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Yes: the False Claims Act (“FCA”) protects employees, contractors, and agents who engage in protected activity from retaliation in the form of their being “discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment.” 31 U.S.C. § 3730(h)(1).
FCA retaliation extends not only to employees and contractors, but also to partners. See U.S. ex rel. Kraemer v. United Dairies, L.L.P., 2019 WL 2233053 (D. Minn. May 23, 2019); Munson Hardisty, LLC v. Legacy Point Apartments, LLC, 359 F. Supp. 3d 546, 558 (E.D. Tenn. 2019) (LLC that was general contractor on defendant’s construction project was proper FCA plaintiff). In addition, the False Claims Act whistleblower protection law extends to physicians with staff privileges at a hospital. Powers v. Peoples Cmty. Hosp. Auth., 455 N.W.2d 371, 374 (Mich. Ct. App. 1990); El-Khalil v. Oakwood Healthcare, Inc., No. 19-12822, E.D. Mich. April 20, 2020.
A whistleblower who prevails in an anti-retaliation action under the FCA may recover:
Recently, a jury awarded more than $2.5 million to a whistleblower in an FCA retaliation case. As there is no cap on compensatory damages, FCA retaliation plaintiffs can potentially recover substantial damages for the retaliation that they have suffered.
And in 2020, two cardiologists formerly employed by Tenet Healthcare Corporation recovered $11 million in compensatory damages in an arbitration of claims of FCA retaliation, tortious interference with business expectancies, false light, and breach of contract.
The FCA protects:
Recent cases have interpreted this protected activity to include:
Protection attaches regardless of whether the whistleblower mentions the words "fraud" or "illegal." The employer need only be put on notice that litigation is a "reasonable possibility." A reasonableness standard is inherently flexible and dependent on the circumstances; thus, "no magic words—such as illegal or unlawful—are necessary to place the employer on notice of protected activity." Jamison v. Fluor Fed. Sols., LLC, 2017 WL 3215289, at *9 (N.D. Tex. July 28, 2017).
An FCA retaliation claim does not require proof of a viable underlying FCA claim. The FCA retaliation provisions "do[] not require the plaintiff to have developed a winning qui tam action"; they "only require [] that the plaintiff engage in acts [made] in furtherance of an [FCA] action." Hutchins v. Wilentz, Goldman & Spitzer, 253 F.3d 176, 187 (3d Cir. 2001). And because the Supreme Court has held that the FCA “is intended to reach all types of fraud, without qualification, that might result in financial loss to the Government” and “reaches beyond ‘claims’ which might be legally enforced, to all fraudulent attempts to cause the Government to pay out sums of money,” the term “false or fraudulent claim” should be construed broadly. U.S. ex rel. Drescher v. Highmark, Inc., 305 F. Supp. 2d 451, 457 (E.D. Pa. 2004).
Yes: the FCA protects whistleblowers who try to prevent one or more violations of the FCA, as long as they have an objectively reasonable belief that their employer is violating, or will soon violate, the FCA. Case law has clarified that efforts to stop an FCA violation are protected even if they are not meant to further a qui tam claim. For example, refusing to falsify documentation that will be submitted to Medicare is protected.
Similarly,a South Carolina district judge held that a relator engaged in protected conduct when she refused her employer's directive to obtain patient signatures and back-date the signatures, which relator perceived as an attempt to create fraudulent forms used to secure reimbursement from United States health insurance programs.
As the Fourth Circuit held in O’Hara v. Nika Technologies, Inc., 2017 — F.3d —- 2017 WL 6542675 (4th Cir. Dec. 22, 2017), an FCA retaliation plaintiff need not demonstrate their protected disclosure concerns fraud committed by their employer:
The plain language of § 3730 ( h ) reveals that the statute does not condition protection on the employment relationship between a whistleblower and the subject of his disclosures. Section 3730 ( h ) protects a whistleblower from retaliation for “lawful acts done … in furtherance of an action under this section.” 31 U.S.C . § 3730 ( h )( 1 ) . The phrase “an action under this section” refers to a lawsuit under § 3730 ( b ) , which in turn states that “[a] person may bring a civil action for a violation of [the FCA].” Id . § 3730 ( b )( 1 ) . Therefore, § 3730 ( h ) protects lawful acts in furtherance of an FCA action. This language indicates that protection under the statute depends on the type of conduct that the whistleblower discloses—i.e., a violation of the FCA—rather than the whistleblower’s relationship to the subject of his disclosures.
