After a whistleblower reports fraud, their employer may try to punish them. Unfortunately, employer whistleblower retaliation is fairly common, but the attorneys at Bracker & Marcus LLC are well-versed in this aspect of litigation.

Recognizing that employers were likely to retaliate against whistleblowers, Congress has included anti-retaliation provisions in most, if not all, whistleblower statutes. Although the provisions are largely the same, there are minor differences among them. Moreover, how the protections are interpreted and applied vary by Circuit.

False Claims Act Whistleblowers

Federal and state False Claims Acts (FCA) have provisions that protect employees, contractors, and agents from being discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against because of lawful acts done in furtherance of a False Claims Act case or other efforts to stop False Claims Act violations. 

Let’s break this down beyond the legalese.

Who is protected under the False Claims Act?

The statute says employees, contractors, and agents. This generally means that the protection only extends to the employer/employee relationship, whether W-2 or 1099. Outsiders, for example, have no protection under the statute. Nor do whistleblowers receive protection from those who were never their employers.

For example, if a potential employer refuses to hire you because you are a whistleblower, this provision does not apply. However, if you are fired by a current employer because they found out you blew the whistle on a previous employer, that would be a violation of the FCA.

Additionally, if you are the “associated other” of a whistleblower, such as a spouse or family member, your employer cannot retaliate against you as a way to get back at the whistleblower.

What actions are whistleblowers protected from? 

In sum, anything having to do with employment. As the list says, discharge, demotion, suspension, threats, harassment, and other discrimination. Taking away your job duties. Withholding bonuses. Putting you in a closet. Failing to promote. What about post-employment issues, like blackballing? Courts are split on this issue.

What triggers the whistleblower protection? 

One of two things. First, acts in furtherance of a False Claims Act case. This can include investigation, speaking with the government, or filing a lawsuit. 

Second, acts to prevent False Claims Act violations. This can include refusing to participate in the fraud, internal whistleblowing, or educating others as to the illegality of the actions.

However, to trigger these protections, courts have generally held that you have to put the employer on notice that you are acting in furtherance of an FCA action or to prevent further fraud. If you were fired for snooping, and the employer has no reason to know you were investigating fraud, so you won’t be protected. 

Assume you complain that the provider’s actions are putting patients at risk, that a contractor is violating the terms of its contract with the government, or that employees aren’t licensed properly. Those may be the basis for an FCA case, but you are not complaining about fraud against the government and so you are unlikely to be protected by whistleblower retaliation laws. 

Only if you are protesting a False Claims Act violation, e.g., fraudulent billing, are you likely to be protected by the courts. Moreover, if it is your job to report these things (for example, if you work in compliance), then you are held to an even higher standard. You have to make extra-clear that you aren’t just disclosing a run-of-the-mill compliance violation but that this is a violation of the False Claims Act.

Courts also differ on whether there had to be an actual violation or just a “reasonable belief” that a False Claims Act violation occurred. And even then, courts differ on how they apply that reasonable belief standard. 

For example, even if a whistleblower has a subjective belief that its employer is submitting false claims to the federal government, courts may differ on whether that belief is adequate based on the employee’s scope of knowledge, or whether they can apply facts unknown to the whistleblower under an objective belief standard.

What if my employer says they fired me for another reason? 

Courts generally require you to show that “but for” the whistleblowing, you would not have been fired. Although the application of this standard varies, generally speaking, the question is, if you had done all the other things they say you did, would they have still fired you? Or was the whistleblowing the straw that broke the camel’s back? 

If they provide a valid reason for your firing, it is up to you to show that reason is pretextual, and but for the whistleblowing, you would still be employed.

What is my relief? 

The False Claims Act is one of the most generous employment statutes, awarding reinstatement, double the amount of back pay, interest, and special damages, as well as attorneys’ fees and costs.

How long do I have to file my whistleblower retaliation claim? 

You have three years from the date of the retaliation to file a claim. There can be multiple instances of retaliation leading up to your termination, so you will want to file before the statute of limitations has run on the first claim.

Generally, if you are within the statute of limitations, you can include this claim with your qui tam case. Nothing will happen while the government investigates the fraud, but once the case becomes unsealed, you can litigate or settle these claims together. 

Bracker & Marcus LLC routinely litigates retaliation claims in conjunction with qui tam allegations.

Internal Revenue Service (IRS) Whistleblowers

Beginning July 2019, the Taxpayer First Act prohibits any “employer, officer, employee, contractor, subcontractor, or agent” of an employer from whistleblower retaliation following reported violations of the IRS rules or tax fraud. Thus, unlike the False Claims Act statute, these protections extend to acts committed by coworkers and other agents, not just decisions made by the employer.

