By: Don McKenna

 

The primary purpose of the qui tam provisions of the False Claims Act has been to encourage insiders with knowledge of fraud on the Government to come forward and blow the whistle.  The 2009 FERA amendments to the False Claims Act added further encouragement by providing greater protection for would be whistleblowers.  The amendments broaden the scope of conduct protected.  The amendments also include contractors and agents as persons protected - in addition to previously protected employees.

31 U.S.C. § 3730 (h) RELIEF FROM RETALIATORY ACTIONS. - now reads:

(1)IN GENERAL - 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 manner discriminated against in the terms or conditions of employment because of the lawful acts done by the employee, contractor or agent on behalf of the employee, contractor, or agent or associated others in furtherance of other efforts to stop one or more violations of this subchapter. 

CONTRACTORS AND AGENTS NOW COVERED

Prior to the amendments, the only persons covered by the False Claims Act whistleblower protection statute were employees retaliated against by their employer.  Now the False Claims Act protects contractors and agents of a target defendant from retaliation.  The scope of persons now protected has been greatly expanded.  The terms “contractor” and “agent” are so broad that they can be argued to include most persons who do business with a potential target defendant. 

Examples include: independent sales persons for a medical device or pharmaceutical manufacturer;  an outside information technology contractor for a hospital who discovers the hospital has a computer program to systematically upcode charges to Medicare; outside testing inspectors for a defense contractor; independent quality auditors for government contractors.  The potential list is endless.  The hope is that including these new groups within the whistleblower protection of the False Claims Act will encourage more people with knowledge of fraud on the Government to come forward with their information.

PERSONS OTHER THAN THE EMPLOYER ARE SUBJECT TO LIABILITY

Prior to the FERA amendments, only employers of employees were subject to liability.  The amendments struck the words “by his or her employer” from the statute.  Now persons or entities other than an employer may be held liable for discriminating against a person, in the terms or conditions of their employment, for actions taken to stop violations of the False Claims Act.

We can use our prior example of an information technology contractor for a hospital who discovers the hospital has a computer program to systematically upcode charges to Medicare to illustrate.  If the IT Contractor confronts hospital administration about the upcoding in an attempt to stop the false charges to Medicare, the hospital may retaliate by firing the IT contractor.  Prior to the amendments, the contractor had no cause of action.  With the amendments in place,  the IT contractor now has a cause of action against the hospital and may sue for damages, which would include at least two times his lost compensation from the hospital.

ACTIONS ATTEMPTING TO STOP THE SUBMISSION OF FALSE CLAIMS ARE NOW COVERED

The FERA amendments to the False Claims Act whistleblower protection provisions greatly broadened the type of whistleblower conduct protected.  The previous version of the act covered: acts “in furtherance of an action under this section, including investigation for, initiation of, testimony for, or assistance in an action filed or to be filed under [the False Claims Act].”  Under this old language, Defendants often successfully argued that an employee who simply reported fraud to his superiors, or tried to stop fraudulent conduct, was just doing his or her job.  The Defendants argued that the whistleblower wasn’t contemplating a False Claims Act case “until after he got fired and decided to seek revenge against the employer.”  Thus, argued defendants, his acts in reporting and attempting to stop the fraud on the Government were not acts “in furtherance” of a False Claims Act case.

The amended whistleblower protection provision protects the “lawful acts done by the employee, contractor, agent, or associated others in furtherance of other efforts to stop 1 or more violations of this subchapter.”  The amendment makes clear that the actions of employee, agent or contractor taken to try and stop a violation of the False Claims Act are protected from retaliation.  Now employees and others are protected from retaliation when they send e-mails advising the employer or other entity to cease certain conduct, because it is violative of the False Claims Act.   Protected conduct also includes attempting to stop the submission of false claims by reporting the fraudulent conduct or claims to superiors.  In fact, the ways in which one might engage in lawful acts to stop the submission of False Claims is limited only by creative imagination.

ADVICE FOR WHISTLEBLOWERS ATTEMPTING TO STOP FALSE CLAIMS

If you are attempting to stop the submission of false claims for payment to the United States, keep up the good work.  In October of 2009, Reuters reported that $200 billion per year is lost to Medicare fraud alone.  Be sure to document your efforts to  stop the submission of false claims and keep personal copies of all your documentation, whether it be letters, memos or e-mails.  This will greatly increase your chances of bringing a successful suit should you be retaliated against for your lawful actions.  Finally, if you are retaliated against, contact an experience False Claims Act attorney who can fully advise you of your rights and help you bring a whistleblower retaliation claim.

Don McKenna is the author of this blog and a False Claims Act whistleblower attorney with Hare, Wynn