Whistleblowers take tremendous risks to stand up and file qui tam actions over fraud against the government. The False Claims Act strictly prohibits employer retaliation, and provides employees with strong legal remedies in the event of job discrimination:
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Most whistleblowers take huge risks by stepping forward to report fraud. Those who take on their employers by filing qui tam lawsuits can face retaliatory actions that, while almost universally illegal, still come to impact the lives of whistleblowers and their families today.
Thankfully, the federal law that allows private citizens to pursue federal dollars on behalf of the government also protects the people who choose to do so. The False Claims Act (FCA), enacted in 1863 and strengthened through amendments in 1986 and 2009, now contains some of the most powerful anti-retaliation provisions found in American law.
The False Claims Act’s whistleblower protections are powerful, in part, because they are broad, applying to a wide range of “protected activities” and granting employees who have been harmed the right to “all relief necessary.”
Found at Title 31 §3730, Section H of the US Code, the Act’s retaliation provision outlines two vast classes of “protected activity”:
Employers are prohibited from retaliating against employees, contractors, and agents who engage in activities protected by the False Claims Act. Retaliation, in this context, takes on a sweeping meaning, encompassing discharge, demotion and suspension, along with threats, harassment, and “any other manner” of discrimination.
If and when retaliation occurs, whistleblowers are entitled to file a lawsuit (commonly known as a “Section H” claim) against their employer and demand all necessary relief.
The point of a Section H lawsuit is to make a whistleblower “whole” again, returning them to their position before the retaliation occurred. Thus successful plaintiffs who were fired can be reinstated in their job. Those who were demoted can be returned to their prior position. Those who lost out on wages can secure double the back pay they are owed, along with interest on their lost wages. Many will also be entitled to “special damages,” including compensation for emotional distress and any expenses incurred as a result of blowing the whistle. Moreover, they will be reimbursed for their litigation costs and attorney’s fees.
Court decisions have clarified the concept of “protected activity” over the years, holding that FCA protection also applies to employees who make internal reports of fraudulent activity and including internal measures initiated to correct fraudulent behavior after its occurrence. Beyond employees, the Act’s protections apply equally to contractors and other agents of an employer, as well as employees who testify for a qui tam litigant or assist them in their investigations.
Importantly, there is no requirement for a qui tam lawsuit to actually be filed for whistleblower protections to apply. A wide body of federal court opinions have widened the scope of “protected activity” to encompass lawful actions taken in furtherance of potential qui tam lawsuits, in addition to those lawsuits actually filed. A number of courts have ruled that if, at a minimum, qui tam litigation was a “distinct possibility,” any lawful investigation of suspected fraud would be protected under the law.
Note, however, that litigation need not be a “distinct possibility” in the mind of the person investigating fraud. The False Claims Act protects employees who act “in the spirit” of the law, whether or not they have any idea what the FCA is.
An understanding of the False Claims Act is not required to engage in activities that will be protected by the Act’s anti-retaliation section. Whistleblowers have no obligation to read the Act, or consult with a legal scholar. Any lawful investigation of fraudulent activity against the government is consistent with the law, so long as the actions undertaken could be reasonably considered to fall under the Act’s scope. So long as your actions are taken in an attempt to expose fraud against the government, those actions are likely to be protected.
However, this logic cuts both ways. While the FCA protects all lawful activity that falls under the law’s purview, its generosity ends there. Investigations undertaken to ferret out wrongdoing that could not result in a lawsuit under the FCA is not protected. Tax fraud, for example, is excluded from the False Claims Act. Thus any investigation into violations of the Internal Revenue Code would not constitute protected activity.
In most cases, no.
Whether or not your investigation actually hits on evidence of fraud is irrelevant. All lawful investigations begun under the reasonable belief that fraud may have been committed are protected. The ultimate results of the investigation don’t matter, unless your initial suspicions were unreasonable. An employee who, with the facts and information available to her, makes a reasonable inference that fraud may be happening is usually protected.
In general, your normal employment obligations will not be considered protected activity. To be covered by the FCA’s retaliation provisions, most employees will have to go above and beyond their work duties in their investigation of fraud. So corporate officers tasked to ensure compliance with the provisions of a government contract or relevant agency regulations do not immediately gain protection under the False Claims Act.
Several courts, however, including the US District Court for the District of Columbia, have held that corporate compliance officers gain protection under the Act if they report their suspicions to a supervisor.
A number of other court decisions suggest that whistleblowers with the ability to air their concerns internally should do so before turning to the court system. Federal courts in New York, for example, have ruled that, in the absence of a filed qui tam action, whistleblower protections only attach after the investigating employee has taken some form of affirmative action to correct or reveal the fraud. In the next section, we’ll learn why internal reporting has become an important dimension in FCA retaliation lawsuits.
After demonstrating that her activities were protected by the FCA, a whistleblower will next be required to prove that her employer was aware of the protected activity. In principle, employers cannot retaliate against an employee for doing something the employer knows nothing about. More to the point, however, the employer must know (at least in a legal sense) that the activity was protected by the False Claims Act.
Whistleblowers can, of course, increase their chances of overcoming this hurdle by providing their employer with “explicit notice,” declaring their intent to reveal fraudulent activity through a qui tam lawsuit. As you can imagine, explicit warnings of this sort are rare, so the vast majority of courts also consider forms of “implicit notice” to be sufficient. Mentioning the False Claims Act to a supervisor, gesturing in conversation to the possibility of fraud and vaguely mentioning “illegalities” – these have all been considered valid forms of implicit notice, a notably (and intentionally) imprecise concept, in actual federal retaliation cases.
Most courts ultimately take this question on a case-by-case basis, hoping to answer the following question: would a reasonable jury, based on the facts available to the employer, have reason to believe that the employee was investigating their fraudulent activities and considering a possible qui tam lawsuit?
The final step in every FCA retaliation claim is to prove that the employer’s alleged retaliation was prompted, at least partially, by the employee’s protected activities. In other words, a demonstrable causal connection must exist between the protected activity and the employment discrimination.
It’s usually very difficult to prove causation of this sort directly (through an employer’s admission, for example), so indirect forms of evidence will be allowed.
Timing is one major consideration: the sooner, the better. When a dismissal or demotion comes immediately after the employer learns of protected activity, their personnel decision looks a lot like retaliation. The second major source of indirect evidence is an absence of other explanations. Employees who can show that their employer had no legitimate reason to take action, beyond their investigation into fraud, have a strong argument for retaliation. So do employees who were affected by decisions that appear patently absurd, until one takes protected activity into account. An exemplary performance record and history of compliance with job requirements will certainly bolster a case.
After demonstrating that your employer’s actions were motivated by retaliatory intent, the burden will shift to your employer, who must show that their personnel decisions would have been made, even if you had never engaged in FCA-protected activities. After that’s done, plaintiffs will have an opportunity to undermine their employer’s arguments.
With the passage of an amendment found in the Dodd-Frank Act of 2010, retaliation actions under the FCA are now governed by a 3-year statute of limitations, which begins to run on the date when the retaliation occurred. Attempt to file suit more than 3 years after the retaliation occurred and your case will almost certainly be dismissed.