Leidos's Treatment of Female Whistle-Blower Gets Pentagon Review

(Bloomberg) -- Defense Department attorneys are reviewing possible disciplinary action against Leidos Holdings Inc. after the Pentagon's inspector general backed allegations that the information technology company retaliated against a female subcontractor for complaining of a hostile work environment.

The whistle-blower was dropped from a follow-on subcontract in April 2016 after she filed complaints with the Pentagon and Leidos that a supervisor made “inappropriate sexual and racial comments to her,” according to a heavily redacted inspector general's report.

“We found that” Leidos “had motive to exclude” her, the inspector general said in a January report that has now come to light.

The report deleted the names and titles of the official she complained about and the identity of the subcontractor she worked for. It also redacted who at Leidos dealt with the whistle-blower's allegations that a contract for the Pentagon's Office of Economic Adjustment was being executed in a hostile work environment.

Company's Policy

Leidos “does not comment on ongoing legal cases or investigations,” Jason Kello, a company spokesman, said in an emailed statement. In a policy statement on its website, the Reston, Virginia-based company says “we believe diversity and inclusion create cohesive and collaborative teams” and shape “how we recruit talent.”

Forbes listed Leidos as No. 159 this year on its rankings of the 250 “Best Employers for Diversity.”

Leidos is the No. 16 defense contractor, with $2.8 billion in 2017 defense contract obligations, and the fifth-largest Pentagon IT contractor with $844 million in contract obligations, according to Bloomberg Government data. The company provides the Pentagon and the Department of Homeland Security with scientific, engineering, systems integration, cybersecurity and technical services expertise.

According to the inspector general's report, “Leidos asserted that complainant was not a Leidos employee, but a second-tier subcontractor.” But the inspector general concluded that the company exercised “significant control” over the subcontractor's “work, hours, pay, location and nature of her work, assignments and day-to-day direction.” It also said that Leidos's claim that the whistle-blower “exhibited poor performance throughout her employment lacks supporting evidence.”

Navy Commander Patrick Evans, a Pentagon spokesman, said in an email that “since this matter is still under review,” by the Pentagon's legal counsel, “we will refrain from commenting at this time.”

Recommendation to Mattis

The IG recommended in its Jan. 3 report that Defense Secretary Jim Mattis “consider appropriate action against Leidos,” including ordering the company “to award compensatory damages, including back pay, employee benefits and other terms and conditions of employment” that would have applied had she been hired on the additional contract.

Representative Jackie Speier, a California Democrat who is co-chair of the Congressional Whistleblower Caucus and serves on the House Armed Services Committee, wrote Mattis April 18 asking for an update on what action he planned to take.

“I am deeply concerned over Leidos's actions and am grateful” for the inspector general's “willingness to investigate whistle-blower reprisal.”

--With assistance from Laura Criste and Robert Levinson (Bloomberg Government.)

To contact the reporter on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net.

To contact the editors responsible for this story: Bill Faries at wfaries@bloomberg.net, Larry Liebert

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