Four former employees are allowed to sue a Colorado Springs-based defense contractor for terminating their employment in violation of federal whistleblower protections, the U.S. Court of Appeals for the 10th Circuit ruled on Friday.

“Thus, the district court erred in concluding that  … whistleblowing activity was not protected,” wrote Judge Nancy L. Moritz for the three-member panel.

Victor Cejka, James Walker, Steven Wascher and Jamie Lytle were employees with Vectrus, a supply chain and logistics company, working as security investigators at Bagram Air Force Base in Afghanistan. They each had a one-year contract.

While at Bagram, they noticed a group of other employees committing malfeasance. They later alleged that there was alteration or deletion of information from a government biometric database, sale of classified information, involvement with alcohol and prostitutes on the base. They also stated that the employees would transfer or fire those “who would not cooperate with their illegal activities.”

The military subsequently raided the base and removed eight employees in November 2013.

However, the following month, Vectrus transferred Walker and Wascher to other bases and terminated Cejka and Lytle. Then, Vectrus told Walker and Wascher they would have to accept a clerk position or be laid off (they chose the latter).

The four plaintiffs sued under § 2409 of the U.S. Code, which prohibits contractors from being ”discharged, demoted, or otherwise discriminated against as a reprisal” for disclosing gross mismanagement or safety risks.

A U.S. District Court judge dismissed three of the claims after Vectrus argued that Congress did not enact the whistleblower protections for subcontractors until 2013, and their contract did not reflect the change until mid-2014 after the terminations. The federal claim for Walker and four wrongful discharge claims under Colorado law went to a jury trial. Vectrus argued that wrongful discharge only applies to at-will employees, and that Walker and Wascher were laid off rather than fired.

Raymond Martin, an attorney for the plaintiffs, argued that all four had “a life of achievement and success in the military, a life of achievement and success in their private employment….Was it just a coincidence that they all just became bad people and were fired?”

A jury found in all cases that Vectrus knew about the plaintiffs’ whistleblowing activity and got rid of them because of it.

On appeal, the 10th Circuit panel reversed the district court’s decision to dismiss the federal whistleblower claims. The judges reasoned that the pre-2013 language still applied to Vectrus because the company held prime contracts with the U.S. Department of Defense.

“We conclude that the plain language of § 2409 applies to plaintiffs. Specifically, as described above, because Vectrus was a ‘contractor,’ plaintiffs were ‘employee[s] of a contractor,’ and they made a complaint ‘related to a [DOD] contract,’’” wrote Moritz.

For the wrongful discharge allegations, Vectrus referenced a 1992 Colorado Supreme Court decision reading, in part, that employees who are “at-will or otherwise” should not have to choose between obeying an order and breaking the law. But while Vectrus was able to cite wrongful discharge cases being permissible for at-will employees, Moritz pointed out that the company had no evidence that other sorts of employees were forbidden from bringing such claims.

“Thus, these cases’ descriptions of wrongful discharge do not limit the scope of who may bring wrongful discharge claims,” she wrote. The panel agreed that there was no limitation on such lawsuits to at-will employees.

Vectrus finally argued that Walker and Wascher did not resign, as the law requires, so they were not entitled to their wrongful discharge claims. The plaintiffs countered that they were subject to “constructive discharge,” meaning a hostile work environment designed to make them resign. The district court’s jury sided with the two employees, finding that their working conditions were “intolerable” and they “had no reasonable choice but to resign” by choosing the layoff.

The district court determined that the concept of resignation was broader, and referred to an involuntary separation from employment. Once again, the 10th Circuit observed that Vectrus cited no cases covering this exact situation.

“Here, Vectrus gave Wascher and Walker the option of accepting a demotion or being laid off, and they chose to be laid off,” Moritz wrote. “And when (1) an employer gives an employee a choice between a demotion and separation of employment and (2) the employee choses [sic] separation of employment, persuasive authority indicates that the employee has resigned within the meaning of Colorado’s constructive-discharge law.”

The panel explained that there was sufficient evidence to show a hostile work environment, including managers who called the two men a “troublemaker” and “traitors,” transferring them to a more dangerous base and refusing their request to return to Bagram even though Vectrus needed volunteers to do so.

Vectrus had asked for a new trial on grounds that the military evidence introduced prejudiced the jury due to “the sensational and salacious details of the allegations and “the external validation that military approval may have bestowed upon plaintiffs.” The 10th Circuit declined to order one.

Steven Hartmann, a partner with Freeborn & Peters LLP who also represented the plaintiffs, said he was proud to advocate for the men, and that through their whistleblowing they “stepped up and did the right thing.”

“They’re not interesting in going back to work for Vectrus,” he added. “We certainly would be happy to receive payment on the judgment. Whether we’re going to pursue a further trial, I just don’t know.

Vectrus did not immediately respond to a request for comment.

The case is Cejka et al. v. Vectrus Systems Corporation.

This story has been updated with additional comment.