Source: https://www.zuckermanlaw.com/sp_faq/whistleblowing-protected-false-claims-act-anti-retaliation-provision/
Timestamp: 2019-08-19 02:40:28
Document Index: 574943745

Matched Legal Cases: ['§ 3730', '§ 3730', '§ 3730', '§3730', '§ 3730', '§ 3730']

What whistleblowing is protected under the False Claims Act anti-retaliation provision? - Zuckerman Law
Home > What whistleblowing is protected under the False Claims Act anti-retaliation provision?
Due to relatively recent amendments to the anti-retaliation provision of the False Claims Act (“FCA”), courts are increasingly broadening their view of what constitutes protected activity under the FCA. In 2009, Congress passed the Fraud Enforcement and Recovery Act of 2009 (“FERA”). Before the amendment, the FCA protected only “lawful acts done by the employee on behalf of the employee or others in furtherance of [a qui tam action], including investigation for, initiation of, testimony for, or assistance in an action filed or to be filed under this section.”
Now, the FCA protects “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.” 31 U.S.C. § 3730(h)(1). And a series of recent decisions have shown the broad latitude courts are willing to give employees under the newly amended FCA. The cases demonstrate that the FCA’s whistleblower retaliation provision protects:
internal reporting of fraudulent activity to a supervisor;
claims where the subject of the plaintiff’s disclosures would not necessarily have supported a full qui tam;
steps taken in furtherance of a potential or actual qui tam action; and
steps taken to remedy fraudulent activity or to stop an FCA violation.
To learn more about False Claims Act whistleblower protection, see our answers to frequently asked questions about the False Claims Act whistleblower protection law.
Examples of False Claims Act Protected Whistleblowing/Protected Conduct
In United States ex rel. Lee v. Northern Adult Daily Health Care Center, No. 13-CV-4933-MKB, 2016 WL 4703653 (E.D.N.Y. Sept. 7, 2016), former employees of Northern Adult Daily Health Care Center, a day-care center for elderly and low-income people, alleged that Northern Adult retaliated against them for their complaints about several deficiencies, including Northern Adult’s unsanitary handling of food, lack of training for food-service staff, provision of alcohol to registrants, failure to provide physical therapy to residents, and disparately poor treatment of Black and Latino residents. Northern Adult took several retaliatory actions against the whistleblowers, including terminating their employment, for their attempts to stop the perceived fraud. In denying Northern Adult’s motion to dismiss, the court clarified that a plaintiff need not plead an FCA retaliation claim with particularity because no showing of fraud is required. Id. at *5–6. The FCA protects conduct including “lawful acts done by the employee . . . in furtherance of an action under the FCA,” as well as “other efforts to stop one or more violations of the FCA.” Id. at *13. Furthermore, complaining of regulatory violations may qualify as an “effort[] to stop 1 or more violations” under the 2009 amendments to the FCA. Id. at *14. Such efforts to stop a violation of the FCA are protected “even if the employee’s actions were not necessary in furtherance of an FCA claim.” Id. at *13 (quoting Malanga v. N.Y.U. Langone Med. Ctr., No. 14-CV-9681, 2015 WL 7019819, at *2 (S.D.N.Y. Nov. 12, 2015)). And finally, temporal proximity of less than five months is sufficient to plead causation. Id. at *15.
In Marbury v. Talladega College, Andrea Marbury sued her former employer, Talladega College, under the FCA’s whistleblower protection provision. Marbury v. Talladega Coll., No. 1:11-cv-03251-JEO, 2014 WL 234667 (N.D. Ala. Jan. 22, 2014). Marbury alleged that Talladega terminated her employment because she opposed requests to allocate Title III funds to advertising expenses, which is an unlawful use of Title III funds. Talladega argued that Marbury did not engage in protected conduct under the FCA because she never took any concrete steps toward bringing a qui tam action, could not point to a specific false claim that Talladega had submitted to the government, and made only internal complaints to her supervisor rather than filing a formal grievance or initiating a qui tam action.
The court rejected Talladega’s narrow construction of the FCA’s whistleblower protection provision. Marbury’s internal opposition to using Title III funds for advertising and her refusal to complete requisition forms for unauthorized uses of Title III funds, the court found, could qualify as protected whistleblowing. See id. at *8. The court also rejected Talladega’s argument that Marbury could not be deemed to have engaged in protected conduct because she failed to show that Title III funds were misapplied. The court noted that the whistleblower-protection provision of the FCA does not require a showing that federal funds actually were expended for an unlawful purpose—after all, the whistleblower protection provision is “intended to prevent the filing of false claims and to discourage fraud.” Id. at *10. Had the court adopted Talladega’s argument, employees who stick their necks out to stop fraud would not be protected against reprisal.
In Mikhaeil v. Walgreens Inc., plaintiff Mervat Mikhaeil worked as a staff pharmacist at Walgreens in July 2012, and she alleged that her employment was terminated for raising concerns about potential Medicare fraud. Mikhaeil v. Walgreens Inc., No. 13-14107, 2015 WL 778179 (E.D. Mich. Feb. 24, 2015). Walgreens moved for summary judgment, and, in an opinion denying the motion in part, Judge Edmunds held that the FCA’s current retaliation provision “now protects two categories of conduct”: lawful acts taken in furtherance of an action under the FCA, and “other efforts to stop violations of the Act, such as reporting suspected misconduct to internal supervisors.” Id. at *7 (internal quotations and citations omitted). The “other efforts” language, the judge observed, explicitly encompasses internal reporting, which therefore constitutes protected conduct. Id. Mikhaeil told her supervisor the specific prescription numbers that she was concerned about, she testified. And so her disclosure about potential Medicare fraud was sufficiently specific to constitute an internal report alleging fraud on the government. Id. at *8.
