When an employee discovers certain types of fraudulent activity at work, they sometimes take a significant risk in reporting this activity. Unscrupulous employers engaging in damage control may lash out against the employee for bringing fraudulent misdeeds to light by firing them, demoting them, or some other retaliatory action.

If the misdeed reported is based on a fraudulent claim for payment submitted to the federal government, then the False Claims Act likely applies.

What Is the False Claims Act?

The False Claims Act was implemented to stop businesses and individuals from committing fraud against the federal government by filing false or deceptive claims for payment. It provides severe civil penalties for anyone knowingly submitting a fraudulent claim to the federal government.

The law allows the Department of Justice to seek treble damages and monetary penalties linked to inflation.

The FCA also gives individuals the right to take action on behalf of the federal government through what is known as a qui tam lawsuit against defrauders of the federal government. If the private citizen’s case is successful, the private citizen may be entitled to a percentage of the monies recovered by the federal government.

When Was the False Claims Act Enacted?

The False Claims Act is nothing new in the United States, and it was enacted in 1863 in response to corrupt defense contractors who would submit fraudulent claims for payment. Back then, liable parties were responsible for two times the damages suffered by the government plus a penalty of $2,000.

To give the FCA more bite, Congress added incentives for whistleblowers to come forward in 1986. The qui tam provisions of the FCA were added that year and have since led to thousands of suits resulting in significant monetary settlements and judgments.

Today, the Department of Justice actively utilizes the FCA to fight fraud. In the fiscal year ending Sept. 30, 2021, the DOJ recovered nearly $6 billion in judgments and settlements from fraudulent actors. Whistleblowers were also quite active during that period, and they filed just shy of 600 qui tam suits in the fiscal year of 2021.

Are Whistleblowers Protected Under the False Claims Act?

Yes. The FCA provides robust protections for whistleblowers and has an expansive definition of who qualifies as a whistleblower. According to statutory and case law, employees, contractors, partners, and other agents of a company enjoy FCA protection for whistleblowing. The broad scope of the FCA’s protection demonstrates that the federal government wants individuals to come forward to denounce false claims against it.

When a whistleblower comes forward, employers may retaliate to protect their wrongdoings and for damage control. Whistleblowers face being skipped over for promotion, termination, and other adverse employment actions. Without protection from the federal government, it would make no sense for a whistleblower to report a false claim.

For example, a healthcare employee at a hospital or clinic might discover that their facility is engaging in redundant testing and report this information to a supervisor. The risk to the employee is significant if the supervisor is in on a fraudulent billing scheme. If they are, they might reassign the employee to other tasks and eventually phase them out of the schedule. Or they might skip them over for promotion.

Regardless of retaliation, whistleblowers need protection and incentive to report their employers’ violations if the FCA is successful. And they have it. An FCA retaliation attorney helps their clients pursue False Claims Act damages and represents them in qui tam lawsuits.

False Claims Act Retaliation Provision

The FCA protects whistleblowers from retaliatory actions for reporting, investigating, or trying to end fraud against the United States government. Retaliatory measures against a whistleblower may include but are not limited to the following:

• Firing, which could happen immediately or slowly over time
• Demotion, which also could occur at once or at some time down the line
• Suspension for unreasonable or unstated reasons
• Harassment from managers, employers, and or other employees
• Threats, which could also come from anyone working at the company

As you might imagine, these retaliatory actions typically lead to False Claims Act retaliation damages that are frequently monetary. When bringing a lawsuit based on an employer’s retaliatory actions, the FCA allows an individual to seek the following types of damages:

• Job reinstatement or position reinstatement
• Back pay plus interest and liquidated damages
• Compensation for litigation costs and attorneys’ fees

In some cases, compensatory damages, such as those awarded for emotional distress, may be available, as was the case of a whistleblower who was discriminated against, harassed, and fired. She subsequently brought an FCA lawsuit and successfully sued for emotional distress damages. Compensation for personal humiliation and damage to reputation may also be available.

To succeed in an FCA claim for damages, there are several conditions that a plaintiff must fulfill. The mere claim of loss is not enough. According to the statute, whistleblowers seeking compensation are required to prove three conditions:

• The whistleblower engaged in activity that was protected under the FCA
• The employer was aware of the whistleblower engaging in protected action
• The employer retaliated against the whistleblower because of said activity

Under the FCA, protected activities include actions taken to report or end fraudulent activities against the federal government. If the federal government is not the target of the fraud, then the provisions do not apply.

