	Fourth 	Circuit 	has 	previously 	held 	to 	be
unreasonable or insufficient to prove causation.
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Plaintiff relies on the assertion that Defendant’s reason for
terminating 	him 	was 	“pretextual” 	as 	evidence 	of 	Plaintiff’s
protected disclosures being a contributing factor to termination,
however, the Court does not consider that evidence. ECF No. 11 at
p. 	7. 	The 	truthfulness 	of 	the 	reason 	for 	termination 	is 	not 	a
consideration 	under 	5 	U.S.C. 	§ 	1221(e). 	Furthermore, 	the 	Fourth
Circuit has not considered whether the reason for termination was
pretextual in WPA or NDAA cases. 	Plaintiff seems to rely on Title
VII 	retaliation 	cases 	and 	the 	McDonnell 	Douglas 	framework 	to
support 	this 	point. 	See 	ECF 	No. 	11 	at 	p. 	7; 	Foster 	v. 	University
of Maryland-Eastern Shore, 787 F.3d 243 (4th Cir. 2015). This Court
does 	not 	consider 	this 	argument 	because 	the 	NDAA 	and 	the 	WPA 	are
both governed by 5 U.S.C. § 1221(e), making the WPA a more accurate
statutory comparison.
Nonetheless, 	Plaintiff 	has 	asserted 	a 	prima 	facie 	case 	of 	a
violation 	of 	41 	U.S.C. 	§ 	4712 	and 	this 	Court 	DENIES 	Defendant’s
Motion as to Count I.
B. Defendant’s Motion is GRANTED as to Count II because none of
Plaintiff’s claims bear a nexus to an FCA violation, thus the
disclosures are not protected activity.
This 	Court 	GRANTS 	Defendant’s 	Motion 	as 	to 	Count 	II 	because
Plaintiff has not properly pled protected activity under the False
Claims Act (“FCA”). The FCA “is designed to discourage contractor
fraud 	against 	the 	federal 	government.” 	Glynn 	v. 	EDO 	Corp., 	710
F.3d 	209, 	213 	(4th 	Cir. 	2013). 	It 	imposes 	civil 	liability 	on 	any
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person 	who 	“‘knowingly 	presents, 	or 	causes 	to 	be 	presented, 	[to
the 	United 	States 	government] 	a 	false 	or 	fraudulent 	claim 	for
payment 	or 	approval’ 	or 	‘knowingly 	makes, 	uses, 	or 	causes 	to 	be
made 	or 	used, 	a 	false 	record 	or 	statement 	to 	get 	a 	false 	or
fraudulent 	claim 	paid 	or 	approved 	by 	the 	Government.’” 	United
States ex rel. Wilson v. Kellogg Brown & Root, Inc., 525 F.3d 370,
376 	(4th 	Cir. 	2008) 	(citing 	31 	U.S.C. 	§ 	3729(a)). 	The 	FCA 	also
includes a whistleblower provision, which creates a cause of action
for
[a]ny 	employee, 	contractor, 	or 	agent 	...
discharged, 	demoted, 	suspended, 	threatened,
harassed, or in any other manner discriminated
against 	in 	the 	terms 	and 	conditions 	of
employment because of lawful acts done by the
employee, 	contractor, 	or 	agent 	... 	in
furtherance of an action under this section or
other efforts to stop 1 or more violations of
this subchapter.
31 U.S.C. § 3730(h)(1). To properly plead a violation of 31 U.S.C.
§ 	3730(h), 	Plaintiff 	must 	plead 	facts 	that 	give 	rise 	to 	a
“reasonable 	inference” 	that 	“(1) 	he 	engaged 	in 	‘protected
activity;’ (2) his employer knew about the protected activity; and
(3) his employer took adverse action against him as a result.”
United States ex rel. Grant v. United Airlines Inc., 912 F.3d 190,
200 	(4th 	Cir. 	2018). 	Plaintiff 	must 	either 	plead 	acts 	“in
furtherance 	of 	an 	[FCA 	action]” 	or 	“other 	efforts 	to 	stop 	1 	or
more [FCA violations]” to adequately plead protected activity. Id.
(quoting 	31 	U.S.C. 	§ 	3730(h)(1)). 	When 	a 	Plaintiff 	pleads 	they
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engaged 	in 	efforts 	to 	stop 	FCA 	violations, 	they 	are 	subjected 	to
an 	“objective 	reasonableness” 	standard. 	Id. 	at 	201. 	The 	Fourth
Circuit has found:
Under 	this 	standard, 	an 	act 	constitutes
protected activity where it is motivated by an
objectively 	reasonable 	belief 	that 	the
employer 	is 	violating, 	or 	soon 	will 	violate,
the 	FCA. 	A 	belief 	is 	objectively 	reasonable
when the plaintiff alleges facts sufficient to
show 	that 	he 	believed 	his 	employer 	was
violating 	the 	FCA, 	that 	this 	belief 	was
reasonable, that he took action based on that
belief, and that his actions were designed to
stop 	one 	or 	more 	violations 	of 	the 	FCA.
However, 	while 	the 	plaintiff's 	actions 	need
not “lead to a viable FCA action” as required
under the distinct possibility standard, they
must 	still 	have 	a 	nexus 	to 	an 	FCA 	violation.
United 	Airlines 	Inc., 	912 	F.3d 	at 	201–02. 	Additionally, 	“[t]he
employee's investigation must concern ‘false or fraudulent claims’
or it is not protected activity under the FCA.” Glynn, 710 F.3d at
214. 	Allegations 	of 	regulatory 	violations 	are 	not 	enough 	“in 	the
absence 	of 	actual 	fraudulent 	conduct.” 	United 	States 	ex 	rel.
Rostholder 	v. 	Omnicare, 	Inc., 	745 	F.3d 	694, 	702 	(4th 	Cir. 	2014)
(finding 	failure 	to 	identify 	“any 	false 	statement 	or 	other
fraudulent 	misrepresentation” 	made 	“to 	the 	government” 	supported
dismissal of a FCA retaliation claim).
The Fourth Circuit has not elaborated on the meaning of “nexus
to 	an 	FCA 	violation[,]” 	but 	one 	district 	court 	interpreted 	it 	to
mean the conduct being disclosed in the protected disclosure must
be 	“a 	request 	or 	demand 	for 	money 	or 	property 	from 	the 	United
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States.” 	Nario 	v. 	Nat'l 	OnDemand, 	Inc., 	No. 	1:21CV711, 	2022 	WL
1241435, 	at 	*3 	(M.D.N.C. 	Apr. 	27, 	2022) 	(quoting 	31 	U.S.C. 	§
3729(b)(2)(A)). See also Torres v. IAP Worldwide Servs., Inc., No.
