In a recent decision, Third Circuit affirmed the dismissal of a False Claims Act (FCA) retaliation claim, holding that FCA retaliation claims require a showing of “but for” causation, i.e., proving that protected whistleblowing was the “but-for” cause of the adverse action. Setting aside whether “but for” is the correct causation standard, the decision in DiFiore v. CSL Behring LLC warrants FCA whistleblowers to consider also bringing NDAA whistleblower retaliation claims to avail themselves of the “contributing factor” causation standard.
DiFiore’s False Claims Act Whistleblower Retaliation Case
DiFiore worked for CSL Behring from 2008 until her resignation in 2012, first as an Associate Director of Marketing/New Products, and then, after a promotion in August 2011, as Director of Marketing. While at CSL, and particularly after her promotion, DiFiore became concerned about the activities of CSL and its employees in marketing drugs for off-label use and including off-label use in sales forecasts. DiFiore reported these concerns.
DiFiore alleged that following her protected disclosures, CSL began to retaliate against her by subjecting her to heightened scrutiny, reprimanding her for complaining too much, and directing her to “understand shades of gray.” DiFiore resigned shortly after CSL placed her on a performance improvement plan.
At trial, the district judge instructed the jury that DiFiore must prove that her protected whistleblowing was the “but-for” cause of the retaliation. DiFiore appealed this instruction, asserting that she should have only been required to prove that her protected whistleblowing was a “motivating factor” in the adverse actions taken by CSL. The Third Circuit affirmed the district court’s instruction, holding that the Supreme Court’s decision in Univ. of Tex. Sw. Med. Ctr. v. Nassar, 133 S.Ct. 2517 (2013) requires a retaliation plaintiff to prove “but-for” causation where a claim is brought under an anti-retaliation statute, like the FCA, that employs the phrase “because of.”
“But-for” Causation is Not Tantamount to Sole Factor Causation
Many courts have applied a “motivating factor” causation standard to FCA retaliation claims. But even if the causation standard in FCA retaliation claims is “but-for,” the whistleblower need not prove that whistleblowing was the “sole cause” of the adverse action. 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.”).
And 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) (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). And the EEOC Enforcement Guidance on Retaliation and Related Issues explains that “[t]here can be multiple ‘but-for’ causes, and retaliation need only be ‘a but-for’ cause of the materially adverse action in order for the employee to prevail.”
For more information about False Claims Act whistleblower protection, click here.
NDAA Whistleblower Retaliation Plaintiffs Need Only Prove “Contributing Factor” Causation
Nonetheless, the prospect of courts imposing a more onerous causation standard in FCA retaliation claims warrants FCA whistleblowers also bringing NDAA retaliation claims because the anti-retaliation provision of the NDAA employs a more favorable “contributing factor” causation standard.
Under the NDAA, the whistleblower prevails merely by demonstrating that the protected disclosure was a contributing factor in the personnel action. The whistleblower need not demonstrate the existence of a retaliatory motive to establish that protected conduct was a contributing factor in a personnel action. Once an NDAA whistleblower has proved contributing factor causation by a preponderance of the evidence, the employer can defeat the NDAA claim only by showing by clear and convincing evidence that it would have taken the same challenged action absent the protected disclosure.
Further, a whistleblower at a government contractor or grantee suffering retaliation for their whistleblowing may be able to pursue both FCA and NDAA retaliation claims. The whistleblower would first have to file the NDAA retaliation claim at the relevant federal agency’s Office of Inspector General and exhaust administrative remedies (cooperate with an OIG investigation for 210 days). The whistleblower could then remove the NDAA claim to federal district court and prosecute both the NDAA and FCA retaliation claims.
Pursuing both claims offers a whistleblower a better chance to establish liability while also maximizing the potential remedy. In particular, the anti-retaliation provision of the FCA authorizes the recovery of double back pay (double lost wages and benefits), whereas the NDAA authorizes the recovery of actual back pay. Both the FCA and NDAA whistleblower protection statutes also authorize reinstatement, uncapped compensatory damages, and attorneys’ fees.
For more information about NDAA whistleblower protection, see our article Whistleblower Protections Under the National Defense Authorization Act.
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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
-Substantial and specific danger to public health or safety
|Administrative Exhaustion||No exhaustion requirement; file directly in federal court||Must file initially at OIG and after 210 days, can remove claim to federal court|
|Causation Standard||"But for" causation||Contributing factor causation|
|Damages||Double back pay, reinstatement, uncapped special damages (emotional distress and harm to reputation), attorney’s fees||Back pay, reinstatement, uncapped special damages, attorney’s fees|
|Statute of Limitations||3 years||3 years|