The False Claims Act is a federal law that can lead to significant awards to whistleblowers who report government contractors defrauding the federal government. Additionally, the False Claims Act prohibits an employer from retaliating against an employee whistleblower.
In 2009, the False Claims Act was amended to broaden the scope of the False Claim Act. The anti-retaliation provision now states:
(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, agent or associated others in furtherance of an action under this section or other efforts to stop 1 or more violations of this subchapter.Prior to this amendment, the “protected activity” requirement of a FCA retaliation cause of action required that an employee take some action “in furtherance” of a qui tam suit. 31 U.S.C. § 3730(h)(2008). A plaintiff engaged in protected activity when he satisfied what has been termed the “distinct possibility” standard. When Congress enacted FERA, it did so to counter perceived restrictive judicial interpretations of the protected activity prong by extending protected acts to acts “in furtherance of . . . other efforts to stop 1 or more violations of this subchapter.” 31 U.S.C. §3730(h)(1). The Maryland federal court in Layman v. Met Laboratories, Inc., reviewed the broader scope of the anti-relation as follows:
Sufficiently pleading the protected activity prong of an FCA retaliation claim is subject to a broader standard. See Brazil v. Ca. Northstate Coll. Of Pharmacy, LLC, --- F. Supp. 2d ----, 2012 WL 5289330, at *1, 6 (E.D. Cal. 2012) (holding that an employee sufficiently alleged that he engaged in protected activity when he claimed having confronted a College’s administration about its tuition practices and the possibility of civil and criminal government sanctions); United States ex rel. Moore v. Cmty. Health Servs., Inc., No. 3:09cv1127, 2012 WL 1069474, at *8 (D. Conn. Mar. 29, 2012)(holding that an employee sufficiently pled that she engaged in protected activity when she alleged having been retaliated against after having “investigat[ed] and complained to man .agement about what she perceived as fraudulent [Medicare and Medicaid] billing practices); George, 864 F. Supp. 2d at 606-07 (holding that an employee sufficiently alleged that she engaged in protected activity when she asked on two-separate occasions whether Boston Scientific’s marketing of a device could be done legally and whether the government would view it as illegal).Applying this broader standard, the Maryland federal court noted that now “courts have continued to hold that internal reporting suffices to put the employer on notice as long as the employee “specifically [told] the employer that he is concerned about fraud.” George, 864 F. Supp. 2d at 608 (citation omitted) (holding that where an employee raised questions concerning the legality of off-label marketing, she had “adequately pleaded that the defendants were on notice of her protected activity.”). Guerrero, 2012 WL 899228, at * 7 (“[A]n employee may put her employer on notice of possible False Claims Act litigation by making internal reports that alert the employer to fraudulent or illegal conduct.”). Nevertheless, the United States District Court for the District of Maine 17 has held that “[s]ince a plaintiff now engages in protected conduct whenever he engages in an effort to stop an FCA violation, the act of internal reporting itself suffices as both the effort to stop the FCA violation and the notice to the employer.” Manfield v. Alutiig Int’l Solutions, Inc., 851 F. Supp. 2d 196, 204 (D. Me. 2012). Additionally, “[t]he Fourth Circuit allows for the first and second elements to be combined …[but] consider[s] the facts known to the employee at the time of the protected activity as well as the facts known to the employer at the time of the alleged retaliation.” Dillon v. SAIC, Inc., No. 1-12-CV-390, 2013 WL 324062, at *4 (E.D. Va. Jan. 28, 2013) (citing Mann, 630 F.3d at 344). Applying this standard, the Maryland federal court found that the employee stated a claim for retaliation under the False Claims Act:
In this case, Layman has sufficiently pled that he engaged in protected activity under the statute. Additionally, he has alleged that he informed his supervisor that the test results were fraudulent and that he would not and did not sign the report. Accordingly, Layman has sufficiently pled the notice requirement.
