Lam-Quang-Vinh v. Springs Window Fashions, LLC

37 F.4th 431

Jennifer R. LAM-Quang-Vinh, Plaintiff-Appellant,

v.SPRINGS WINDOW FASHIONS, LLC, Defendant-Appellee.

No. 21-2665

United States Court of Appeals, Seventh Circuit.

Argued April 27, 2022

Decided June 16, 2022

Jeff Scott Olson, Attorney, Jeff Scott Olson Law Firm, S.C., Madison, WI, for Plaintiff-Appellant.

Amy O. Bruchs, Kurt F. Ellison, Farrah N.W. Rifelj, Attorneys, Michael Best & Friedrich LLP, Madison, WI, for Defendant-Appellee.

Before Sykes, Chief Judge, and Brennan and Scudder, Circuit Judges.

Per Curiam.

Jennifer Lam sued her former employer, Springs Window Fashions, LLC, for retaliating against her in violation of the False Claims Act's whistleblower protection provision. See 31 U.S.C. § 3730(h).¹ She alleged that Springs harassed her and then fired her after she told management that the company owed higher tariffs. The district court granted summary judgment to Springs, concluding that Lam failed to present sufficient evidence of retaliation. We affirm because Springs's conduct falls short of "harassment" under § 3730(h)(1), and Lam has not established a connection between the tariff violations she reported and Springs's decision to fire her.

I

Springs is a Wisconsin-based manufacturer and distributor of window coverings. Jennifer Lam began working at Springs as its senior manager of global trade in January 2019. During her time at the company, Lam encountered two significant problems—one relating to inventory and the other to tariffs.

Lam learned about the inventory problem in March 2019: three of Springs's manufacturing facilities in Mexico were inaccurately tracking import and export inventories because two computer systems were not properly integrated. The company's then-Chief Financial Officer, Chris Nagel, told Lam to create a plan to fix the inventory discrepancy. Nagel left Springs, and, for the next four months, Lam reported directly to Springs's Chief Executive Officer, Eric Jungbluth. Lam told Jungbluth that she aimed to resolve this first problem by June 2020.

During this four-month stretch, Lam discovered the tariff problem. She believed that a product Springs imported—cellular fabric blankets used to make window shades—originated in China and not, as the supplier had insisted, in Taiwan and Malaysia. This detail mattered because fabrics originating in China were subject to a steep 25 percent tariff.

Jungbluth had experience with these tariffs. Lam's predecessor, Jennifer Sharkey, told Springs's management in 2018 that the blankets originated in China—an opinion shared by outside counsel. At first, Sharkey had told Jungbluth that new country-of-origin regulations would not negatively impact the company. But months later, Sharkey realized she had made an error; the regulations would harm Springs financially. Jungbluth then directed Nagel to issue Sharkey a letter of reprimand. The following month, Sharkey resigned, finding her job too stressful because of Jungbluth's animosity toward her.

According to Lam, her stance on the tariffs was also poorly received. She told Jungbluth, in at least three meetings between June and September 2019, that the company would need to pay higher tariffs on the fabrics. He became "frustrated and visibly irritated" when she would not reconsider her conclusion. And because Lam refused to acquiesce to his view, she was "scolded" by Springs's Vice President of Procurement and then-Vice President of Finance in a private meeting in September. Days later, when she reiterated her opinion in a senior leadership meeting, Jungbluth "angrily berated" her and maintained that the company would not pay the tariffs. In late October, the General Counsel told Lam that he had made a "business decision" to classify the imported fabrics as Taiwanese and Malaysian rather than as Chinese. Lam accepted the decision and had no further conversations with anyone at Springs about the tariffs.²

Meanwhile, Lam had started reporting to the company's new Chief Financial Officer, Tim Oliver, in late September 2019. Oliver knew about Lam's disagreement with Jungbluth; two days before the General Counsel's decision, Oliver even told Lam to continue classifying the fabrics as Taiwanese and Malaysian. But Oliver wanted Lam to focus on the inventory problem to avoid fines from the Mexican government. Based on the timeline Lam had previously provided, Oliver believed that the problem could be fixed in 9 to 12 months. Then, after Lam proposed a five-year plan for a separate project at a November meeting, Oliver responded that she would "not be here in five years." Lam says she did not know what Oliver meant and she did not ask him.

