Whistleblower, False Claims Act & Qui Tam Information

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by The Law Offices of Jason S. Coomer, PLLC

Federal False Claims Act Whistleblower Protection by Federal False Claims Act Whistleblower Lawyer Jason S. Coomer

The Federal False Claims Act not only allows whistleblowers to seek compensation on the government's behalf from companies and people that have defrauded taxpayers out of government money, but also provides whistleblower protections to whistleblowers to protect them from potential retaliation from employers and/or contractors.

If you are a Medicare Fraud Whistleblower, Defense Contractor Fraud Whistleblower, Stimulus Fraud Whistleblower, Pharmaceutical Marketing Representative Whistleblower or other government fraud whistleblower, it is important to understand what whistleblower protections you may have available to you under the Federal False Claims Act and other whistleblower protection laws.  It is also important that as a whistleblower you are prepared for potential retaliation and protect yourself from potential retaliatory actions.

Protection against Whistleblower Retaliation

Unfortunately, many companies that are violating the law and committing Medicare Fraud, Defense Contractor Fraud, and other forms of fraud against the United States will also take aggressive retaliatory measures against whistleblowers that step up to prevent unlawful, fraudulent, and unethical actions.  These retaliatory actions can include making disparaging and defamatory comments, demoting whistleblowers, casting whistleblowers as troublemakers, suspending suspected whistleblowers, reducing or cutting pay, transferring the whistleblower, denying the whistleblower promotions, denying the whistleblower benefits, terminating the whistleblower on false charges, unlawfully releasing personal information about the whistleblower, isolating the whistleblower from other employees or information, and threatening the whistleblower.

As such, it is important for whistleblowers to understand and be prepared for potential retaliatory actions when they file a qui tam false claims act lawsuit or other whistleblower action.  More specifically, it is also important to realize that during the initial investigation of and filing of a Qui Tam False Claim Act Lawsuit, the claim is initially kept under seal and protected.  This initial filing period will allow the whistleblower a protection period to prepare for potential retaliatory actions prior to the company knowing the claim that has been filed.  During this time it is often important for the whistleblower to prepare for their employer to learn about the claim and work with a whistleblower protection lawyer to make sure that the whistleblowers are aware of their rights and employment status as well as anticipate any potential problems or needs that may arise in the future.   

Whistleblower Protection Laws

Whistleblower protection laws serve to prevent an employer from engaging in retaliatory conduct (making disparaging and defamatory comments, demoting whistleblowers, casting whistleblowers as troublemakers, suspending suspected whistleblowers, reducing or cutting pay, transferring the whistleblower, denying the whistleblower promotions, denying the whistleblower benefits, terminating the whistleblower on false charges, unlawfully releasing personal information about the whistleblower, isolating the whistleblower from other employees or information, and threatening the whistleblower) against an individual that has blown the whistle on fraudulent conduct and unlawful conduct including False Claims Act Lawsuits.

There are a variety of types of whistleblower protection statutes that may apply to a particular whistleblower action.  The main goal of these statutes is to offer protection to heroes and whistleblowers that are strong and brave enough to stand up to corporations and senior executives that are fraudulently stealing from the United States government, state government, or local governments or intentionally violating health and safety laws.  

Whistleblower Protection Under the Federal False Claims Act

The Federal False Claims Act has strong whistleblower protection provisions that protect Qui Tam False Claims Act whistleblowers from retaliatory actions by violators of the Federal False Claims Act.

Under Section 3730(h) of the False Claims Act, "[a]ny employee who is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment by his or her employer because of lawful acts done by the employee on behalf of the employee or others 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 this section, shall be entitled to all relief necessary to make the employee whole. Such relief shall include reinstatement with the same seniority status such employee would have had but for the discrimination, 2 times the amount of back pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys' fees. An employee may bring an action in the appropriate district court of the United States for the relief provided in this subsection."

As such, any employer that discharges, demotes, harasses, or otherwise discriminates against a Federal False Claims Act Whistleblower because of lawful acts by the employee in furtherance of an action under the Federal False Claims Act can be liable to that Federal False Claims Act whistleblower for reinstatement, double back pay, and compensation for any special damages including litigation costs and reasonable attorneys' fees.

Fraud Enforcement and Recovery Act of 2009 Expanded Whistleblower Protections to Include Subcontractors and Grantees (May 2009)

In May 2009, the Fraud Enforcement and Recovery Act of 2009 was signed into law which made important amendments to the Federal False Claim Act.  Included in these Amendments, the Act redefines "claim" to include claims submitted "to a contractor, grantee, or other recipient, if the money or property is to be spent or used on the Government's behalf or to advance a Government program or interest."  This language makes explicit the ability of Government and whistleblowers to pursue subcontractors and grantees.  This expansion will create potential liability to health care providers that commit Medicare Fraud and other forms of Health Care Fraud against the United States Government.  It should also extend False Claim Act whistleblower protections to employees of health care providers that are subcontractors receiving Medicare benefits or grantees of federal government grants.

The Act also expands the anti-retaliation provisions from only employees to include "contractors and agents" who "act to stop one or more violations."  This expanded protection could extend to contractors in government-funded managed care plans who take action to stop false reporting or illegal denial of service by the plan.  These expansions to the Federal False Claims Act should increase the number of Federal False Claims Act Lawsuits, allow the Federal Government to crack down on fraud and wasteful spending as well as recoup money that has been fraudulently obtained, and help protect False Claims Act Whistleblowers from unlawful retaliatory actions.