5:21-CV-00084-M, 	2025 	WL 	1106998, 	at 	*6 	(E.D.N.C. 	Apr. 	14, 	2025)
(finding 	Plaintiff’s 	complaints 	they 	were 	not 	being 	paid 	enough
did 	not 	“prevent 	fraud 	against 	the 	United 	States, 	so 	they 	do 	not
constitute protected activity”). Furthermore, allegations of waste
of Federal funds do not constitute fraud. Torres, 2025 WL 1106998,
at 	* 	6 	(“Imprudent 	spending 	habits 	do 	not 	amount 	to 	‘knowing
misrepresentation or knowing concealment of a material fact.’”)
Defendant’s 	Motion 	to 	Dismiss 	is 	GRANTED 	because 	none 	of
Plaintiff’s 	claims 	have 	a 	nexus 	to 	an 	FCA 	violation. 	Plaintiff
does 	not 	specify 	which 	claims 	he 	believes 	constitute 	FCA
violations, 	but 	Defendant 	identifies 	(1) 	the 	alleged 	fraudulent
truck 	sale 	(2) 	manipulation 	of 	leave 	accruals 	by 	Defendant 	Stout
and 	(3) 	the 	hiring 	of 	Chapman 	in 	his 	Motion. 	ECF 	No. 	6 	at 	p. 	4.
These claims will be addressed in order.
First, the truck sale in which Defendant Stout allegedly sold
a former board member a company truck for 7-8% of its market value
cannot constitute a false claim because Plaintiff does not allege
that 	any 	false 	claim 	or 	fraudulent 	conduct 	related 	to 	the
government 	regarding 	this 	sale. 	ECF 	No. 	1 	at 	¶ 	14. 	Plaintiff, 	at
most, 	alleges 	waste 	of 	Federal 	funds, 	which 	does 	not 	rise 	to 	the
level 	of 	fraud 	against 	the 	government 	which 	the 	FCA 	protects
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against. While Plaintiff may have subjectively believed this rose
to 	the 	level 	of 	an 	FCA 	violation, 	his 	belief 	was 	not 	objectively
reasonable because these allegations do not match the contours of
an FCA violation.
The 	allegation 	that 	Defendant 	Stout 	manipulated 	his 	leave
accruals 	bears 	more 	of 	a 	resemblance 	to 	an 	FCA 	violation 	because
it 	relates 	directly 	to 	company 	funds; 	however, 	it 	still 	does 	not
rise to the level of an objectively reasonable belief because all
that is alleged is a violation of HREA policy. ECF No. 1 at ¶ 15.
Plaintiff 	has 	alleged 	no 	fraudulent 	conduct 	or 	statement 	towards
the 	government, 	rather 	a 	misuse 	of 	funds 	already 	provided. 	Given
violations of FDA safety regulations cannot constitute an FCA claim
on their own, internal policy violations related to leave carryover
on their own surely do not constitute the level of fraud described
in 	the 	FCA. 	ECF 	No. 	1 	at 	¶ 	15. 	See 	Rostholder, 	745 	F.3d 	at 	702
(“Allegations 	of 	regulatory 	violations 	fail 	to 	support 	FCA
liability 	. 	. 	. 	FCA 	liability 	based 	on 	a 	false 	certification 	to
the 	government 	will 	lie 	only 	if 	compliance 	with 	the 	statutes 	or
regulations 	was 	a 	prerequisite 	to 	gaining 	the 	benefit, 	and 	the
defendant 	affirmatively 	certified 	such 	compliance.”) 	(internal
citations and quotations omitted). Here, Plaintiff clearly alleges
Defendant 	Stout 	is 	simply 	ignoring 	HREA 	policy, 	rather 	than
pretending he is complying with them. ECF No. 1 at ¶ 15. Plaintiff
alleges Defendant Stout stated “he was the CEO and was not subject
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to the policies.” Id. While this is an unfavorable practice, it is
not an allegation that Stout claimed to be following a policy that
he was in fact not following. Thus, Plaintiff’s subjective belief
is not objectively reasonable here.
As 	to 	the 	hiring 	of 	Chapman, 	this 	also 	cannot 	constitute 	an
FCA violation because Plaintiff has merely alleged a violation of
HREA policy, which again is not fraudulent conduct directed at the
government. 	ECF 	No. 	1 	at 	¶ 	16. 	There 	is 	no 	indication 	Defendant
Stout 	lied 	about 	Chapman’s 	qualifications 	to 	the 	government, 	or
that 	the 	government 	even 	required 	Chapman 	to 	have 	the 	experience
that 	HREA 	requires. 	Again, 	Plaintiff’s 	subjective 	belief 	is 	not
objectively reasonable here.
As 	discussed 	in 	Count 	I, 	Plaintiff 	has 	provided 	enough
information 	to 	bring 	about 	a 	reasonable 	inference 	that 	Defendant
Stout knew of these disclosures and Plaintiff was fired two months
later 	as 	a 	result 	of 	that; 	however, 	the 	failure 	to 	show 	the
allegations 	have 	a 	nexus 	to 	an 	FCA 	violation 	prevents 	these
disclosures 	from 	being 	considered 	“protected 	activity” 	under 	the
statute. 	ECF 	No. 	1 	at 	¶¶ 	14-16. 	Therefore, 	this 	Court 	GRANTS
Defendant’s Motion as to Count II.
C. Defendants Motion is GRANTED as to Counts III and IV because
Plaintiff 	has 	failed 	to 	identify 	a 	substantial 	source 	of
public policy to base his Harless claims upon.
Plaintiff’s 	Harless 	claims 	are 	fatally 	flawed 	because 	he
fails 	to 	identify 	a 	substantial 	source 	of 	public 	policy 	that 	has
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been breached, and the NDAA and FCA have private rights of action.
“In 	West 	Virginia, 	an 	employment 	relationship 	of 	indefinite
duration is ‘presumed to be terminable at any time at the will of
the employer or of the employee, with or without cause.’” Jackson
v. Vaughn, No. 1:15CV128, 2015 WL 6394510, *2 (N.D.W. Va. Oct. 22,
2015) (Keeley, J.) (citation omitted). However,
The 	rule 	that 	an 	employer 	has 	an 	absolute
right to discharge an at will employee must be
tempered 	by 	the 	principle 	that 	where 	the
employer's motivation for the discharge is to
contravene 	some 	substantial 	public 	policy
principle, then the employer may be liable to
the 	employee 	for 	damages 	occasioned 	by 	this
discharge.
