In United States ex rel. Sorenson v. Wadsworth Bros. Construction Co., the U.S. Court of Appeals for the Tenth Circuit upheld the dismissal of a False Claims Act (FCA) lawsuit involving alleged Davis-Bacon Act violations. The court ruled that the complaint lacked specific factual allegations necessary to show that the purported underpayments were material to government payment decisions.
Kelly Sorenson, a former truck driver for Wadsworth, filed the qui tam lawsuit, alleging that the company misclassified workers on federally funded construction projects and submitted certified payroll reports falsely claiming compliance with the Davis-Bacon Act. Sorenson claimed Wadsworth altered time records to make it appear he was working off-site, thereby avoiding required prevailing wage rates.
The complaint further alleged that some pay was mischaracterized as union benefits and directed into a profit-sharing account, rather than paid out properly. Sorenson claimed these practices affected not only his own wages but also those of unnamed other employees.
The Tenth Circuit agreed with the district court that the allegations failed to meet the FCA's "demanding" materiality requirement. Under the Supreme Court’s decision in Universal Health Services v. United States ex rel. Escobar, a misrepresentation must be material to the government’s payment decision to be actionable under the FCA.
Sorenson’s complaint, the court concluded, only asserted that Davis-Bacon compliance was a condition of payment. It lacked additional facts showing that the government would have refused payment had it known of the alleged violations. The complaint did not detail the scope of underpayments, the nature of the tasks performed, or the specific jobsite locations. The court noted these omissions made it impossible to assess whether the violations were substantial or minor.
Additionally, the court found the complaint’s references to misclassification were too general and did not adequately describe how Wadsworth’s conduct differed from administrative interpretations of Davis-Bacon jobsite coverage. Without identifying what labor was performed on covered sites or how the classification was inaccurate, the allegations remained speculative.
The court also affirmed summary judgment against Sorenson’s claim of retaliation under the FCA. Sorenson had argued he was laid off in response to raising concerns about his pay. However, the court held that there was no evidence Wadsworth knew Sorenson’s concerns related to the FCA, as required by statute. While Sorenson discussed Davis-Bacon wages with supervisors, the court found he did not convey a connection between those concerns and potential FCA violations.
Because Sorenson failed to meet the notice standard and did not provide sufficient evidence that Wadsworth’s conduct was retaliatory under the statute, the court upheld dismissal of that claim as well.
Our attorneys at Whitcomb, Selinsky, PC help clients understand Davis-Bacon Act rules and offer assistance with issues involving prevailing wages on federally funded projects.