Yes, the act of internal reporting itself suffices as both the effort to stop the FCA violation and the notice to the employer that the employee is engaging in protected activity.
Yes. As the Second Circuit held in Fabula v. American Medical Response, Inc., an employee's refusal to sign fraudulent reimbursement documentation constitutes protected whistleblowing. There the court notes that "[t]here is, at best, a hair's-breadth distinction between complaining internally that a practice is illegal under the FCA and advising a supervisor of one's refusal to engage in that illegal practice."
Examples of protected conduct under the False Claims Act include:
The False Claims Act prohibits an employer from discharging, demoting, suspending, threatening, harassing, or in any other manner discriminating against a whistleblower. Prohibited retaliation includes:
A decision denying summary judgment in Baldwin v. Corecivic of Tennessee, LLC, No. 18-2390-JWB, 2020 WL 1952521 ( D. Kansas April 23, 2020) illustrates how harassment or a hostile work environment can be actionable retaliation under the FCA. The link between the alleged harassment and whistleblower's complaint to a federal agency was made explicit in remarks addressed to the workforce by management that raise a reasonable inference of a retaliatory motive.
[S]oon after filing his DOL complaint, the Warden called him into his office, asked him what he thought he was doing, accused him of being like a litigious Walmart shopper, and told him he had “big balls” for making the complaint, and that nothing was going to change. The Warden then expressed his dissatisfaction with Plaintiff at a company-wide meeting, where he told Plaintiff’s coworkers that the prison might be shut down if Plaintiff kept up his complaining. His coworkers began to call him names after this public dressing-down. Plaintiff was assigned to the allegedly undesirable position of patrolling the prison’s exterior perimeter, with no breaks during his 12-hour shift and no relief. The prison’s training manager, Sandra Elliott, instructed new employees to avoid Plaintiff because he was a trouble-maker and incorporated his photo into her introductory PowerPoint presentation. Plaintiff finds further evidence of intentional retaliation because Defendant’s managers failed to refer his various grievances, most of which stated that the complained-of mistreatment was in retribution for his DOL complaint, up the management chain to the company’s investigative team. Later, according to Plaintiff, his identity was leaked in connection with his confidential report of employee theft, resulting in a campaign of harassment presumably from his coworkers, who, among other things, let the air out of his car tires repeatedly, made prank phone calls to his home, threatened him, told him to stay away from the company holiday party for his own safety, put a dead mouse on his car windshield, and possibly even talked to an inmate about “shanking” him.
Yes. In Smith v. LHC Group, Inc., 2018 WL 1136072 (March 2, 2018), the Sixth Circuit held that where an employer ignores an employee's disclosures about fraud on the government and the employee is reasonably concerned that he may be charged with fraud by the government if he remains in the job, the employee's resignation is an actionable constructive discharge. In other words, a jury could find that the employer’s alleged fraudulent behavior plus the employee’s moral conscience and reasonable fear of being accused of participating in the employer’s fraud is enough to justify quitting. See also Byrd v. Nat'l Health Corp., No. 3:18-CV-00123, 2019 WL 403964 (E.D. Tenn. Jan. 31, 2019) and Bourne v. Provider Servs. Holdings, LLC, No. 1:12-CV-935, 2019 WL 2010596, at *6 (S.D. Ohio May 7, 2019).