Syl., 	Harless 	v. 	First 	Nat'l 	Bank 	of 	Fairmont, 	246 	S.E.2d 	270
(W.Va. 1978). To succeed on a Harless retaliatory discharge claim,
a plaintiff must prove: (1) “[t]hat a clear public policy existed
and was manifested in a state or federal constitution, statute or
administrative 	regulation, 	or 	in 	the 	common 	law”; 	(2) 	“[t]hat
dismissing 	employees 	under 	circumstances 	like 	those 	involved 	in
the plaintiff's dismissal would jeopardize the public policy”; (3)
“[t]he 	plaintiff's 	dismissal 	was 	motivated 	by 	conduct 	related 	to
the 	public 	policy”; 	and 	(4) 	“[t]he 	employer 	lacked 	overriding
legitimate 	business 	justification 	for 	the 	dismissal.” 	Burke 	v.
Wetzel 	Cnty. 	Comm'n, 	815 	S.E.2d 	520, 	537 	(W.Va. 	2018). 	“The
determination 	whether 	a 	substantial 	public 	policy 	exists 	is 	a
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question of law for the court.” Frohnapfel v. ArcelorMittal Weirton
LLC, 100 F. Supp. 3d 556, 562–63 (N.D.W.Va. 2015).
Federal courts in West Virginia have noted the Supreme Court
of Appeals has intentionally read Harless narrowly. See Baisden v.
CSC-PA, Inc., No. 2:08-cv-01375, 2010 WL 3910193, at *5 (S.D.W.Va.
Oct. 1, 2010) (writing “the West Virginia Supreme Court of Appeals
. 	. 	. 	has 	read 	Harless 	narrowly 	so 	as 	not 	to 	‘unlock 	a 	Pandora's
box 	of 	litigation 	in 	the 	wrongful 	discharge 	arena’”). 	See 	also
Wiley v. Asplundh Tree Expert Co., 4 F.Supp.3d 840, 847 (S.D.W.Va.
2014) (stating “[t]his Court has previously declined to recognize
a new type of Harless claim ... because the West Virginia Supreme
Court 	has 	interpreted 	Harless 	so 	narrowly”). 	The 	United 	States
District 	Court 	for 	the 	Southern 	District 	of 	West 	Virginia, 	in
finding Harless claims do not extend to plaintiffs who are covered
by 	collective 	bargaining 	agreements, 	wrote 	that 	“[a]ny 	expansion
of the claim is best left to the West Virginia courts.” Fugate v.
Frontier 	W. 	Va., 	Inc., 	No. 	2:17-cv-00559, 	2017 	WL 	3065216, 	at 	*2
(S.D.W.Va. July 19, 2017).
a. NDAA (41 U.S.C. § 4712) and FCA (31 U.S.C. § 3730) claims
Defendant’s 	Motion 	is 	GRANTED 	as 	to 	Plaintiff’s 	Harless
claims 	under 	the 	NDAA 	and 	the 	FCA 	because 	both 	statutes 	have 	a
private 	right 	of 	action. 	If 	the 	public 	policy 	“is 	enforceable 	by
a 	statutory 	cause 	of 	action” 	then 	filing 	a 	Harless 	claim 	is
excessive. 	Jackson 	at 	*3. 	“When 	a 	statutory 	scheme 	provides 	a
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private 	cause 	of 	action 	to 	ensure 	compliance 	with 	its 	underlying
public policy objectives, that statutory cause of action cannot be
displaced by a Harless style common law tort action.” Id. (citation
omitted).
Here, both statutes have a private right of action, evidenced
by the fact that Count I and Count II of Plaintiff’s Complaint are
brought under these statutes. See ECF No. 1. See also 41 U.S.C. §
4712(c)(2) 	(“If 	the 	head 	of 	an 	executive 	agency 	issues 	an 	order
denying relief . . . the complainant may bring a de novo action at
law 	or 	equity 	against 	the 	contractor.”); 	31 	U.S.C. 	§ 	3730(h)(1)
(“Any 	employee, 	contractor, 	or 	agent 	shall 	be 	entitled 	to 	all
relief necessary to make that employee, contractor, or agent whole
. 	. 	. 	.”) 	Thus, 	this 	Court 	GRANTS 	Defendant’s 	Motion 	as 	to
Plaintiff’s Harless claims under the NDAA and the FCA.
b. WV Public Employee Whistleblower Law – W.Va Code § 6C-1-1
Plaintiff’s 	Harless 	claim 	under 	West 	Virginia 	Whistleblower
Law 	(W.Va. 	Code 	§ 	6C-1-1) 	is 	dismissed 	because 	the 	statute 	only
applies to public employees and Plaintiff is a private employee. 4
The 	Supreme 	Court 	of 	Appeals 	of 	West 	Virginia 	has 	found 	“if
whistleblower protections are to be extended to [private employees
under 	§ 	6C-1-1], 	that 	expression 	of 	public 	policy 	should 	be 	made
by 	the 	legislature-not 	the 	Court.” 	Blanda 	v. 	Martin 	& 	Seibert,
4 W.Va. Code 6C-1-1 is listed in the “Public Employees” chapter of West
Virginia Code. See W.Va. Code § 6C-1-1.
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L.C., 836 S.E.2d 519, 529 (W. Va. 2019)(holding a private employee
could 	not 	avail 	herself 	of 	the 	protections 	of 	West 	Virginia
Whistleblower law as it pertains solely to public employees).
Plaintiff does not contest that he is a private employee. See
ECF 	No. 	11. 	Thus, 	this 	Court 	GRANTS 	Defendant’s 	Motion 	as 	to
Plaintiff’s claim under § 6C-1-1.
c. Criminal 	statutes 	prohibiting 	fraud 	and 	misappropriation/
Federal 	and 	state 	laws 	governing 	proper 	use 	of 	government
funds/ 	Common 	law 	principles 	protecting 	those 	who 	report
unlawful conduct
Plaintiff’s 	miscellaneous 	claims 	under 	unspecified 	criminal
statutes, 	federal 	and 	state 	laws, 	and 	common 	law 	principles 	are
dismissed. 	Plaintiff 	must 	specifically 	identify 	the 	source 	of
substantial 	public 	policy 	he 	intends 	to 	base 	his 	Harless 	claim
upon. 	Figlar 	v. 	Simonton 	Windows 	& 	Doors, 	Inc., 	No. 	1:23-CV-30,
2024 WL 389236, at *6 (N.D.W.Va. Feb. 1, 2024). Moreover, as this
Court has stated
it 	is 	incumbent 	upon 	a 	plaintiff 	to 	identify
the 	source 	of 	the 	substantial 	public 	policy
allegedly 	supporting 	a 	Harless 	cause 	of
action. Given the skepticism trial courts must
deploy 	in 	identifying 	new 	Harless 	theories,
the 	Court 	should 	not 	– 	and, 	here, 	will 	not 	–
seek 	out 	that 	which 	Plaintiff 	herself 	failed
to identify.