Specific types of protected actions that whistleblowers take might include:

• Filing a qui tam lawsuit
• Opposing or reporting bid-rigging
• Reporting the failure to follow good manufacturing practices
• Opposing or reporting kickback payments
• Opposing or writing defective products being sold to the US government
• Opposing or reporting double-billing

The employer must be aware of the whistleblower’s activities. For example, if an employer fires a whistleblower but does not know they were a whistleblower, there is likely no FCA case. However, there may be a case based on another theory of liability.

When filing a claim, the plaintiff must demonstrate when and how they gave their employer notice, and the information must verify the existence of the fraudulent activity. However, using the words fraud or illegal may not be necessary.

Finally, the employer must have taken retaliatory measures against the whistleblower because the whistleblower engaged in a protected activity. In other words, the whistleblower must demonstrate that engaging in the protected activity caused the employer to retaliate. However, this can be tricky sometimes.

For example, an employee with a poor work record who gets fired for engaging in a protected activity will likely have problems proving retaliation. It is certainly not impossible, but the courts require strong evidence that the protected activity directly led to the acts suspected of retaliatory and not something else.

It is essential to remember that whistleblowers can take two separate actions against an employer they reasonably suspect defrauding the US government. The first is a lawsuit based on the damages they suffered from the retaliation taken by the employer for engaging in a protected activity. The second is a qui tam lawsuit on behalf of the federal government.

When you discuss your case with an FCA attorney, they will review the facts and determine appropriate actions. Both can result in significant settlement awards or verdicts.

As stated, retaliation lawsuits allow for damages. In qui tam cases, the whistleblower gets a percentage of the money recovered on behalf of the federal government. This percentage varies depending on whether the US government joins the whistleblower in the qui tam action.

The plaintiff receives a higher award percentage if the case proceeds without the government. Currently, payouts can range between 15% and 30% depending on the facts of the case.

When calculating a whistleblower’s share, the courts use the amount recovered rather than the amount the government lost. Because the government can seek up to three times the amount it lost, whistleblowers may receive a substantial payout for suing on behalf of the federal government.

Qui tam cases are not permitted when the whistleblower is found guilty of fraud related to the employer’s fraudulent activity. These claims are also banned when the government or another party is already pursuing qui tam legal action.

Acting quickly when you suspect your employer is defrauding the US government will help preserve your claims. Schedule a consultation with a lawyer to discuss your options and protect your case.

False Claims Act Retaliation: Statute of Limitations

One of the most critical aspects of the FCA is its statute of limitations. The False Claims Act statute of limitations dictates the time limits the government and qui tam filers have to take legal action.

According to its terms, an FCA lawsuit must be filed within six years of the fraudulent action. When the facts of the fraud become known or should have become known to a United States official charged with acting on the scam, the time limit is reduced to three years. Under no circumstances can a suit be filed ten years or more after the date of the fraudulent act.

This time limit makes it essential for whistleblowers to act quickly when they uncover an FCA violation. Once the statute of limitations has passed, the whistleblower loses their right to sue and receive any potential monetary damages and proceeds.

Importance of a False Claims Act Retaliation Attorney

If you are a victim of FCA retaliation, you need a knowledgeable attorney with a track record of successfully handling retaliation cases. The False Claims Act is a complex law with strict provisions and is unforgiving in its procedural and substantive requirements. With an FCA retaliation attorney representing you, your legal bases are covered; you never have to worry about the extensive legal rules. Your lawyer will handle everything.

Your FCA lawsuit involves an employer, so you can expect the defense to have competent attorneys fighting your lawsuit. You deserve the same. If you have a valid whistleblower claim, your lawyer will work hard to build a formidable case, which requires them to gather solid evidence, negotiate with the defense, and even represent you at trial when necessary.

At Wenzel Fenton Cabassa P.A., we fight to preserve the valuable careers of our clients and help them restore the dignity they deserve and the reputation they have built over the years. Regarding FCA retaliation cases, our knowledge of how violations typically occur and our experience fighting for whistleblowers have earned us the reputation of being competent and caring employment lawyers.

Contact our office today for a free consultation to discuss how we can potentially help you pursue justice for the retaliatory acts you have suffered. We can also discuss the possibility of representing you in a qui tam suit. Call today.

Please Note: At the time this article was written, the information contained within it was current based on the prevailing law at the time. Laws and precedents are subject to change, so this information may not be up to date. Always speak with a law firm regarding any legal situation to get the most current information available.