A whistleblower must prove that:
Recently the Third Circuit held that FCA retaliation claims require proof of ‘but-for’ causation. DiFiore v. CSL Behring, LLC, 879 F.3d 71, 78 (3d Cir. 2018). Note, however, that "but for" caution is not tantamount to sole factor causation. See Burrage v. United States, 134 S. Ct. 881, 888-89 (2014) (an act is a “but-for” cause “[even if it] combines with other factors to produce the result, so long as the other factors alone would not have done so – if, so to speak, it was the straw that broke the camel’s back.”). In Bostock v. Clayton Cty., the Supreme Court clarified the burden of providing "but for" causation:
Title VII's "because of " test incorporates the "'simple'" and "traditional" standard of but-for causation. Nassar, 570 U. S., at 346, 360, 133 S. Ct. 2517, 186 L. Ed. 2d 503. That form of causation is established whenever a particular outcome would not have happened "but for" the purported cause. See Gross, 557 U. S., at 176, 129 S. Ct. 2343, 174 L. Ed. 2d 119. In other words, a but-for test directs us to change one thing at a time and see if the outcome changes. If it does, we have found a but-for cause.
590 U. S. __ (2020), slip op at *6.At the pleading stage, the showing necessary to demonstrate the causal-link part of the prima facie case is not onerous; the plaintiff merely has to prove that the protected activity and the negative employment action are not completely unrelated. United States ex rel. Dyson v. Amerigroup Tex., Inc., 2005 WL 2467689, at *3 (S.D. Tex. Oct. 6, 2005).
Arguably, “but-for” causation is not significantly more onerous than “motivating factor” causation. For example, the Second Circuit held in a post-Nassar Title VII retaliation case that the “but-for causation standard does not alter the plaintiff’s ability to demonstrate causation at the prima facie stage on summary judgment or at trial indirectly through temporal proximity.” Zann Kwan v. Andalex Group, 737 F.3d 834 (2d Cir. 2013) (a three-week period from Kwan’s protected activity to the termination of her employment is sufficiently short to make a prima facie showing of causation indirectly through temporal proximity). "But for" causation requires a plaintiff to prove the adverse employment action would not have occurred but for the defendant’s consideration of a protected activity and "sole factor" causation requires a plaintiff to prove that the defendant’s consideration of a protected activity was the only cause of an adverse employment action. See McDonald v. Santa Fe Trail Transp. Co., 427 U.S. 273, 282 n. 10 (1976).
Alleging that the decision-maker reacted negatively to the whistleblower raising the issue of regulatory requirements and prohibited her from using the term "illegal" on the job can be sufficient to allege causation at the pleading stage. United States ex rel. Sibley v. University of Chicago Medical Center, 44 F.4th 646 (7th Cir. 2022).
"Notice may be provided in a number of ways: for example, by informing the employer of `illegal activities' that would constitute fraud on the United States, . . . by warning the employer of regulatory noncompliance and false reporting of information to a government agency, . . . or by explicitly informing the employer of an FCA violation." McBride v. Peak Wellness Ctr., Inc., 688 F.3d 698, 704 (10th Cir. 2012).
Where an employee is hired to track compliance with regulatory requirements, some courts apply a presumption that he was merely acting in accordance with his employment obligations. In other words, a compliance employee must plead that he was not just doing his job. Some of the factors that courts consider in assessing notice include: whether the plaintiff’s complaints led to internal or external investigations; whether the plaintiff used the words, “illegal,” “unlawful,” “qui tam,” “fraud” or “fraudulent” in characterizing his concerns regarding the charges; whether the plaintiff’s “regular job duties” involved “investigating and reporting fraud” or, similarly, whether the plaintiff uncovered the alleged fraud through his performance of specifically “assigned task[s]”; and whether the plaintiff can rebut evidence that his supervisors had no knowledge of the protected activity. Hutchins v. Wilentz, Goldman & Spitzer, 253 F.3d 176, 189-92 (3d Cir. 2001).
Most courts reject a heightened notice requirement. "[T]he FCA no longer requires that conduct be in furtherance of an action under this section to be protected. Rather, the FCA protects any effort to stop 1 or more violations of this subsection. 31 U.S.C. 3730(h)(1). . . . If an employee does not need to take steps clearly in furtherance of a potential or actual qui tam action to engage in protected activity, the employee, even if charged with investigating potential fraud, also does not need to make clear their intentions of bringing or assisting in an FCA action, Yuhasz, 341 F.3d at 568, to satisfy the notice requirement. . . . By reporting [his/]her concerns directly to [his/her supervisor], [a] Plaintiff satisfie[s] the notice element of [his/]her . . . case." Mikhaeil v. Walgreens Inc., No. 2:13-CV-14107, 2015 WL 778179, at *9 (E.D. Mich. Feb. 24, 2015) (italics and emphasis added). See also Are "duty speech" disclosures protected under the False Claims Act?