Id. Furthermore, Plaintiffs, “need to specify the source of legal
authority that recognizes that a substantial West Virginia public
policy as a matter of law at stake in this case.” Wiley v. Asplundh
Tree Expert Co., 4 F.Supp.3d 840, 845 (S.D.W.Va 2014).
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Here, 	Plaintiff 	alleges 	his 	Harless 	claim 	can 	be 	premised
upon 	unspecified 	“criminal 	statutes 	prohibiting 	fraud 	and
misappropriation,” “federal and state laws governing proper use of
government funds,” and “common law principles protecting those who
report 	unlawful 	conduct,” 	in 	addition 	to 	those 	already 	alleged.
ECF No. 1 at ¶ 54. Defendant points out that it is the Plaintiff’s
burden, 	rather 	than 	the 	Court’s, 	to 	specify 	the 	source 	of
substantial 	public 	policy. 	ECF 	No. 	6 	at 	p. 	15. 	Plaintiff 	argues
although 	he 	hasn’t 	identified 	any 	specific 	statute 	or 	area 	of
common law, he has alleged conduct that “implicates specific legal
rules 	against 	fraud, 	misappropriation, 	and 	misuse 	of 	funds,”
rather 	than 	abstract 	ethics. 	ECF 	No. 	11 	at 	p. 	12. 	Nonetheless,
Plaintiff 	has 	not 	identified 	which 	criminal 	statutes, 	additional
federal 	or 	state 	laws, 	or 	common 	law 	principles 	he 	settles 	his
claim 	on. 	See 	ECF 	No. 	1. 	While 	he 	identifies 	conduct 	that 	may
implicate some substantial public policy, his failure to identify
what that public policy is requires his claim to fail as a matter
of law.
d. HREA’s whistleblower policy
Plaintiff’s 	claim 	that 	HREA’s 	internal 	whistleblower 	policy
creates 	substantial 	public 	policy 	which 	a 	Harless 	claim 	can 	be
based upon is also dismissed because there are no instances where
federal 	or 	state 	courts 	have 	based 	a 	Harless 	claim 	on 	internal
business policies. “[T]o identify the sources of public policy for
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purposes 	of 	determining 	whether 	a 	retaliatory 	discharge 	has
occurred, 	. 	. 	. 	[courts] 	look 	to 	established 	precepts 	in 	our
constitution, 	legislative 	enactments, 	legislatively 	approved
regulations, and judicial opinions.” Syl. Pt. 2, Birthisel v. Tri–
Cities Health Services Corp., 424 S.E.2d 606 (W.Va. 1992). Internal
business policies have not been included in this rule by state or
federal courts. See e.g. Harshbarger v. CSX Transp., Inc., 478 F.
Supp. 2d 890, 895 (S.D.W.Va. 2006) (“Plaintiff has failed to allege
a 	viable 	claim 	that 	Defendant 	has 	violated 	public 	policy 	by
allegedly 	failing 	to 	comply 	with 	its 	own 	internal 	policies.”);
Suddreth 	v. 	Maurices 	Inc., 	No. 	5:11-CV-00389, 	2012 	WL 	275393, 	at
*3 	(S.D.W.Va. 	Jan. 	31, 	2012) 	(“The 	focal 	point 	of 	this 	cause 	of
action 	is 	not 	the 	internal 	workings 	or 	policies 	of 	an 	employer 	.
. 	. 	but 	rather 	whether 	a 	public 	policy 	exists 	as 	‘established
precepts 	in 	our 	constitution, 	legislative 	enactments,
legislatively approved regulations, and judicial opinions.’”)
Plaintiff’s purported reason for asserting a claim under this
internal policy is the policy furthers the idea that West Virginia
has 	a 	public 	policy 	against 	fraud 	related 	to 	“publicly 	owned
entities 	and 	federal 	funds.” 	ECF 	No. 	1 	at 	¶ 	54. 	There 	does 	not
appear to be any case law accepting this argument. Thus, the Court
rejects it and dismiss Plaintiff’s claim.
e. ECPA – 18 USC § 2511(4)
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Plaintiff’s Harless claim under the ECPA is dismissed because
he 	again 	fails 	to 	identify 	a 	source 	of 	substantial 	public 	policy
for the claim to rest on. Although Plaintiff relies on a specific
federal statute in this claim (18 U.S.C. § 2511), he fails to show
any instances where West Virginia or federal courts have identified
this statute as a source of substantial public policy. See ECF No.
1 	at 	¶¶ 	59-61; 	ECF 	No. 	11 	at 	p. 	12-14. 	Additionally, 	the 	Supreme
Court 	of 	Appeals 	of 	West 	Virginia 	has 	only 	recognized 	statutory
provisions 	as 	substantial 	public 	policy 	when 	the 	statute 	clearly
discusses public policy. As stated in Blanda,
As this Court made clear in 	Swears v. R.M.
Roach & Sons, Inc., 225 W.Va. 699, 696 S.E.2d
1 (2010), a Harless-based action requires more
than 	simply 	raising 	the 	spectrum 	of 	a
potentially governing law. “The mere citation
of a statutory provision is not sufficient to
state 	a 	cause 	of 	action 	for 	retaliatory
discharge without a showing that the discharge
violated 	the 	public 	policy 	that 	the 	cited
provision clearly mandates.”
Blanda, 	836 	S.E.2d 	at 	527 	(quoting 	Swears, 	696 	S.E.2d 	at 	7). 	The
ECPA 	does 	not 	explicitly 	refer 	to 	public 	policy 	considerations.
See 18 U.S.C. § 2511. 5
5 Defendant 	makes 	several 	arguments 	for 	the 	dismissal 	of 	this 	claim
aside 	from 	the 	failure 	to 	identify 	substantial 	public 	policy 	such 	as
that 	invasion 	of 	privacy 	is 	an 	individual 	action 	not 	a 	public 	action,
and 	that 	Plaintiff 	fails 	to 	plead 	facts 	sufficient 	to 	provide 	relief
upon. ECF No. 6 at p. 15-17. However, this Court need only address the
first argument, as it is dispositive. See Tritle v. Crown Airways, Inc.,
928 F.2d 81, 84 (4th Cir. 1990) (“[we] hold that a state claim which has
not 	been 	recognized 	by 	that 	jurisdiction's 	own 	courts 	constitutes 	a
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Plaintiff’s 	primary 	argument 	in 	response 	to 	the 	assertion
that he has cited no substantial public policy source is the ECPA
itself 	shows 	there 	is 	a 	broad 	public 	interest 	in 	“privacy 	and
lawful 	limitations 	on 	the 	use 	of 	network-control 	tools.” 	ECF 	No.
