April 7, 2017 False Claims Act Information
What Happens If a Prospective Employer Refuses to Hire You Because You Have Been a Whistleblower Before?
Although the federal False Claims Act (“FCA”) and most state statutes provide a whistleblower with claims against retaliation by an employer, it is not clear whether that protection extends beyond the specific company that you reported against. Unfortunately, some prospective or subsequent employers might try to avoid hiring you or even fire you if your prior litigation comes to light. Are you protected in that situation?
There really isn’t a clear answer to that question. And one warning about this entire discussion – although we will talk about protection against retaliation, it is important to understand that all a statute can do is allow you to sue if you believe you have been retaliated against. You are not “protected” in the sense that being fired or refused a job can’t happen.
The Federal False Claims Act’s Anti-Retaliation Provision
Focusing on the federal FCA, there were changes made to the anti-retaliation provision in 2010. The newer provision has a broader reach, but it is still not clear how far that reach extends.
Under both the prior version of the anti-retaliation provision and following the 2010 amendment, courts have reached different decisions as to whether an employer could be liable for retaliation in a situation where the employee’s conduct involved reports of wrongdoing by another entity. Compare United States ex rel. Sanchez v. Lymphatx, Inc., 596 F.3d 1300, 1304 (11th Cir. 2010) (“If an employee’s actions, as alleged in the complaint, are sufficient to support a reasonable conclusion that the employer could have feared being reported to the government for fraud or sued in a qui tam action by the employee, then the complaint states a claim for retaliatory discharge under § 3730(h).”); Sefen ex rel. United States v. Animas Corp., 2014 WL 2710957 (E.D. Pa. 2014) (dismissing plaintiff’s retaliation case because he failed to allege any connection to a false claim for payment against his employer); Mann v. Olsten Certified Healthcare Corp., 49 F. Supp. 2d 1307, 1314 (M.D. Ala. 1999) (“Whether the employee engaged in conduct from which a fact finder could reasonably conclude that the employer could have feared that the employee was contemplating filing a qui-tam action against it or reporting the employer to the government for fraud”) with Townsend v. Bayer Corp., 774 F.3d 446, 459 (8th Cir. 2014) (retaliating employer need not be accused of or involved in fraud for purposes of facing liability under § 3730(h)(1)); Cestra v. Mylan, Inc., 2015 WL 2455420 (W.D. Pa. 2015)(“Contrary to Defendants assertion, § 3730(h)(1) does not provide that a plaintiff will only be covered by this provision if the terminating employer either (a) violated the FCA or (b) had a close relationship with or was influenced by the target of the investigation.”); United States ex rel. Lang v. Nw. Univ., 2005 WL 670612, at *2 (N.D. Ill. Mar. 22, 2005) (“statute … contains no language requiring proof that the retaliation was for protected activity involving false claims by that same employer.”); Nguyen v. City of Cleveland, 121 F.Supp.2d 643, 649 (N.D. Ohio 2000) (finding the FCA’s retaliation provision “reaches an employer who discriminates against an employee” for reporting the false claims of a customer). See also United States ex. rel. Bias v. Tangipahoa Parish School Bd., 816 F.3d 315 (5th Cir. 2016) (upholding claim against school board participating in Marine Jr. ROTC program where school board’s harassment and unfounded complaints led US Marine Corps to take adverse employment action against officer).
Anti-Retaliation Provision Case Examples
The cases that allow claims to be asserted against a company other than the one involved in the fraud that a whistleblower reported have stressed the need to have broad protections for whistleblowers. As the court stated in Cestra v. Mylan, Inc., “[t]he purpose of § 3730(h) is ‘to protect persons who assist the discovery and prosecution of fraud and thus to improve the federal government’s prospects of deterring and redressing crime.’” 2015 WL 2455420, at *2 (W.D. Pa. May 22, 2015)(internal citations and quotation marks omitted). In Townsend v. Bayer Corp., the court discussed the rationale for providing protection against a different employer by addressing the employer’s motivation to retaliate if the employee reports a fraud, for example, against a major customer:
For example, an employer may lose a customer’s multi-million dollar account because an employee reports the customer’s fraudulent activities to the government. The employer clearly has motive to retaliate against its employee under those circumstances. We therefore agree with Townsend that the protections of the FCA’s anti-retaliation provisions should extend to such an employee, without requiring a showing that the employer itself was acting in concert with its customer to defraud the government, or acting in concert with the customer to orchestrate the retaliation.
774 F.3d at 460.
These cases provide much needed additional recourse for whistleblowers. Simply being able to recover back wages and related damages from an employer who fired you will be of limited use if you are essentially blacklisted from gaining employment in your field again. As a practical matter, this might vary depending on how narrow your field of employment is. Indeed, if your case comes to be widely regarded as having exposed outrageous misconduct and cheating, other potential employers could applaud your initiative and public-mindedness. It is equally likely, however, that many employers will simply not want to deal with someone who might speak out if problems are observed.
There are many instances where someone will witness fraud by an entity other than her own employer, but where the employer might react adversely once the reporting becomes known. If the whistleblower is not given some recourse in that situation, there could well be significant issues that could not be remedied, and many useful whistleblowers would be discouraged from stepping forward.
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