Protection Against Employer Retaliation

Retaliation Protection for Whistleblowers

The False Claims Act gives whistleblowers an incentive to file suits on the government’s behalf, with up to 30% of money recovered awarded to the whistleblower. But the False Claims Act also contains very strong protections for whistleblowers. The retaliation provision in the False Claims Act was instituted not so much for fairness, but to encourage False Claims Act litigation in cases where “if the person stands to lose his job, he may be unwilling to expose company fraud.”[1] In 2009, a new law expanded the whistleblower protection to contractors and agents, in addition to employees. If an employee, agent, or contractor is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against because of lawful efforts to stop a violation of the False Claims Act, he or she is entitled to “all relief necessary” to make the party whole, which may include reinstatement, double back pay, interest, and special damages, including attorneys’ fees.

Protected Individuals

Recent amendments to the Act extend protection beyond traditional employees to all contractors and agents of the employer. A whistleblower is entitled to the Act’s protection if in pursuit of a qui tam False Claims Act case on behalf of the government, or if the whistleblower is trying to stop fraud on the government and is retaliated against as a result. The employer must be aware of the qui tam action or the whistleblower’s efforts to stop fraud, but courts have generally not required the employee to provide the employer with detailed allegations and descriptions of fraud.

Courts have construed the scope of protected activity broadly in accordance with congressional intent. Generally, an individual “acts in furtherance” of an action if they have “taken steps” towards exposing false claims through investigation or internal complaints of fraud. However, the exact contours of protected activity may be difficult to define under new amendments in 2009 and 2010 and affected individuals are encouraged to consult with a qualified attorney to discuss the applicability of the law to particular circumstances.

Prohibited Retaliation

A whistleblower may bring an action for unlawful retaliation under the Act if that whistleblower was “discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment” because of the individual’s efforts to further an action under the False Claims act or effort to stop a violation of the Act.

False Claims Act actions are initially filed under seal, and thus not available for viewing by employers and other members of the public. Moreover, protection from retaliatory action extends to lawful actions take in furtherance of an action even before a lawsuit is filed, such as refusing to sell a product that the whistleblower knows the government would not pay for, or refusing to promote a drug off label.

Available Relief

Retaliatory actions in violation of the False Claims Act’s employee protections may entitle a whistleblower to:

• Reinstatement with the same seniority status the individual would have had if the discrimination had not occurred
• Double back pay with interest, and
• Compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorney’s fees

To seek protection under the statute, a whistleblower must file suit within three years of the alleged retaliation. An employee may seek relief for employer retaliation in violation of the statute even if a False Claims Act action is never brought or if one is pursued but is unsuccessful.

Moreover, individuals choosing to also bring suit under the qui tam provision of the False Claims Act may share in the recovery obtained by the government in an action or settlement. Whistleblowers in such suits may recover up to 30 percent of the government’s recovery, in addition to relief associated with unlawful employer retaliation.

The excerpt of the False Claims Act statute concerning employer retaliation is believed to be a complete, current version of the provision currently in force. Nonetheless, attorneys and qui tam relators should rely on the most up to date version of the federal law.

§ 3730. Civil actions for false claims

(h) Relief from retaliatory actions.–

(1) In general.–Any employee, contractor, or agent shall be entitled to all relief necessary to make that employee, contractor, or agent whole, if that employee, contractor, or agent is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment because of lawful acts done by the employee, contractor, agent or associated others in furtherance of an action under this section or other efforts to stop 1 or more violations of this subchapter.

(2) Relief.–Relief under paragraph (1) shall include reinstatement with the same seniority status that employee, contractor, or agent would have had but for the discrimination, 2 times the amount of back pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys’ fees. An action under this subsection may be brought in the appropriate district court of the United States for the relief provided in this subsection.

(3) Limitation on bringing civil action.–A civil action under this subsection may not be brought more than 3 years after the date when the retaliation occurred.

[1] H. Rep. No. 99-660, at 63; United States ex rel Barajas v. United States, 258 F.3d 1004, 1012 (9^th Cir. 2001).