11 	at 	p. 	13. 	However, 	a 	federal 	statute 	alone 	is 	not 	enough 	to
create 	substantial 	public 	policy 	without 	the 	discretion 	of 	West
Virginia state courts, in most cases.
In 	Farrell 	v. 	Mon 	Health 	Care, 	Inc., 	this 	Court 	found 	HIPPA
could 	be 	a 	source 	of 	substantial 	public 	policy, 	although 	neither
state nor federal case law had acknowledged it as such. Farrell v.
Mon 	Health 	Care, 	Inc., 	No. 	1:23-CV-60, 	2025 	WL 	2740394, 	at 	*9
(N.D.W.Va. 	Sept. 	25, 	2025). 	This 	claim 	rested 	on 	Defendant’s
concession that West Virginia has an interest in preventing medical
record disclosure, as defined by case law. Id. Here, Plaintiff has
failed to identify any case law demonstrating West Virginia has an
interest 	in 	preventing 	violations 	of 	privacy 	rights 	and 	illegal
surveillance. See ECF No 1 at ¶¶ 59-61; ECF No. 6 at p. 17-18; ECF
No. 11 at p. 12-14. Because Plaintiff fails to meet his burden of
identifying 	a 	source 	of 	substantial 	public 	policy, 	his 	Harless
claim under the ECPA fails as a matter of law.
Furthermore, 	Defendant’s 	Motion 	is 	GRANTED 	as 	to 	all
Plaintiff’s Harless claims.
settled question of law, which will not be disturbed by this court absent
the most compelling of circumstances.”)
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D. Defendant’s 	Motion 	is 	GRANTED 	for 	Breach 	of 	Implied
Employment 	Contract 	[Count 	V] 	because 	HREA 	policies
constitute only “aspirational goals” under Younker.
Plaintiff’s 	Breach 	of 	Implied 	Contract 	claims 	is 	dismissed
because 	he 	fails 	to 	plead 	the 	creation 	of 	an 	implied 	contract.
Under 	West 	Virginia 	law, 	generally 	at-will 	employment 	is
terminable at any time. Younker v. Eastern Associated Coal Corp.,
591 S.E.2d 254, 257 (W.Va. 2003). However, “contractual provisions
relating to discharge or job security may alter the at-will status
of a particular employee.” Id. (quoting Bailey v. Sewell Coal Co.,
437 	S.E.2d 	448, 	451 	(W.Va. 	1993)). 	Representations 	made 	in 	an
employee handbook “can meet the normal requirements for formation
of 	an 	implied 	contract” 	necessary 	to 	alter 	such 	status. 	Id. 	See
also Cook v. Heck’s Inc., 342 S.E.2d 453 (W.Va. 1986) (“An employee
handbook 	may 	form 	the 	basis 	of 	a 	unilateral 	contract 	if 	there 	is
a definite promise therein by the employer not to discharge covered
employees except for specified reasons.”) “Any promises alleged to
alter 	the 	presumptive 	relationship 	must 	be 	very 	definite 	to 	be
enforceable.” Id.
The 	Supreme 	Court 	of 	Appeals 	for 	West 	Virginia 	held 	an
employee handbook containing “specified discipline for violations
of 	particular 	rules 	accompanied 	by 	a 	statement 	that 	the
disciplinary 	rules 	constitute 	a 	complete 	list 	is 	prima 	facie
evidence 	of 	an 	offer 	for 	a 	unilateral 	contract 	of 	employment
modifying 	the 	right 	of 	the 	employer 	to 	discharge 	without 	cause.”
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Cook, 342 S.E.2d at 459. On the other hand, the court has found an
employee 	handbook 	containing 	merely 	“aspirational 	goals” 	and 	a
provision stating the handbook is not an exclusive list of company
rules 	does 	not 	constitute 	a 	unilateral 	contract. 	Younker, 	591
S.E.2d at 259.
In 	Younker, 	the 	Court 	found 	Defendant’s 	Code 	of 	Conduct
contained merely aspirational goals when it stated:
All employees are encouraged and obligated to
report any known or suspected Code violations
to 	the 	employee's 	supervisor 	and 	the
appropriate Counsel. No disciplinary or other
retaliatory 	action 	will 	be 	taken 	against 	an
employee 	making 	such 	a 	report 	and 	all
information provided will be maintained in the
strictest confidence.
Id. at 257. The first issue this Court must address is whether it
can 	consider 	the 	relevant 	HREA 	policies 	attached 	to 	Defendant’s
Motion. 	On 	a 	motion 	to 	dismiss, 	the 	Court 	may 	consider 	documents
“integral 	and 	explicitly 	relied 	on 	in 	the 	complaint” 	without
converting a motion to dismiss into a motion for summary judgment.
Robinson, 	551 	F.3d 	at 	222-23. 	Furthermore, 	a 	court 	“may 	consider
a 	document 	submitted 	by 	the 	movant 	that 	was 	not 	attached 	to 	or
expressly 	incorporated 	in 	the 	complaint, 	so 	long 	as 	the 	document
was 	integral 	to 	the 	complaint 	and 	there 	is 	no 	dispute 	about 	the
document’s 	authenticity.” 	Goines 	v. 	Valley 	Cmty. 	Servs. 	Bd., 	822
F.3d 159, 166 (4th Cir. 2016) (citations omitted).
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Plaintiff 	contests 	this 	Court’s 	consideration 	of 	the 	Board
Policies filed by the Defendant because they are not “integral” to
the 	Complaint. 	ECF 	No. 	11 	at 	p. 	15. 	However, 	these 	policies 	are
specifically 	referenced 	in 	the 	Complaint 	and 	form 	the 	basis 	of
Plaintiff’s breach of implied contract claim. ECF No. 1 at ¶¶ 65-
66. 	Plaintiff’s 	assertion 	that 	the 	specific 	language 	of 	these
documents 	cannot 	be 	considered 	in 	the 	way 	Defendant 	suggests 	is
unfounded. 	ECF 	No. 	11 	at 	p. 	15. 	West 	Virginia 	law 	only 	considers
an 	employee 	handbook 	or 	internal 	policies 	to 	create 	an 	implied
contract if it contains language that constitutes a “very definite”
promise. There is no state case law to support a breach of contract
claim based on the “absence of a clear at-will disclaimer and the
existence 	of 	specific 	procedural 	and 	substantive 	constraints 	on
termination,” as Plaintiff suggests Id. at p. 16. Thus, 	this
Court 	can 	consider 	the 	HREA 	policies 	attached 	to 	Defendant’s
Motion. See ECF No. 5 at Ex. 1-5.