American Recovery and Reinvestment Act of 2009 (February 2009)

In February 2009, the American Recovery and Reinvestment Act of 2009 was signed into law which includes significant new whistleblower provisions. Section 1553 of the Act prohibits any private employer or state or local government that receives any funds pursuant to the Act from retaliating against an employee who discloses, internally or externally, information that the employee reasonably believes constitutes evidence of one or more of a number of specified improper uses of stimulus funds, including gross mismanagement of an agency contract or grant, gross waste of covered funds, or an abuse of authority related to the implementation or use of covered funds. Section 1553 establishes procedures and damage remedies that are similar in some ways to those with which many employers are familiar under Section 806 of the Sarbanes-Oxley Act ("SOX"), but its whistleblower provisions go beyond the whistleblower protections of SOX in several respects.

OSHA Whistleblower Protection and Whistleblower Protection Lawsuits

The Occupational Safety and Health Act is designed to regulate employment conditions relating to occupational safety and health and to achieve safer and more healthful workplaces throughout the nation. The Act provides for a wide range of substantive and procedural rights for employees and representatives of employees. The Act also recognizes that effective implementation and achievement of its goals depend in large measure upon the active and orderly participation of employees, individually and through their representatives, at every level of safety and health activity.

To help ensure that employees are, in fact, free to participate in safety and health activities, Section 11(c) of the Act prohibits any person from discharging or in any manner retaliating against any employee because the employee has exercised rights under the Act. These rights include complaining to OSHA and seeking an OSHA inspection, participating in an OSHA inspection, and participating or testifying in any proceeding related to an OSHA inspection.

OSHA also administers the whistleblowing provisions of sixteen other statutes, protecting employees who report violations of various trucking, airline, nuclear power, pipeline, environmental, rail, consumer product and securities laws.

A person filing a complaint of discrimination or retaliation will be required to show that he or she engaged in protected activity, the employer knew about that activity, the employer subjected him or her to an adverse employment action, and the protected activity contributed to the adverse action. Adverse employment action is generally defined as a material change in the terms or conditions of employment. Depending upon the circumstances of the case, "discrimination" can include:

  • Firing or laying off

  • Blacklisting

  • Demoting

  • Denying overtime or promotion

  • Disciplining

  • Denial of benefits

  • Failure to hire or rehire

  • Intimidation

  • Reassignment affecting prospects for promotion

  • Reducing pay or hours

The 17 statutes enforced by OSHA and the regulations governing their administration are listed below. Click on any statute to see the whistleblower provisions:

Regulations

(h) RELIEF FROM RETALIATORY ACTIONS

(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 other manner discriminated against in the terms and conditions of employment because of 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 1 or more violations of this subchapter.

(2) RELIEF.—Relief under paragraph (1) shall include reinstatement with the same seniority status that employee, contractor, or agent would have had but for the discrimination, 2 times the amount of back pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys’ fees. An action under this subsection may be brought in the appropriate district court of the United States for the relief provided in this subsection.

 

Economic Incentives for Whistleblowers Lawsuits, Government Fraud Lawsuits, and Qui Tam Lawsuits

When a government imposes a penalty, for the doing or not doing an act, and gives that penalty in part to whistleblowers that will sue for the same, and the other part of the recovery goes to the government, and makes it recoverable by action, such actions are called "qui tam actions", the plaintiff is suing on their own behalf as well for the government and taxpayers.

Qui tam provisions of the False Claims Act are based on the theory that one of the least expensive and most effective means of preventing frauds on taxpayers and the government is to make the perpetrators of government fraud liable to actions by private persons acting under the strong stimulus of personal ill will or the hope of gain.

The strong public policy behind creating an economic gain for whistleblowers is that  the government would be significantly less likely to learn of the allegations of fraud, but for persons in certain positions with specialized knowledge of fraud that has been committed. Congress has made it clear that creating this economic incentive is beneficial not only for the government, taxpayers, and the realtor, but is an efficient method of regulating government to prevent fraud and fraudulent schemes.

The central purpose of the qui tam provisions of the False Claims Act is to set up incentives to supplement government regulation and enforcement by encouraging whistleblowers with specialized knowledge of fraud going on in the government to blow the whistle on the crime.

The whistleblower's share of recovery is a maximum of 30 percent and the government's prior knowledge of fraud now does not necessarily bar a whistleblower from collecting lost revenue. If the government takes over the lawsuit, the relator can "continue as a party to the action." The defendant is also required to pay for the relator's attorney fees. The whistleblower is also protected from retaliatory actions by his or her employer. As a result a 1986 amendment to the False Claims Act, qui tam lawsuits have increased dramatically.   Though the amendment was first made for corrupt defense contractors, the amendment has uncovered billions of dollars in health care fraud and will probably apply to fraudulently obtained TARP and Bail Out Funds.

Blowing the Whistle on Those that Commit Fraud Against the United States Government, First to File Provisions of the Federal False Claims Act, and Preserving Relator Rights to Share in Recovery of Funds

If you are aware of a defense contractor, highway contractor, large health care company, or other large contractor or subcontractor that is defrauding the United States Government out of millions or billions of dollars, it is important to blow the whistle on the fraud.  By reporting the fraud you can save the government and taxpayers large amounts of money.  And if you are the original source with special knowledge of the fraud and are the first to file a qui tam false claims act claim on the fraud you can recover a substantial award for your service.

If you are aware of Medicare Fraud or other Government Fraum, please feel free to contact Federal False Claims Act Whistleblower Fraud Lawyer Jason Coomer via e-mail message or go to his Law Office Qui Tam False Claims Act Web Site

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