In December 2019, executives at Springs were directed to review their staff and to determine if anyone should be placed on a performance improvement plan. Although Oliver had not told Lam he was dissatisfied with her work, he put her on such an improvement plan. Oliver identified four areas in which Lam was not meeting expectations: (1) her failure to adequately address the inventory problem, causing the problem to "grow"; (2) her failure to supplement tariff concerns with a "risk assessment," a "solution," or a "process change," while still "assuring appropriate compliance"; (3) her reliance on outside consultants; and (4) her inability to communicate concisely. The improvement plan stated that if Lam did not meet expectations after 30, 60, and 90 days, she would be fired. Lam was also required to submit a "clear plan" to address the inventory problem by January 6, 2020.

That day, Lam submitted to Oliver the requested plan to address the inventory problem. But Oliver was dissatisfied because Lam's submission lacked a calendar and budget. Lam later supplemented her submission with more information, such as the cost of retaining an outside consultant, but she did not reference a calendar or budget. Oliver then asked Lam for a more detailed plan that included an end date. She told him, however, that an end date for such a large project was unrealistic.

In early February 2020, after discovering the inventory discrepancy, the Mexican government audited one of Springs's facilities. Lam did not tell Oliver about the audit for two days—a delay that frustrated Oliver. According to Lam, she waited to tell him because she was sick and drowsy from medication on February 5, and she instead told her subordinate that day to tell Oliver about the audit.

On February 17, Oliver fired Lam. Oliver later testified that he could not rely on her to fix the inventory problem—an especially high-priority issue after the audit—given that she still had no plan in place, and that she lacked planning skills, was unfocused, and had a poor communication style. Oliver also attested that Lam's concerns over the tariffs had nothing to do with his decision to fire her and that Jungbluth did not direct him to fire her.

II

Lam sued Springs in April 2020. She alleged that Springs retaliated against her, in violation of the False Claims Act, over her opinion that the company owed the 25 percent tariff on the fabric blankets. See 31 U.S.C. § 3730(h). In her view, Springs retaliated against her in two ways: first, by senior executives berating and scolding her over her stance on the tariffs; and second, by firing her because of that stance. In support of her claim that Springs fired her over the tariffs, she pointed to Jungbluth's punishment of Sharkey after Sharkey expressed that Springs owed the tariffs; Oliver's statement that Lam would not be at Springs in five years; the timing of the measures Springs took against her; and Springs's supposed lack of a legitimate reason for firing her.

The district court granted Springs's motion for summary judgment. The court first ruled that company executives did not retaliate against Lam by reacting angrily to her tariff analysis. Lam had not identified any specific comments made to her by the executives. And, the court reasoned, isolated incidents of mere frustration cannot support a retaliation claim.

The court also concluded that Lam had not shown she was fired for raising the tariff issue to management. The evidence surrounding Sharkey was unhelpful, the court reasoned, because Sharkey had a different supervisor, was not fired, and was not placed on a performance plan. The court also explained that Oliver's statement was vague, lacking in context, and thus not suggestive of retaliatory intent. Nor was there anything suspicious about the timing of the performance improvement plan or Lam's firing, the court concluded, because all executives were asked to determine which staff needed to improve performance, and at that time, Lam had made little progress in fixing the inventory problem. Finally, the court rejected Lam's argument about pretext because Lam presented no evidence that Oliver's stated reasons for placing her on a performance improvement plan or firing her were insincere.

III

Lam now appeals. We review the court's grant of summary judgment de novo, construing all facts in the light most favorable to Lam and drawing all reasonable inferences in her favor. See Anderson v. Nations Lending Corp. , 27 F.4th 1300, 1304 (7th Cir. 2022). We need not draw every conceivable inference in her favor, and inferences supported only by speculation or conjecture cannot defeat summary judgment. See Bishop v. Air Line Pilots Ass'n Int'l , 5 F.4th 684, 693 (7th Cir. 2021).

The governing law in this case is the False Claims Act, 31 U.S.C. §§ 3729 – 3732, which makes it unlawful for any person to defraud the United States Government by making false claims. Its whistleblower provision protects an employee who warns her employer that the employer is making false claims:

Any employee ... shall be entitled to all relief necessary to make that employee ... whole, if that employee ... is 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 ... in furtherance

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