This 	Court 	GRANTS 	Defendant’s 	Motion 	as 	to 	Count 	V. 	First,
HREA’s whistleblower policy mirrors that of the policy in Younker,
which only amounted to “aspirational goals.” HREA’s whistleblower
policy 	contains 	a 	retaliation 	provision 	which 	states, 	“[t]his
policy 	is 	intended 	to 	encourage 	and 	enable 	employees 	to 	raise
Concerns for prompt internal investigation and appropriate action.
No 	employee 	who 	in 	good 	faith 	reports 	a 	Concern 	shall 	be 	subject
to retaliation in any form for making a report.” ECF No. 5 at Ex.
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C. 	This 	language 	mirrors 	the 	language 	in 	Younker, 	which 	was 	not
enough to create a unilateral contract. See Younker, 591 S.E.2d at
257. 	Furthermore, 	HREA’s 	Progressive 	Discipline 	Policy 	states
twice “the aforementioned list [of terminable offenses] is not an
all 	inclusive 	list 	of 	potential 	offenses.” 	ECF 	No. 	5 	at 	Ex. 	A.
Given 	the 	non-exclusivity 	disclaimer 	and 	language 	that 	mirrors
Younker, 	the 	policies 	Plaintiff 	bases 	his 	claim 	upon 	do 	not 	meet
the 	“very 	definite” 	standard 	required 	for 	an 	implied 	contract 	to
be created. Therefore, this Court GRANTS Defendant’s Motion as to
Count V.
E. Defendant’s Motion is DENIED as to Promissory Estoppel [Count
VII] 	because 	Plaintiff 	has 	properly 	pled 	detrimental
reliance.
Plaintiff’s 	Promissory 	Estoppel 	claim 	survives 	Defendant’s
Motion because Plaintiff has properly pled detrimental reliance on
an 	employer’s 	promise 	under 	West 	Virginia’s 	sparse 	law 	in 	this
area. 	Employers 	may, 	in 	some 	circumstances, 	be 	bound 	by 	promises
they 	make 	to 	their 	employees. 	See 	Cook, 	342 	S.E.2d 	453. 	To
establish 	a 	permanent 	employment 	contract 	or 	other 	substantial
employment rights, Plaintiff must show either an “express promise
by 	the 	employer 	or 	by 	implication 	from 	the 	employer’s 	personnel
manual, 	policies 	or 	custom 	and 	practice.” 	Tiernan 	v. 	Charleston
Area Med. Ctr., Inc., 575 S.E.2d 618, 624 (W.Va. 2002) (per curiam)
(citation omitted). Here, Plaintiff must establish HREA (1) “made
an 	express 	promise 	[or 	implied 	promise 	from 	employee 	policy 	or
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procedure], 	(2) 	“that 	[HREA] 	intended 	or 	reasonably 	should 	have
expected that such a promise would be relied and/or acted upon” by
Plaintiff, 	and 	(3) 	that 	Plaintiff, 	“being 	without 	fault 	of
[himself], 	reasonably 	relied 	on 	that 	promise,” 	leading 	to 	his
discharge, and (4) “in discharging [Plaintiff, HREA] breached that
promise.” Id. at 625.
Two 	West 	Virginia 	cases 	address 	similar 	situations 	to
Plaintiff’s. 	In 	Tiernan, 	a 	Plaintiff 	prevailed 	on 	her 	promissory
estoppel 	claim 	against 	her 	employer 	because 	she 	was 	verbally
promised she “had every right to speak to newspaper reporters” and
she 	“would 	not 	[be 	retaliated 	against] 	if 	[she] 	chose 	to 	speak
up,” 	but 	was 	fired 	after 	relying 	on 	such 	promise. 	Tiernan, 	575
S.E.2d at 624. The Supreme Court of Appeals for West Virginia found
this promise established a substantial employment right not to be
fired for speaking to reporters. Id. at 625.
In Hatfield v. Mgmt. Assocs. Of W. Va., a Plaintiff could not
prevail 	on 	her 	promissory 	estoppel 	claim 	when 	she 	asserted 	her
employer 	breached 	its 	promise 	by 	firing 	her 	four 	days 	into
employment. 	672 	S.E.2d 	395, 	401-02 	(W.Va. 	2008). 	She 	based 	this
claim on the employment offer she signed, which had no promise of
permanent 	employment. 	Id. 	Furthermore, 	she 	acknowledged 	she 	knew
she was an at-will employee. Id. Although she detrimentally relied
on 	the 	employment 	offer, 	she 	could 	not 	prevail 	because 	she 	knew
she was an at-will employee, making the reliance unreasonable. Id.
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Notably, Tiernan relates to the breach of a specific promise
by an employer, while Hatfield relates to the alleged breach of an
offer 	of 	employment 	that 	clearly 	was 	at-will. 	In 	this 	case,
Plaintiff’s situation is more closely aligned with Tiernan, as it
relates to specific promises by an employer, rather than an overall
employment 	offer. 	Following 	Tiernan, 	Plaintiff’s 	status 	as 	a
presumed at-will employee is not relevant to this claim.
Plaintiff alleges Defendant promised Plaintiff would (1) “be
subject 	to 	termination 	for 	legitimate, 	non-retaliatory 	reasons,”
(2) 	“receive 	procedural 	protections 	including 	board 	approval 	for
position 	elimination,” 	(3) 	“be 	protected 	from 	retaliation 	for
reporting 	fraud, 	waste, 	abuse, 	and 	unlawful 	activity,” 	and 	(4)
“receive sick leave and compensation benefits as provided in HREA
policies,” 	through 	employment 	policies, 	established 	procedures,
compensation polices, and whistleblower protections. ECF No. 1 at
¶ 75.
Given 	Plaintiff 	alleged 	these 	promises 	appear 	in 	more 	than
just 	HREA 	policies 	and 	Tiernan 	allowed 	a 	Plaintiff 	to 	succeed 	on
specific 	promises 	separate 	from 	the 	at-will 	employment
distinction, it would be premature to find Plaintiff is completely
unable 	to 	be 	afforded 	relief 	on 	this 	claim. 	Plaintiff 	alleged
promises 	implied 	through 	employment 	policies 	and 	procedures 	and
that 	Defendant 	expected 	reliance 	on 	these 	procedures 	by
“continuing 	[Plaintiff’s] 	employment, 	performing 	his 	duties, 	and
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reporting 	misconduct 	internally 	rather 	than 	to 	external
authorities.” 	ECF 	No. 	1 	at 	¶¶ 	75-76. 	Additionally, 	Plaintiff
alleges 	he 	reasonably 	and 	foreseeably 	relied 	on 	Defendant’s
promises 	by 	“remaining 	employed 	with 	HREA 	for 	nearly 	five 	years;
declining 	or 	foregoing 	other 	employment 	opportunities; 	reporting
fraud, 	misuse 	of 	federal 	funds, 	and 	illegal 	surveillance 	through
internal channels; and continuing to perform his duties in reliance
on promised protections and procedures.” Id. at ¶ 77. Furthermore,
Plaintiff 	alleges 	a 	breach 	of 	these 	promises 	by 	Defendant 	when
Plaintiff 	was 	terminated 	without 	board 	approval 	and 	terminated
under allegedly false pretenses. Id. at ¶ 79.