These protections extend not only to disclosures to the IRS and other government agencies including the Department of Justice, but also to internal disclosures to supervisors and officers with the authority to investigate, discover, or terminate misconduct. This is important because oftentimes, IRS whistleblower reports are confidential, but employers may make assumptions on who reported it based on previous internal complaints.

Congress did not want to deter potential whistleblowers from coming forward based on their rudimentary understanding of the complex internal revenue code. And so an IRS whistleblower need only have an objectively reasonable belief, even if that belief is mistaken, that they are reporting tax fraud.

Similar to the False Claims Act, the IRS whistleblower may be entitled to reinstatement, double back pay, lost benefits, interest, and attorneys’ fees and costs.

IRS whistleblower retaliation complaints are filed with the Department of Labor (DOL), which conducts an independent investigation. If the DOL fails to issue a report within 180 days, the whistleblower can file a lawsuit in federal court. Defendants are not able to enforce arbitration provisions in employee contracts to avoid this process.

The whistleblower has just 180 days from the retaliatory act to file their claim with the DOL, and so time is of the essence to contact a whistleblower attorney.

U.S. Securities and Exchange Commission (SEC) Whistleblowers

Protections for whistleblowers of SEC violations take two forms: the Dodd-Frank Act and the Sarbanes-Oxley Act (SOX).

The Dodd-Frank Act protects individuals who blow the whistle to the SEC. It also may protect retaliation against whistleblowers for internal disclosures if the whistleblower also disclosed the violations to the SEC. SOX, however, protects both internal and SEC reporting.

There are many other differences between the two statutes as well.

  • Dodd-Frank awards double back pay damages but no special damages; SOX awards single back pay damages and special damages. Both include reinstatement and attorneys’ fees.
  • Dodd-Frank cases are filed in federal court; SOX complaints are filed with the Department of Labor under OSHA.
  • Dodd-Frank has a six-year statute of limitations; SOX claims must be filed within 180 days of the retaliation.
  • SOX cases are exempt from arbitration clauses, but Dodd-Frank complaints are not.
  •  SOX has a lesser causation standard than Dodd-Frank cases.
  • SOX applies to any employer; Dodd-Frank has a more limited scope.

Experienced SEC whistleblower counsel is necessary to determine which type of claim is best for a specific case. 

Money Laundering Whistleblowers

Individuals who report concerns about money laundering have the broadest scope of protections of any whistleblower. Under Section 6314(g) of the Anti-Money Laundering Act (AMLA), no employer may directly or indirectly, discharge, demote, suspend, threaten, blacklist, harass, or in any other manner discriminate against a whistleblower in the terms and conditions of employment or post-employment because of certain forms of internal or external whistleblowing.

Like in the IRS program, Congress did not want to deter potential whistleblowers from coming forward based on their rudimentary understanding of a complicated money laundering scheme. AMLA whistleblowers need only have an objectively reasonable belief, even if that belief is mistaken, that they are reporting a violation of any law, rule, or regulation subject to the jurisdiction of the Department of the Treasury.

AMLA whistleblowers have 90 days to file their complaint with the Department of Labor. If the DOL fails to issue a report within 180 days, they can file a case in federal court. They have six years from the retaliatory act to file the federal court case or three years from when they become aware of the facts of the violation. This seemingly was intended to be whichever occurred last to mirror the False Claims Act qui tam provisions, but key language may have been inadvertently excluded, so the result is likely it is whichever occurs first.

Damages include reinstatement, double back pay, with interest, compensatory damages, and attorneys’ fees.

Contractor Whistleblowers

Under the National Defense Authorization Act (NDAA), 41 U.S.C. § 4712, and various federal government agency-specific statutes, employees of federal contractors have protections for reporting not just fraud, but also gross mismanagement, waste, or abuse of authority relating to government funding, or violations of law, rule, or regulation related to the contract, or substantial and specific dangers to public health or safety.

Under the NDAA, the claims must be filed with the Office of the Inspector General within 3 years of the violation. If a report is not issued within 180 days, the complainant may file a case in federal court.

Damages can include affirmative action to abate the reprisal (i.e., “cut it out”); reinstatement, back pay, compensatory damages, employment benefits, and attorneys’ fees and costs.

Fight Whistleblower Retaliation with Bracker & Marcus LLC, Your Whistleblower Attorneys

Don’t let the fear of retaliation keep you from exposing fraud. The Atlanta whistleblower attorneys at Bracker & Marcus LLC focus exclusively on False Claims Act and other qui tam litigation. Call us today for your consultation – it’s completely free and confidential.