August 15, 2018 False Claims Act Information
What Pennsylvania Laws Protect Whistleblowers?
The broadest whistleblower protection comes, appropriately enough, from a statute known as the Pennsylvania Whistleblowers Act. 43 P.S. §§1421 et seq. In pertinent part, the statute provides that:
“No employer may discharge, threaten or otherwise discriminate or retaliate against an employee regarding the employee’s compensation, terms, conditions, location or privileges of employment because the employee or a person acting on behalf of the employee makes a good faith report or is about to report, verbally or in writing, to the employer or appropriate authority an instance of wrongdoing or waste.” 43 P.S. §1423(a).
Although the Whistleblower Law applies only to employees of a “public body,” that term has been broadly defined to include, in addition to state and local government, any other body “which is funded in any amount by or through Commonwealth or political subdivision authority or a member or employee of that body.” See Riggio v. Burns, 711 A.2d 497, 500 (Pa. Super. 1998) (en banc) (receipt of government funds made hospital a “public body” under the Whistleblower Law).
Thus, employees of an entity that receives Commonwealth funding of some type such as Medicaid reimbursement or highway transportation funds would be protected from retaliation for reporting about fraud or waste.
Pennsylvania Whistleblower Act Protections
The Act is far-reaching in its protections, covering actual reports or intentions to report about fraud or wrongdoing. Further, employees are protected from retaliation when they report to either their employer or an “appropriate authority.” 43 P.S. §1423(a). Nothing requires an employee to first report internally, which can often be a career-ending decision, despite the remedies later available under the Act.
Pennsylvania Whistleblower Act Limitations
There are certain limitations, however, primarily focused on avoiding employees gaining protection for actions taken in bad faith. Employees are only covered by the law if they make a good faith report of wrongdoing or waste. A good faith report must be made without malice or consideration of personal benefit, and the person making the report must have reasonable cause to believe the report is true.
The amended law makes clear that “[a]n employer is not barred from taking disciplinary action against [an] employee … if the employee’s report was submitted in bad faith.” 43 P.S. §1422. Further, although called a Whistleblower Law, the Pennsylvania statute is limited to providing protections for employees who report on instances of wrongdoing or waste. Unlike various state False Claims Acts, which allow whistleblowers to initiate and even prosecute fraud claims on behalf of government entities, Pennsylvania does not have a similar statute to allow those actions.
Pennsylvania Whistleblower Act Damages
Employees can be awarded a variety of damages, including reinstatement to their position, back wages, reinstatement of fringe benefits and seniority rights, other actual damages sustained and the costs of litigation, including reasonable attorneys’ fees and witness fees.
In Bailets v. Pennsylvania Turnpike Commission, 2018 Pa. LEXIS 1498 (Pa. 2018), the Pennsylvania Supreme Court upheld the trial court’s determination that an employee who was terminated for reporting suspected fraudulent conduct by a government contractor was entitled to an award of $1.6 million for economic damages and an additional $1.6 million for “harm to his reputation, humiliation, and mental anguish.” Id. at *8. The decision was particularly notable because it confirmed that damages for emotional distress are available to successful litigants under the Pennsylvania Whistleblower Law.
Additional Whistleblower Protection Laws
In addition to the general Whistleblower Law, there are a number of very specific Pennsylvania statutes that protect employees or others in specified situations. For example, any person who reports about an older adult needing protection from abuse or neglect may not be retaliated against, or intimidated, by employers or others. 35 P.S. §10225.302 (providing for recovery of treble compensatory damages, compensatory and punitive damages or $5,000, whichever is greater).
An employee or applicant for employment who invokes rights under the Clean Indoor Air Act – such as the right to a smoke-free workplace – is protected from retaliation pursuant to 35 P.S. §637.7. Also in the healthcare area, an employee may not be discharged or discriminated against for reporting or assisting in the investigation of hazardous substances in the workplace. 35 P.S. §7313. Interestingly, in that statute, the burden of proof is placed on the employer if the employee demonstrates that she exercised any right under the Act within six months prior to the alleged disciplinary or retaliatory action.
In terms of employment issues more generally, there are protections for employees who testify in a proceeding under the Commonwealth’s Minimum Wage Act, 43 P.S. §333.112(a); employees who report about a misclassification of employees as independent contractors under the Construction Workplace Misclassification Act, 43 P.S. §933.10; minors who refuse to work more than 44 hours in a week during school vacations, 43 P.S. §40.3; or a public employee who reports a violation of the Employment Verification Act, 43 P.S. §167.3.
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