Excerpts from Joanne Wagner's whistleblower lawsuit

Introduction and summary

Plaintiff alleges that defendants Carol Molnau, transportation commissioner, and MnDOT wrongfully terminated plaintiff as MnDOT's Equal Employment Opportunity/Contract Management Director on Oct. 5, 2005, because she reported that the letting of the construction contract for the federally-aided I-494 design/build project failed to comply with federal requirements for participation of disadvantaged business subcontractors.

The DBE Program

Plaintiff's official duties included reviewing construction contracts to ensure that MnDOT and its contractors complied with a federal program known as the Disadvantaged Business Enterprise program.

The DBE program requires state contracting authorities such as MnDOT to set an overall goal for DBE participation in its federally aided construction contracts.

The I-494 Design/Build project

The DBE program goal for the project was set at 14 percent participation by certified DBE subcontractors.

The low bid of $135 million was submitted by Granite/McCrossan.

Initially, G/M proposed to ensure 4.3 percent participation by certified DBE contractors.

MnDOT's EEO staff determined that G/M's good faith efforts to comply with the DBE program were not in compliance with federal law.

As a result, MnDOT's EEO staff recommended that Plaintiff issue a finding that G/M hd failed to meet the DBE requirement.

Plaintiff agreed with the recommendation and shared her findings informally with MnDOT's senior management.

MnDOT's senior management attempted to intimidate Plaintiff into changing her decision by threatening her with unspecified consequences, which Plaintiff understood as threats that Plaintiff's conditions of employment and possibility of promotions would be made more difficult.

Plaintiff refused to change her recommendation.

Plaintiff then set written notice to Molnau, the Federal Highway Administration (FHWA), and to G/M that G/M's good faith efforts to comply with the DBE program on the project was unsatisfactory.

At G/M's request, MnDOT Deputy Commissioner Doug Differt conducted a reconsideration hearing on the DBE compliance issue.

Following the reconsideration hearing, Differt summarily overruled Plaintiff's recommendation, and notified G/M and the FHWA in writing that he was awarding the project to G/M.

Upon learning of Differt's decision, FHWA requested a copy of the record of the reconsideration hearing so that FHWA could review the foundation upon which Differt based his decision, and decide whether or not to concur with Differt's decision.

Over the next several weeks, various meetings occurred within MnDOT about how to deal with FHWA's request for a copy of the record, since the reconsideration hearing had not been tape-recorded or stenographically recorded.

At one point, Plaintiff was asked to help create a "record" of the reconsideration hearing which would support Differt's decision.

Plaintiff understood this to be a suggestion that the "record" should include supplementary materials supportive of Differt's decision, and to possibly mislead FHWA into believing that those supplementary materials had actually been presented at the reconsideration hearing.

This Plaintiff refused to do.

Once again, senior MnDOT management attempted to intimidate Plaintiff by threatening her with unspecified consequences.

Once again, Plaintiff refused to be intimidated.

Based on MnDOT's assurance as to G/M's good faith efforts, concurrence by FHWA was given.

Over the next few weeks, Plaintiff was pressured by MnDOT's senior management to construe many of G/M's DBE participation efforts as falling within the DBE program. Differt accused plaintiff of "putting him and the commissioner in a hole" and making the wrong recommendation on G/M.

Despite such pressure, Plaintiff continued to follow DBE program guidelines.

The EEO was thereafter reorganized by senior MnDOT management.

The reorganization reduced the level of independence that the EEO office had enjoyed, and which is necessary for the EEO office to function effectively.

Termination of Plaintiff

Effective Oct. 5, 2005, Plaintiff was terminated as EEO/Contract Management director and demoted to a position with less staff, less responsibility, and less income.

The reorganization of the EEO office was a pretext to terminate Plaintiff's employment as EEO/Contract Management director.

The purpose and effect of the termination was to penalize Plaintiff for alerting MnDOT and FHWA of possible violation of federal law, namely that letting the contract on the project to G/M without a showing of good faith effort would be in violation of the law, and for refusing to alter Plaintiff's recommendation.

The termination of Plaintiff violated Minnesota statute 181.932, Subd. 1, which prohibits an employer from penalizing an employee for reporting a violation or suspected violation of any federal or state law, or for refusing to obey an employer's order to perform an action in violation of state or federal law.