Looking 	to 	the 	Whistleblower 	Policy, 	which 	Defendant 	has
provided, 	Plaintiff 	was 	promised 	“[t]his 	policy 	is 	intended 	to
encourage 	and 	enable 	employees 	to 	raise 	Concerns 	for 	prompt
internal investigation and appropriate action. No employee who in
good 	faith 	reports 	a 	Concern 	shall 	be 	subject 	to 	retaliation 	in
any form for making a report.” ECF No. 5 at Ex. C. This promise is
comparable to the one upheld in Tiernan.
Defendant 	contends 	the 	promissory 	estoppel 	claim 	is 	also
subject 	to 	the 	Younker 	standard 	which 	requires 	a 	“very 	definite”
promise, citing cases from the Southern District of West Virginia
which 	apply 	that 	standard 	to 	promissory 	estoppel 	claims. 	ECF 	No.
6 at p. 18-19; Younker, 591 S.E.2d at 257. However, the only West
Virginia 	promissory 	estoppel 	case 	in 	this 	area 	of 	law 	following
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the 	Younker 	decision 	did 	not 	apply 	the 	Younker 	rules, 	as 	implied
contract and promissory estoppel are two distinct legal doctrines.
See 	Hatfield, 	672 	S.E.2d 	395. 	Although 	Younker 	does 	address
promissory estoppel in a footnote, the denial of Plaintiff’s claim
relates 	to 	the 	fact 	he 	did 	not 	plead 	reliance 	on 	Defendant’s
employment policies, not the definiteness of the promise. Younker,
591 	S.E.2d 	254, 	n. 	8. 	This 	Court 	does 	not 	apply 	the 	Younker
standard 	to 	Plaintiff’s 	promissory 	estoppel 	claim 	because 	West
Virginia law does not suggest it applies here.
When the Younker standard does not apply, it is inapplicable
whether the whistleblower policy constitutes “aspirational goals,”
as 	Defendant 	suggests. 	ECF 	No. 	6 	at 	p. 	19-20. 	Furthermore, 	this
Court allows Plaintiff to move forward with discovery on this claim
given proper pleading of all the elements. Thus, Defendant’s Motion
is DENIED as to Count VII.
F. Defendant’s 	Motion 	is 	GRANTED 	in 	part 	and 	DENIED 	in 	part 	as
to 	Plaintiff’s 	claims 	under 	the 	West 	Virginia 	Wage 	Payment
and Collection Act (“WV WPCA”).
Plaintiff’s 	claim 	for 	sick 	leave 	reimbursement 	is 	dismissed
because 	HREA 	board 	policy 	clearly 	does 	not 	provide 	for
reimbursement, 	but 	his 	claim 	for 	work-related 	mobile 	phone 	use
reimbursement 	survives. 	Under 	the 	WV 	WPCA, 	the 	term 	“wages” 	is
defined 	as 	“[c]ompensation 	for 	labor 	or 	services 	rendered 	by 	an
employee, whether the amount is determined in a time, task, piece,
commission or other basis of calculation. . .. [T]he term “wages”
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shall 	also 	include 	then 	accrued 	fringe 	benefits 	capable 	of
calculation 	and 	payable 	directly 	to 	an 	employee.” 	W. 	Va. 	Code 	§
21-5-1(c). 	“Fringe 	benefits” 	is 	defined 	as 	“any 	benefit 	provided
an 	employee 	or 	group 	of 	employees 	by 	an 	employer, 	or 	which 	is
required by law....” W. Va. Code § 21-5-1(l).
Whether 	reimbursement 	for 	work-related 	mobile 	phone 	use 	and
sick leave pay are considered “fringe benefits” included in “wages”
under 	the 	WV 	WPCA 	is 	determined 	by 	the 	terms 	of 	employment, 	not
the 	WPCA. Wolfe 	v. 	Adkins, 	725 	S.E.2d 	200, 	204 	(W.Va. 	2011). 	See
also Meadows v. Wal-Mart Stores, Inc., 530 S.E.2d 676, 689 (W.Va.
1999) 	(“Accordingly, 	the 	terms 	of 	the 	applicable 	employment
policy, 	and 	not 	the 	WPCA, 	determine 	whether 	fringe 	benefits 	are
included 	in 	the 	term 	‘wages’ 	under 	W. 	Va. 	Code. 	§ 	21-5-1(c).”)
“Terms of employment” includes a written employment agreement, but
also 	includes 	“the 	employer’s 	personnel 	handbook 	or 	manual,
personnel policy materials, memoranda and documents intended to be
used by employers in establishing the benefits of their employees.”
Wolfe, 725 S.E.2d at 205 (citing Younker, 591 S.E.2d at 254).
a. Sick leave
West Virginia law is clear “where there is no provision in a
written employment agreement, personnel handbook, personnel policy
materials 	or 	employer 	documents 	granting 	employees 	payment 	for
unused, 	accumulated 	sick 	leave 	upon 	termination 	from 	employment,
the 	unused 	accumulated 	sick 	leave, 	upon 	termination 	from
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employment 	is 	not 	a 	vested, 	nonforfeitable 	fringe 	benefit 	. 	. 	.
and is not payable to the employees.” Wolfe, 725 S.E.2d at 207.
Plaintiff specifically relies on HREA’s sick leave policy in
the Complaint. ECF No. 1 at ¶ 71. Defendant provides the sick leave
policy, which lacks any provision granting employees accrued sick
leave 	at 	termination, 	defeating 	Plaintiff’s 	claim 	he 	is 	entitled
to sick leave reimbursement under the WV WPCA. ECF No. 5 at Ex. D.
