Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Waag v. Sotera Defense Solutions, Inc.

United States Court of Appeals, Fourth Circuit

May 16, 2017

GARY WAAG, Plaintiff - Appellant,

          Argued: December 7, 2016

         Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria. T. S. Ellis, III, Senior District Judge. (1:14-cv-01715-TSE-JFA)


          Andrew Steven Cabana, LAW OFFICE OF ANDREW CABANA, PC, Alexandria, Virginia, for Appellant.

          Devin James Stone, BARNES & THORNBURG LLP, Washington, D.C., for Appellee.

         ON BRIEF:

          Teresa Lynn Jakubowski, Washington, D.C., John F. Meyers, BARNES & THORNBURG LLP, Atlanta, Georgia, for Appellee.

          Before NIEMEYER, TRAXLER, and HARRIS, Circuit Judges.

          TRAXLER, Circuit Judge

         Gary Waag brought an action alleging that his former employer, Sotera Defense Solutions, Inc., violated the Family and Medical Leave Act ("FMLA"), 29 U.S.C. § 2601 et seq., by not restoring Waag to his position when he returned from two-months-plus of medical leave; by placing him in a new job that was not equivalent to the one he held before he went on leave; and by terminating Waag from the new job because he took medical leave. The district court granted summary judgment to Sotera, and Waag appeals. We affirm.



         Before his employment with Sotera, Waag worked for Potomac Fusion, Inc., reporting directly to Dan Haug. At Potomac Fusion, Waag was "Senior Director of Operations, National Intelligence Programs." J.A. 227. Waag's primary duties at Potomac Fusion included "provid[ing] budgetary guidance" and oversight for national security programs, J.A. 74; developing standardized "program controls, " J.A. 75; and "support[ing] business development efforts to . . . grow the footprint of the firm, " J.A. 77, particularly in the area of modeling and simulation.

         In December 2011, Sotera, a defense contractor that provides technology products and services to federal agencies, acquired Potomac Fusion, which became Sotera's Data Fusion Analytics ("DFA") division. Sotera installed Haug as Vice President for the DFA division, and Waag maintained the "Director of Operations" title he had held at Potomac Fusion for Sotera's DFA division. At the time of the acquisition, "key Potomac Fusion employees" were identified and offered "retention bonus agreements." J.A. 215. Despite his Senior Director title, Waag "was not deemed critical to the strategic growth of the company, " id., and therefore was not identified as a key employee. Id. Waag's duties at Sotera included oversight of issues related to "recruiting, security, IT, and facilities." J.A. 79. Waag was also involved in the development of new business at Sotera after the acquisition.

         In September 2012, the United States Army selected Sotera as one of the nonexclusive prime contractors for the Software and Systems Engineering Services Next Generation program ("SSES NexGen" or "NexGen" program) to provide warfighting software solutions and support to the Army at the Aberdeen Proving Ground in Maryland. NexGen was an IDIQ contract-an "indefinite delivery/indefinite quantity" contract. J.A. 668. A prime contractor has the right to bid on "Requests for Proposals" ("RFPs") or "task orders" issued by a federal department or agency under an IDIQ contract like NexGen. Sotera was qualified to bid on RFPs in the area of software and analytics. With a budgetary ceiling of $7 billion, the NexGen program was potentially very lucrative for contractors who were awarded work, but Sotera still had to out-bid other prime contractors to win a project under NexGen. Thus, the NexGen program was worth nothing to Sotera until it outbid other prime contractors for NexGen work.

         In early October 2012, Haug and Vice President Kathleen Lossau asked Waag to become the Program Manager ("PM") of Sotera's NexGen work in light of Waag's experience managing IDIQ contracts. The PM position for an IDIQ contract is largely "a marketing business development role, " J.A. 101-02, particularly in the early stages. Thus, Waag's salary was not directly billable to the government-it was paid out of Sotera's overhead costs. During Waag's brief tenure as PM, Sotera did not have any work related to NexGen task orders, and Waag had no staff or employees reporting to him on NexGen projects.

         On October 17, 2012, Waag severely injured his hand when he fell off the roof of his house. Waag was hospitalized for several days and then underwent two or three days of physical therapy per week. Waag's physician anticipated he would not return to work until December 31, 2012. Waag informed Haug about his injury on the day it happened and explained that he would not be able to work for an extended period of time due to the severity of the injury. During his absence from work, Waag was able to cover a portion of his salary by using Sotera's "paid time off" and short-term disability benefits. J.A. 121.

