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FCA and NDAA Whistleblower Protection Laws

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).

The whistleblower protection provisions of the National Defense Authorization Act (“NDAA”) protect whistleblowers who report waste, fraud or abuse.

If you have suffered retaliation for whistleblowing, contact our experienced whistleblower lawyers today by clicking here.

Does the False Claims Act protect whistleblowers against retaliation?

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).

What is protected whistleblowing or protected conduct under the False Claims Act Retaliation Provision?

The FCA protects:

  1. “lawful acts . . . in furtherance of an action under [the FCA]”; and
  2. “other efforts to stop 1 or more [FCA] violations.” 31 U.S.C. § 3730(h)(1).

Recent cases have interpreted this protected activity to include:

  • internal reporting of fraudulent activity to a supervisor;
  • steps taken in furtherance of a potential or actual qui tam action;
  • efforts to remedy fraudulent activity or to stop an FCA violation; and
  • refusal to violate the False Claims Act.

Does the False Claims Act anti-retaliation law protect efforts to stop a government contractor from defrauding the government?

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.

Is False Claims Act Whistleblower Protection Limited to Disclosures About the Whistleblower’s Employer?

No.  The whistleblower protection provision of the False Claims Act (FCA) protects “lawful acts done by the employee, contractor, agent or associated others in furtherance of an action under [the FCA] or other efforts to stop 1 or more violations of [the FCA].”

Recently the Fourth Circuit held in O’Hara v. Nika Technologies, Inc., 2017— F.3d —-2017 WL 6542675 (4th Cir. Dec. 22, 2017):

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.” 31U.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(hprotects 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.

Does the False Claims Act retaliation law protect internal reporting to a government contractor or grantee?

Yes: case law has clarified that 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.

Does the False Claims Act prohibit retaliation against an employee for the employee’s refusal to participate in a fraudulent scheme?

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.”

What acts of retaliation are prohibited by the False Claims Act anti-retaliation provision?

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:

  • oral or written reprimands;
  • reassignment of duties;
  • constructive discharge; and
  • retaliatory lawsuits against whistleblowers.

What type of constructive discharge is prohibited by the False Claims Act anti-retaliation law?

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.

What must a whistleblower prove to prevail in a False Claims Act whistleblower retaliation case?

A whistleblowers must prove that:

  1. the whistleblower engaged in protected activity;
  2. the whistleblower’s employer took an adverse employment action against him or her; and
  3. the adverse employment action was taken because of the whistleblower’s protected activity. 31 U.S.C. § 3730(h)(1).
To establish the requisite causal connection, a FCA whistleblower retaliation plaintiff must show that her complaint and her termination were not “wholly unrelated.” Clover v. Total System Svcs., Inc., 176 F.3d 1346, 1354 (III) (B) (11th Cir.1999).  This burden can be met with evidence of very close temporal proximity and evidence that the employer was aware of the protected whistleblowing at the time it made the decision to take an adverse employment action against the plaintiff. Holifield v. Reno, 115 F.3d 1555, 1566 (II) (B) (2) (11th Cir. 1997).
Recently the Third Circuit held that FCA retaliation claims require proof of ‘but-for’ causationDiFiore 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.”).

What damages can a whistleblower recover under the whistleblower-protection provision of the False Claims Act?

A whistleblower who prevails in an anti-retaliation action under the FCA may recover:

  • reinstatement;
  • double back pay, plus interest;
  • special damages, which include litigation costs, reasonable attorney’s fees, emotional distress, and other noneconomic harm from the retaliation. 31 U.S.C. § 3730(h)(2).

Recently, a jury awarded more than $2M to a whistleblower in a 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.

What is the statute of limitations for a False Claims Act Whistleblower Retaliation Case?

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.

False Claims Act Qui Tam Actions

Whistleblower Protections for Employees of Government Contractors and Grantees

Guide to NDAA Whistleblower Protection Law

For more information about whistleblower protections for employees of government contractors and grantees, including Department of Defense contractors, see our Practical Law Practice Note titled Whistleblower Protections Under the National Defense Authorization Act. This Practice Note surveys the legal protections for employees of federal contractors, subcontractors, and grantees that receive federal funds who report waste, fraud, or abuse involving federal funds, a violation of law, rule, or regulation related to a federal contract, or a substantial and specific danger to public health or safety.

In addition, the outline explains the procedures that govern the filing, investigation and adjudication of National Defense Authorization Act (NDAA) whistleblower retaliation claims.

Topics covered include:

  • Protected whistleblowing under the NDAA.
  • The scope of coverage of the NDAA’s whistleblower protection provisions.
  • The reasonable belief standard governing NDAA protected whistleblowing.
  • Proving “contributing factor” causation
  • The same-decision affirmative defense
  • Remedies or damages available to prevailing NDAA whistleblowers.

Experienced False Claims Act Whistleblower Retaliation and Whistleblower Protection Lawyers

best sexual harassment attorneys Washington DC Maryland VirginiaThe 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.  To schedule a free preliminary consultation, click here or call us at 202-262-8959.

Our experience includes:

  • Representing whistleblowers in NDAA retaliation claims before the Department of Defense, and Department of Homeland Security, Department of Justice Offices of Inspectors General.
  • Litigating False Claims Act retaliation cases.
  • Representing qui tam relators in False Claims Act cases.
  • Representing whistleblowers disclosing fraud on the government in Congressional investigations.
  • Training judges, senior Office of Inspector General officials, and federal law enforcement about whistleblower protections.

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.  Two of the attorneys on our team served in senior position at the U.S. Office of Special Counsel overseeing investigations of whistleblower retaliation claims and whistleblower disclosures.

  • Eric Bachman served as Deputy Special Counsel, Litigation and Legal Affairs, OSC, where he spearheaded an initiative to combat whistleblower retaliation at the Department of Veterans Affairs.  During Bachman’s tenure at OSC, the number of favorable actions for whistleblowers increased by over 50% agency-wide.
  • Jason Zuckerman served as Senior Legal Advisor to the Special Counsel at OSC, where he worked on implementation of the Whistleblower Protection Enhancement Act and several high-profile investigations, including a matter resulting in the removal of an Inspector General.

We have also written extensively about whistleblower protections for employees of government contractors and grantees, including the following articles and blog posts:

 

 

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