The Customer Is Sometimes Right

By Elizabeth Chilcoat

You’re a subcontractor with employees at your customer’s worksite. The customer orders you to remove an employee from the project. In fact, the customer emails you that the employee’s repeated safety complaints are killing them and they want him gone immediately. In the inevitable whistleblower suit, can you be liable if your contract gives the customer the right to have you remove workers?

In a recent case, a plaintiff alleged the Department of Energy and a general contractor had asked his employer (a subcontractor) to remove him from a nuclear remediation project, because he challenged their plans to address nuclear safety issues. Discovery produced an email with the request and the reason in writing. The supervisor sued under the whistleblower protections in the Energy Reorganization Act and, in due course, removed the action to federal court. The Ninth Circuit Court addressed the case only on a motion for summary judgment, but ruled there had to be a trial: the broad contract language giving the customer the right to ask for employees to be reassigned might be contrary to public policy. Tamosaitis v. URS Inc., No. 12-35924 (9th Cir. Nov. 7, 2013). But, what kind of trial? The Court also held that plaintiffs have a constitutional right to a jury trial on ERA whistleblower claims.

Bottom line? A customer’s request can set you up for a lawsuit (with a jury). You need robust customer-management skills.