         According to Waag, Sotera never notified him of his rights to take leave under FMLA. Sotera, however, gave its employees a handbook containing its leave policies, and this information was also accessible online. Sotera's leave policy provides up to 12 weeks of unpaid family and medical leave and states that, "with limited exceptions, an employee who takes leave under this policy will be able to return to the same job or a job with equivalent status, pay, benefits and other employment terms." J.A. 170.[1] When Waag began his employment, he received a Kindle device onto which Sotera's leave and other human resources policies were loaded.

         While he was on leave, Waag communicated with Sotera Vice-President Lossau about NexGen. In late October 2012, Waag indicated he was "severely limited in [his] ability to step out into the SSES NEXGEN [Project Manager] role." J.A. 256. After speaking with Waag and learning he would be out of work until mid-December or early January 2013, Lossau told Haug, "I need a new PM for SSES nexgen, " and asked for Haug's input. J.A. 879. Shortly thereafter, Haug and Lossau decided to place Devin Edwards, who was Director of Mission Analytics and Collection, in charge of NexGen IDIQ work. Haug told Edwards there was "nothing to do" at the time Edwards took over because there were no pending task orders.

         In early November, Waag and Lossau corresponded via e-mail regarding the NexGen PM position. Lossau explained that "Devin has agreed to be the SSES NexGen PM and will get things started for us" and asked Waag to "pass on any info [he had] to Devin." J.A. 240. Waag asked what his role in NexGen would be after he returned to work, noting that Lossau's e-mail "reads like Devin will be your full-time permanent SSES NEXGEN PM and not just a stop-gap measure until I am able to return." J.A. 239. Lossau responded that Waag should not "worry about [his] position" and that "[f]or the purposes of getting the team up and going with SSES NexGen we have to provide some stability [and] Devin is that stability for now." Id. Lossau encouraged Waag that "[a]ll will work out, " and that "we will evaluate as we ease you back into full time work when you are ready . . . [T]ogether we [will] figure out what roles work best for all involved." Id. But, she also told Waag that he had "been in the business long enough to know that no position is permanent." Id.

         Shortly after Waag began his medical leave, federal budget sequestration went into effect, resulting in substantial cuts to federal spending. The effect of sequestration on defense contractors was significant since funding was not readily available for government contracts. One of the many programs delayed was NexGen. Lossau and Edwards attended the government's "kickoff meeting" for the NexGen contractors at which the contractors learned that "there was no funding available for the contracts." J.A. 251. In 2012 and 2013, there were no NexGen RFPs for which Sotera could submit a bid. During this period, the NexGen PM position was not a full-time job; Edwards estimated that he spent only ten to twenty percent of his time on his NexGen duties.

         In late December 2012, Haug told Waag that when he returned to work, Waag would be reporting to a different supervisor, Jim Gerard, to help grow Sotera's new Electronic Warfare Program ("EWP") which involved modeling and simulation work. Unlike the NexGen program, which had no RFPs to bid on, the EWP unit was competing for a specific contract. Gerard was tasked with winning an EWP Management Trainer ("EWPMT") contract-"a 70 or 80 million dollar single award contract." J.A. 96. Because of Waag's experience in modeling and simulation, he was assigned to work on the EWPMT proposal, which was "a very complex pricing job." J.A. 141. Waag spent the majority of his time in January 2013 working on the EWPMT proposal, which was submitted in February 2013. The salary for Waag's new position was identical to the salary for the NexGen PM position he held before taking medical leave, and, as before, Waag's salary was overhead as he was not performing billable work in the EWP. According to Lossau, Waag's new job "was an equivalent position" to the NexGen PM job and provided Waag "concrete work to perform." J.A. 252.

         In late 2012, "Sotera and [its] DFA Business Unit saw a drastic decrease in work due to sequestration, " J.A. 217, and Sotera missed its 2012 budget revenue goal "by $110 million, " J.A. 219. In February 2013, Haug "was informed by senior management that [he] needed to cut [his division's] overhead cost by $2.3 million and that the only way to do that [was] to lay off employees." J.A. 219. Haug's DFA "business unit was especially under pressure because it had the highest indirect costs and was woefully underperforming on the revenue side." Id. In choosing which employees in his unit to lay off, Haug focused on employees who were not performing work directly billable to the government and "who were assigned to the less important strategic priorities." Id. Haug determined that the EWP and modeling and simulation groups were doing lower priority work than several other groups in the DFA division. Thus, Waag, an overhead employee not doing high priority work, was included in the initial group of employees laid off in February 2013. During 2013, fourteen senior managers were either laid off or resigned and were not replaced, and Waag's boss Gerard, a vice president, was laid off after Sotera failed to win the EWPMT contract. But Edwards, Waag's replacement for NexGen PM, was not among those laid off. Even though Sotera had no NexGen IDIQ work, Edwards was retained because he "was critical to a number of other significant revenue programs" ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.