The statute of limitations for FCA retaliation claims is three years from the date on which the retaliation occurred. FCA retaliation claims can be brought directly in federal court; there is no administrative exhaustion requirement.
With some exceptions, e.g., Weihua Huang v. Rector and Visitors of University of Virginia, 896 F. Supp. 2d 524, 548 n.16 (W.D. Va. 2012), most courts addressing this issue have held that § 3730(h) does not create a cause of action against supervisors sued in their individual capacities." Brach v. Conflict Kinetics Corp., 221 F. Supp. 3d 743, 748 (E.D. Va. 2016) (footnotes omitted) (citing Howell v. Town of Ball, 827 F.3d 515, 529-30 (5th Cir. 2016)). But arguably a False Claims Act retaliation claim can be brought against an individual as an alter ego of an employer corporation. United States ex rel. Brumfield v. Narco Freedom, Inc., No. 12 Civ. 3674 (JGK), 2018 WL 5817379, at *3 (S.D.N.Y. 2018) (citing cases).
Yes. FCA protected conduct includes “efforts to stop 1 or more violations’ of the Act,” which goes beyond disclosures concerning an actual exchange of money or property. See U.S. ex rel. Bahrani v. Conagra, 465 F.3d 1189, 1194 (10th Cir. 2006) (noting that the United States Supreme Court has given the FCA “an expansive reading, observing that it covers all fraudulent attempts to cause the government to pay out sums of money”) (internal citation omitted and quotation marks omitted). A company that provides false information in the course of competing for or seeking a government contract or grant arguably violates the FCA where the false statement has “a natural tendency to influence, or be capable of influencing, the payment or receipt of money or property.”
The FCA does not preclude the waiver of a private retaliation claim. See Brown v. City of S. Burlington, 393 F.3d 337, 346 (2d Cir. 2004). In contrast, a qui tam action cannot be dismissed without the written consent of the AG. A written release of claims in a severance agreement can be enforced to bar a retaliation claim but the release might be unenforceable to dismiss a qui tam action.
Yes, the NDAA whistleblower protection provisions provide a private right of action to an employee who suffers retaliation for disclosing information that the employee reasonably believes is evidence of:
Note that a recent district court ruling in Reed v. Keypoint Government Solutions, which might be erroneous, holds that an NDAA whistleblower retaliation claim must be brought in court within 2 years of the 210th day after the filing of the claim at the OIG.
The following table summarizes key distinctions between Section 3730(h) of the False Claims Act and Sections 827 and 828 of the NDAA:
| False Claims Act Whistleblower Protection | NDAA/Defense Contractor Whistleblower Protection Act | |
|---|---|---|
| Coverage | Employee, contractor, or agent of federal contractor | Employee of a contractor, subcontractor grantee, or subgrantee, or a personal services contractor |
| Scope of Protected Conduct (protected whistleblowing) | Protects lawful acts done by the employee, contractor, agent, or associated others (1) in furtherance of an action under the FCA or (2) other efforts to stop 1 or more violations | Protects disclosures to employer or the government concerning: -Violation of law, rule, or regulation related to a federal contract |
-Gross mismanagement of a federal contract or grant
-Gross waste of federal funds
-Abuse of authority relating to a federal contract or grant
Yes, in certain circumstances. Recently a Tennessee federal judge held in Munson Hardisty LLC v. Legacy Pointe Apartments that the False Claims Act’s anti-retaliation provision protects a general contractor on a construction project funded by the U.S. Department of Housing and Urban Development (HUD) from retaliation for opposing fraudulent misrepresentations to HUD. Read more about the decision here.
A False Claims Act qui tam complaint should not include classified information and any relator in the possession of classified information should seek guidance to avoid disclosing such information. But where a qui tam action might implicate sensitive information, the contractor is not entitled to step into the shoes of the Government to assert the Government’s interest in maintaining the confidential nature of the information. Johnson et al v. Raytheon Company, No. 3:17-CV-1098-D, 2019 WL 6914967 N.D. Texas 12/19/2019.
