Geary v. Parexel International Corporation

Background

William John Geary, who was representing himself, filed a second amended complaint asserting one remaining claim: retaliation under the Dodd-Frank Wall Street Reform and Consumer Protection Act. The court’s earlier order had dismissed other claims and dismissed the Dodd-Frank claim against individual defendants, leaving the claim against Parexel International Corporation.

Geary alleged that he worked for Parexel as a Senior Project Manager in 2014 and calculated and reported recognized revenue. He alleged that he reported wire-fraud and investor-fraud concerns to Parexel’s corporate hierarchy on April 8, 2015, and reported his observations to the Securities and Exchange Commission in May 2015. Parexel terminated his employment on June 30, 2015. Geary alleged that his reports and refusal to participate in wrongdoing contributed to or caused his termination.

Motion to Dismiss

Parexel moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not state a legally sufficient claim. The Dodd-Frank Act defines a whistleblower as an individual who provides information about a securities-law violation to the Securities and Exchange Commission in a manner established by the Commission’s rules. The opinion states that the recognized methods include submitting information through the Commission’s website or mailing or faxing a specified form to its Office of the Whistleblower.

The second amended complaint alleged only that Geary reported his observations to the Securities and Exchange Commission in May 2015. It did not state which reporting method he used. Geary’s opposition brief said that he used the Commission’s online reporting tool, but the court evaluated the sufficiency of the complaint itself. Because the complaint did not include this detail, the court granted Parexel’s motion to dismiss the second amended complaint.

Leave to Amend

The court gave Geary one final opportunity to amend. It reasoned that Geary asserted he had submitted an online whistleblower complaint and that the deficiency might therefore be cured by additional allegations. The court rejected Parexel’s request to dismiss the action with prejudice at this stage. The order allowed amendment by April 3, 2023, and stated that Geary could not add new claims or parties without court permission or the parties’ stipulation.

Request for Judicial Notice

Parexel also asked the court to consider a Securities and Exchange Commission response to a records request. According to Parexel, the response stated that the agency had not located a whistleblower complaint against Parexel submitted by Geary. The court denied the request. It concluded that the second amended complaint did not refer to the response or incorporate its contents, and that using the response to challenge the truth of Geary’s allegations would be improper at the motion-to-dismiss stage. The court also stated that, even if it considered the response, it would not completely rule out the possibility that the complaint was submitted under a different name variation or was missed because of a search or recordkeeping error.

Disposition

The court granted Parexel’s motion to dismiss and denied Parexel’s request for judicial notice of the Securities and Exchange Commission’s response. The court granted limited leave to amend. It warned that failure to timely amend or comply with the order would result in dismissal with prejudice under Federal Rule of Civil Procedure 41(b).