Plaintiff alleges because another employee was paid sick leave and
he 	was 	not, 	he 	is 	entitled 	to 	sick 	leave, 	despite 	there 	being 	no
such 	provision 	in 	the 	policy. 	ECF 	No. 	11 	at 	p. 	17-18. 	Plaintiff
cites no case law that overcomes the Wolfe rule. Thus, Defendant’s
Motion is GRANTED as to Plaintiff’s request for sick leave.
b. Mobile phone use
Plaintiff further alleges he is entitled to payment for work-
related 	mobile 	phone 	use. 	ECF 	No. 	1 	at 	¶ 	70. 	Plaintiff 	expressly
relies on Board Policy 209 in the Complaint. Id. Defendant asserts
the 	policy, 	which 	he 	attaches 	to 	his 	Motion, 	is 	“outdated” 	and
does not refer to mobile phone use. ECF No. 6 at p. 21.
Whether 	the 	policy 	is 	truly 	“outdated” 	is 	not 	a 	distinction
this 	Court 	can 	make 	on 	a 	motion 	to 	dismiss 	because 	this 	is 	a
subjective 	distinction, 	not 	supported 	by 	additional 	facts. 	The
policy 	is 	labeled 	“Payment 	of 	Employee 	Phone 	Bills” 	and 	its
objective 	is 	“to 	establish 	a 	procedure 	for 	payment 	of 	on-call
employees 	phone 	bills.” 	ECF 	No. 	5 	at 	Ex. 	E. 	Although 	the 	policy
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does not explicitly state “all managers would be compensated,” as
Plaintiff 	alleges, 	it 	does 	state 	“the 	Cooperative 	will 	pay 	the
basic phone service for the following employees: (1) all non-union
management employees, (2) all on-call union employees as specified
in the union contract.” ECF No. 1 at ¶ 70; ECF No. 5 at Ex. E.
Plaintiff 	has 	sufficiently 	alleged 	he 	“used 	his 	personal
mobile 	phone 	for 	work-related 	purposes” 	and 	is 	entitled 	to
reimbursement 	for 	his 	mobile 	phone 	use 	based 	on 	the 	terms 	of 	his
employment for the purposes of this motion. ECF No. 1 at ¶ 70. See
also McDougal v. G&S Tobacco Dealers, LLC, No. 1:08CV173, 2009 WL
10675160, at *2 (N.D.W.Va. Mar. 26, 2009) (Keeley, J.) (finding a
Plaintiff had sufficiently pled a claim under WV WCPA on a motion
to 	dismiss 	when 	he 	pled 	“the 	reimbursement 	of 	mileage 	and 	other
expenses is compensation due him because of his job requirements”).
Thus, 	Defendant’s 	Motion 	is 	DENIED 	as 	to 	Plaintiff’s 	claim 	for
work-related mobile phone use under the WV WCPA.
G. Counts II and III of Plaintiff’s Complaint are dismissed with
leave 	to 	amend 	and 	Counts 	IV 	and 	V 	and 	part 	of 	Count 	VI 	are
dismissed with prejudice.
Counts II and III are dismissed with leave to amend and Counts
IV, 	V, 	and 	part 	of 	Count 	VI 	are 	dismissed 	with 	prejudice 	because
amendment would be futile. “The law is well settled ‘that leave to
amend a pleading should be denied only when the amendment would be
prejudicial to the opposing party, there has been bad faith on the
part 	of 	the 	moving 	party, 	or 	the 	amendment 	would 	be 	futile.’”
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Aljizzani 	v. 	Middle 	E. 	Broad. 	Networks, 	Inc., 	178 	F.4th 	863, 	871
(4th Cir. 2026) (citation omitted).
Here, 	there 	are 	“fundamental 	deficiencies 	in 	[P]laintiff’s
theory 	of 	liability” 	for 	Counts 	IV, 	V 	and 	part 	of 	Count 	VI 	and
amendment would be futile. Cozzarelli v. Inspire Pharms. Inc., 549
F.3d 	618, 	630 	(4th 	Cir. 	2008). 	For 	Count 	IV, 	the 	ECPA 	does 	not
expressly 	provide 	for 	a 	public 	policy 	consideration, 	making 	a
Harless 	claim 	under 	it 	futile. 	See 	18 	U.S.C. 	§ 	2511; 	Blanda, 	836
S.E.2d 	at 	527. 	Regarding 	Count 	V 	and 	Plaintiff’s 	claim 	for 	sick
leave 	in 	Count 	VI, 	Defendant 	has 	provided 	the 	HREA 	policies
Plaintiff 	relies 	upon, 	which 	clearly 	do 	not 	support 	the
propositions 	Plaintiff 	asserts 	as 	a 	matter 	of 	law. 	See 	ECF 	No. 	1
at ¶¶ 62-70; ECF No. 5 Ex. A-E. Plaintiff merely contests dismissal
with 	prejudice 	and 	states 	his 	claims 	could 	be 	substantiated 	by
discovery, 	without 	identifying 	how 	these 	pleading 	deficiencies
could be remedied. ECF No. 11 at p. 20.
For 	Counts 	II 	and 	III, 	however, 	amendment 	would 	not 	be
prejudicial to Defendants, there does not appear to be bad faith,
and 	amendment 	is 	not 	entirely 	futile. 	Count 	II 	fails 	to 	assert 	a
false 	claim 	for 	payment 	to 	the 	government. 	It 	is 	not 	certain
Plaintiff would be unable to remedy this deficiency. Similarly, in
Count III, Plaintiff fails to specify substantial public policy in
one 	portion 	of 	the 	claim, 	merely 	citing 	a 	spectrum 	of 	federal
statutes 	and 	common 	law 	principles. 	ECF 	No. 	1 	at 	¶ 	54. 	Plaintiff
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could 	remedy 	this 	claim 	by 	being 	more 	specific 	about 	the 	public
policy 	he 	aims 	to 	base 	these 	claims 	on. 	Thus, 	dismissal 	with
prejudice is not warranted.
V. 	CONCLUSION
For 	the 	reasons 	discussed, 	this 	Court 	GRANTS 	in 	part 	and
DENIES 	in 	part 	Defendant’s 	Motion 	[ECF 	No. 	5] 	pursuant 	to 	Rule
12(b)(6) of the Federal Rules of Civil Procedure, DISMISSING Counts
II and III with leave to amend and DISMISSING WITH PREJUDICE Counts
IV 	and 	V 	and 	part 	of 	Count 	VI, 	relating 	to 	Plaintiff’s 	claim 	for
reimbursement of sick leave.
Thus, the surviving Counts are Count I, Count VII, and Count
VI as to Plaintiff’s claim for reimbursement on work-related mobile
phone use under the WV WCPA.
It is so ORDERED
The 	Clerk 	shall 	transmit 	copies 	of 	this 	Order 	to 	counsel 	of
record by electronic means.
DATED: September 30, 2026
____________________________
THOMAS S. KLEEH, CHIEF JUDGE
NORTHERN DISTRICT OF WEST VIRGINIA
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