A judge denied summary in an FCA retaliation case where the whistleblower was included in a layoff just one month after the FBI executed its search warrant with the whistleblower's assistance and the employer knew about the whistleblower's participation in the FBI's investigation. UNITED STATES EX REL. BARRICK v. PARKER-MIGLIORINI INTERNATIONAL, LLC, Case No. 2:12-cv-381-DB (D. Utah 2020). In particular, the employer knew that the whistleblower provided documents to the FBI and the whistleblower refused to participate in an interview with the company without his attorney present.
A number of courts have rejected the argument that state-wrongful-discharge claims are preempted by the False Claims Act. See, e.g., Brandon v. Anesthesia & Pain Mgmt. Assocs., Ltd., 277 F.3d 936, 945 (7th Cir. 2002) ("There is nothing in § 3730(h) to lead us to believe that Congress intended to preempt all state law retaliatory discharge claims based on allegations of fraud on the government."); Boone v. MountainMade Foundation, 857 F.Supp.2d 111, 113 n.2 (D.D.C. 2012); Glynn v. EDO Corp., 536 F.Supp.2d 595, 608-09 (D.Md. 2008); Hoefer v. Fluor Daniel, Inc., 92 F.Supp.2d 1055, 1059 (C.D.Cal. 2000); Palladino ex rel. United States v. VNA of S.N.J., Inc., 68 F.Supp.2d 455, 465-74 (D.N.J. 1999).
The experienced whistleblower attorneys at leading whistleblower law firm Zuckerman Law have substantial experience representing whistleblowers disclosing fraud and other wrongdoing at government contractors and grantees. In 2017, Washingtonian named two of our attorneys top whistleblower lawyers. To schedule a free confidential consultation, click here or call us at 202-262-8959.
Our experience includes:
In addition, we have substantial experience representing whistleblowers under the Whistleblower Protection Act (WPA) and enforcing the WPA, the law that the NDAA whistleblower provisions are based upon. Both Bachman and Zuckerman served in senior positions at the Office of Special Counsel, where they oversaw investigations of whistleblower retaliation claims and whistleblower disclosures, and enforced the Whistleblower Protection Act.
The following client reviews are from whistleblowers at government contractors:
"I hired Mr. Zuckerman to pursue an action against a former employer that was attempting to use deceit in its pursuit of federal contracts, and which fired me for not participating in its schemes. Jason was not just very responsive, he was also engaging, spending a good deal of time and effort with me on the phone and by email learning the ins and outs of the case, discussing strategy, laying out alternatives, anticipating counter-arguments, etc, all with the highest integrity. In the end, Jason was able to negotiate a substantial settlement for me, and I believe the company learned not to fire employees for failing to participate in lying to the government. All in all, a very good outcome.
I have had the opportunity in my career to interact with numerous attorneys. Jason truly stands out. I wholeheartedly recommend him to anyone seeking a lawyer for wrongful termination and related employment issues."
"I was in a very difficult work situation dealing with the National Defense Authorization Act (NDAA) and whistleblower claims, and I needed legal representation. I was referred to Mr. Zuckerman by an attorney for a major corporation, who indicated that if they were in a similar situation, they would want Mr. Zuckerman on their side. From the get-go, Mr. Zuckerman listened to the details of my situation and believed in the merits of my case. He quickly dug into the details of my case and asked me thought-provoking questions, providing his legal expertise to help to build and shape my case. In doing so, he led me to see clearly how the employer wronged me. With his probing questions and knowledge of the relevant and applicable laws/statues, we filed a very strong NDAA and whistleblower claim, and combined with his tenacity, I was eventually able to settle with my employer and avoid a lengthy lawsuit. Mr. Zuckerman was very knowledgeable, professional, and always in my corner. He was always accessible, and always very responsive to my questions and needs. He accompanied me and represented me in official meetings, and he was always available to provide guidance, even emailing and responding to me very late in the evening. Mr. Zuckerman is competent, fair, ethical, and honest, and it was a pleasure working with him. I would not hesitate in recommending him to anyone who has experienced whistleblower retaliation."
