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Can an Employer Retaliate Against an Employee for Bringing a False Claims Act Case?

by Hoyer Law Group, PLLC | Jul 15, 2013 | Whistleblowers

Whistleblowers who come forward with information about fraud against the government are some of the nation’s most courageous and noble citizens.  These employees should be honored and coveted by employers for helping companies maintain levels of integrity and professional responsibility.  However, the reality is that not all companies respond well to reports of fraud, let alone the actual filing of a qui tam suit.  In those cases, whistleblowers may face harassment, demotions, or even termination.

Because of the very realistic concerns about workplace consequences, one of the most common questions we receive from potential whistleblowers is:

What will happen to me if I become a whistleblower?

Retaliation in the workplace is a nearly universal concern for whistleblowers.  Prior to 1986, that fear was well-founded because there were no real protections in the False Claims Act (“FCA”) to prevent whistleblowers from being harassed, demoted or terminated.  To encourage whistleblowers to come forward without fear of retribution, Congress included an anti-retaliation provision in the modern version of the FCA.  That part of the law is officially known as 31 U.S.C. § 3730(h), but it is often referred to simply as “Section H.”

Section H is designed to discourage employers from taking negative employment actions, and to make an employee “whole” again if the employer does engage in such conduct.  The law provides several remedies for an aggrieved employee: twice the amount of owed backpay plus interest, compensation for special damages, and attorney’s fees and costs related to the Section H claim.  Perhaps most importantly, an employee must be reinstated to his or her position of employment, with the same seniority status as he or she would have had if not for the negative action.

To obtain these Section H benefit, the whistleblower must show two things:

(1) that the employee engaged in protected conduct; and
(2) that the employee was discriminated against because of the protected conduct.

U.S. ex rel.  Yesudian v. Howard Univ., 153 F.3d 731, 736 (D.C.Cir.1998).

“Protected conduct” is a legal term that means that the employee engages in an act in furtherance of efforts to stop a violation of the FCA.  While that can mean actually filing a qui tam case, it can also mean simply investigating and reporting suspicions of fraud.  Hutchins v. Wilentz, et al., 253 F.3d 176, 187-88 (3d Cir. 2001).  It is important to note that an employee may have a Section H claim even without ever filing an FCA case.  Id. at 188.  Courts around the country have taken different approaches to what constitutes “protected conduct” and the analysis will always be fact-specific, so it is very important that an employee concerned about potential retribution consult with an attorney to discuss their case.

To show that the discrimination was “because of” the protected conduct, an employee must show that (1) his employer knew he was engaged in protected conduct, and (2) the retaliation was motivated – at least in part – by the employee’s protected conduct.  This part of the law exists to ensure that Section H isn’t abused by aggrieved employees who are terminated for unrelated reasons and then attempt to “cry fraud” after the fact.  Neal v. Honeywell Inc., 33 F.3d 860, 863 (7th Cir.1994).

Documenting the Process

Because the Section H elements are so fact-driven and unique to each case, the most important thing a whistleblower can do is to take meticulous notes to document the process.  For example, a whistleblower may want to document:

  • To whom did I report my concerns of fraud, and what were their reactions?
  • What other individuals, especially superiors, are aware of my investigation and concerns?
  • Has anyone expressed concerns to me about my activities or reports?
  • Have there been any unfounded complaints about my work product or performance?
  • Have I recently had a job review that did not reflect accurately reflect my performance?
  • Have I been taken off projects, excluded from meetings, excluded from emails, not been permitted to review internal documents, etc.?

All of this information will be critical in proving the elements of a Section H claim.  An employer can defend against an allegation by showing that it had no knowledge of the employee’s conduct or that the negative employment action was not related to the protected activity at all.  Careful notes, including dates and times, will aid in identifying how an employee was treated differently after the employer became aware of the protected activity.  This can rebut the employer’s contentions and give an employee the right to recovery under Section H.

Weathering the Storm

It is important to recognize that a Section H claim is not preemptive, meaning it cannot prevent employers from taking negative action against a whistleblower.  Rather, Section H is a responsive remedy that kicks in after the relator has experienced negative consequences, and provides relief only once the relator has prevailed in proving the elements of the Section H claim.  The unfortunate reality is that an employee must be prepared to weather the storm for the duration of the case, but can find some comfort in knowing that there is a remedy in place to protect his or her interests in the end.

If you believe you have information regarding fraud against the government and are considering bringing a False Claims Act case, please contact James Hoyer for an evaluation of your claims.

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