Jury smacks ManTech with $2.1M in damages for firing whistleblowers

Note: This posting was updated Nov. 24 after receiving an statement from ManTech.

ManTech International will have to pay at least $2.1 million to two former employees who claimed they were fired after filing a False Claims Act lawsuit.

A jury ruled in favor of Kevin and Muge Cody, husband and wife, on Nov. 18 and ordered that the company pay them $800,000 in compensatory damages and $1.35 million in back pay damages. The total amount could go higher after front pay damages are assessed. The couple claims they were fired by the company after they raised False Claims Act allegations that the company knowingly underbid the costs of a contract for maintaining mine resistant vehicles and then billed the government claiming the higher costs were unexpected.

Kevin Cody was a president and general manager for a unit of ManTech’s Technical Services Group. Muge Cody worked within ManTech’s global contingency operations division.

ManTech claimed that they were fired as part of a company layoffs, according to a statement from the Cody’s legal team.

According to a ManTech statement, the allegation that the company did anything fraudulent was "baseless and was dropped by the plaintiffs."

The company plans to appeal the ruling against it over the wrongful termination.

As the contract moved forward, both Kevin and Muge Cody discovered what they claimed were defective pricing. They said the company depressed their fringe rate from 60 percent to 47 percent as part of a price to win strategy. This strategy lowered the fringe costs by more than $12 million and helped the company win the contract, according to the lawsuit.

After award, the company began billing the higher fringe rate as “unplanned increases in the Fridge rates via Variance Rate Revenue charges, which the U.S. Government paid,” according to the lawsuit.

The Cody’s lawsuit alleges that ManTech billed the government an extra $9.2 million from December 2012 to September 2013 so it could recoup its indirect costs.

But these allegations were never brought to trial and were dropped by the Codys, according to ManTech's statement.

When the Cody’s raised these issues, the company retaliated against them, first with demotions and finally by firing them.

Under the False Claims Act, the couple sued for wrongful termination and had a civil trial last week in U.S. District Court in Alexandria, Va. The trial lasted for five days.

They were represented by The Employment Law Group, which specializes in cases involving discrimination and illegal treatment of employees including those facing retaliation for reporting wrongdoing and whistleblowers.

“The jury’s verdict on Friday was a strong endorsement of the protections offered by the False Claims Act to good-faith whistleblowers such as the Codys and a cautionary tale for employers who believe they can get away with retaliation,” said R. Scott Oswald, managing principal at the law firm, in a statement.

Again, I want to note that ManTech says they plan to appeal the verdict. This one might not be over yet.