The False Claims Act Protects Whistleblowers From Retaliation

by | May 6, 2009 | Retaliation Law

The qui tam provision of the False Claims Act allows private whistleblowers, known as relators, to file suit on behalf of the United States for fraud perpetrated against the federal government. There is certainly an upside to being a whistleblower because, under the False Claims Act, the whistleblower receives a percentage of any recovery that the government gets.

But what are the potential downsides to being a whistleblower? Whistleblowers are bravely standing up to their employers to stop fraud against the United States. Needless to say, if a company is intentionally committing fraud, it generally does not want to get caught and is not going to appreciate its employee’s attempts to bring the fraud to light. Many potential whistleblowers have a real and justifiable fear of retaliation from their employer. However, fortunately, the False Claims Act provides robust protection against retaliation. Specifically, the False Claims Act provides:

“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.”

31 U.S. Code §3730(h)(1).

In practice, what does this mean? To establish retaliation under the False Claims Act, a whistleblower must show that: (1) he or she engaged in protected activity; (2) that the employer engaged in an adverse employment action against the whistleblower; and (3) the adverse employment action was because of the protected activity. Let’s take these one at a time:

First, what constitutes “protected activity?” A broad array of conduct qualifies as “protected activity,” including reporting the fraud to a supervisor, refusing to participate in violating the False Claims Act, taking actions to rectify the fraudulent activity, and pursuing a qui tam suit.

Second, what qualifies as an “adverse employment action?” The case law has taken an expansive view of what constitutes retaliation under the False Claims Act. Of course, termination qualifies as a retaliatory action. But so do lesser adverse employment actions such reprimands or reassignment of duties. Retaliation protection may even be available for constructive discharge—situations where the employee’s complaints of fraud have gone unheeded and the employee feels he or she has no choice but to quit or risk being implicated in the fraud.

Third, how does an employee prove that the adverse action was taken “because of” the protected activity? While courts have applied different standards here, it is clear that a whistleblower need not prove that the whistleblowing was the sole cause of the adverse action. Evidence such as close temporal proximity between the whistleblowing activity and the adverse action will help establish this element.

Whistleblowers should also take heart knowing that a wide array of damages is available under the False Claims Act retaliation provision. Specifically, a whistleblower who has been retaliated against may be awarded reinstatement with the same seniority status, two times the amount of back pay, interest on the back pay, litigation costs, and attorneys’ fees. And unlike some other employment discrimination statutes, like Title VII, there is no cap on compensatory damages. Whistleblowers are aided by the fact that there is no requirement that a whistleblower exhausts any administrative remedies before filing a lawsuit for retaliation.

Stepping up to be a whistleblower is brave and often scary. But with the help of an employment attorney, the protections provided by the retaliation provisions of the False Claims Act should give whistleblowers peace of mind.