In Young v. CHS Middle East, LLC, a husband-and-wife team of surgical nurses, who were working at a hospital in Iraq that ran on a State Department contract, made numerous complaints that the staffing levels on the installation were leading to employees’ taking on assignments for which they were neither trained nor credentialed, in violation of CHS’s contract with the State Department. Young v. CHS Middle E., LLC, 611 Fed. App’x 130 (4th Cir. May 27, 2015). After the Youngs lodged several complaints with their supervisors, company executives, and a State Department official, CHS terminated them both. The trial court granted CHS’s motion to dismiss, holding that the Youngs’ complaints about staffing did not amount to contract fraud and, therefore, were not protected by the FCA. The Youngs appealed.
While the Youngs’ appeal pended, the Fourth Circuit decided a key case involving FCA qui tam fraud claims. In Badr v. Triple Canopy, Inc., the government alleged that a security contractor responsible for base security in a combat zone had knowingly hired guards who were unable to pass contractually required marksmanship tests, yet presented claims to the government for payment on those unqualified guards. United States ex rel. Omar Badr v. Triple Canopy, Inc., 775 F.3d 628, 632–33 (4th Cir. 2015). The Fourth Circuit reversed the trial court’s dismissal of the claim, holding that a plaintiff successfully “pleads a false claim when it alleges that the contractor, with the requisite scienter, made a request for payment under a contract and ‘withheld information about its noncompliance with material contractual requirements.’” Id. at 636 (quoting United States v. Sci. Applications Intern. Corp., 626 F.3d 1257, 1269 (D.C. Cir. 2010)).
Applying that logic in Young, the Fourth Circuit reasoned that “if making false implied staffing certifications to the government can constitute a False Claims Act violation, acts undertaken to, for example, investigate, stop, or bring an action regarding such false implied staffing certifications can constitute protected activity for purposes of a retaliation claim.” Young, 611 Fed. App’x at 133. The Fourth Circuit, therefore, reversed the trial court’s dismissal of the Youngs’ claim, noting that the FCA whistleblower provision, as amended, “protect[s] employees while they are collecting information about a possible fraud, before they have put all the pieces of the puzzle together.” Id. at 132 (alteration in original) (citation omitted).
In Ickes v. NexCare Health Systems, L.L.C., Joanne Ickes, a licensed physical therapist of nearly 30 years, was hired by Integrity Rehab Services (“Integrity”) to provide physical therapy services at defendant South Lyon Senior Care and Rehab Center (“South Lyon”) in Michigan. Ickes v. NexCare Health Sys., L.L.C., No. 13-14260, 2016 WL 1275543 (E.D. Mich. Mar. 31, 2016). South Lyon received management services from defendant NexCare Health Systems, L.L.C. (“NexCare”), which was responsible for ensuring the nursing home’s compliance with federal laws and regulations. Everyone who worked at South Lyon, whether employed by South Lyon, Integrity, or NexCare, was covered by NexCare’s compliance program, under which employees could report violations to South Lyon’s administrator.
Ickes discovered that South Lyon employees were routinely telling patients that there were no long-term beds available for them. That is because Medicare Part A covered only short-term care (i.e., up to 100 days), and it paid more than Medicaid, which covered long-term care. The practice of denying long-term beds to patients was prohibited because South Lyon’s beds were “dual-certified,” meaning that “once a patient was admitted to a bed, that patient could not be told that South Lyon did not have space to continue to accommodate the patient for a long-term stay.” However, this practice abounded under a South Lyon administrator whose goal it was to maintain fifty percent of the beds as short-term. After consulting an elder-law attorney, Ickes met with Integrity’s president and chief operating officer and reported the nursing home’s unlawful practice. Ickes followed up several times with the president/COO and reported her concerns to her supervisor, the county ombudswoman, the South Lyon administrator, Integrity’s HR representative, and NexCare’s HR director. The unlawful practice ceased, but only for several months. Patients began telling Ickes and another physical therapist that they had been told that no long-term beds were available. At this point, Ickes and her colleague told their patients to “push back” because long-term beds were available and it was their right to stay. The South Lyon administrator called an emergency meeting with all physical therapists, at which she irately told them not to meddle in discharge decisions. But Ickes raised her concerns again, this time in front of the other physical therapists at the meeting. The South Lyon administrator emailed the president/COO of Integrity afterward to tell her that Ickes had been insubordinate. Ickes was subsequently suspended with pay, and, when she said she would continue to inform patients of their rights, she was terminated. Ickes filed suit against NexCare and South Lyon alleging, in part, retaliation in violation of the FCA.
Defendants NexCare and South Lyon argued that Ickes did not engage in protected conduct for two reasons: (1) “violations of patient transfer and discharge rules . . . are violations of a condition of participation not payment,” and (2) “Plaintiff did not have a good-faith basis for her concerns.” Id. at *11. The court rejected the first argument, stating in relevant part that “[t]he Act protects an employee who is punished for his or her ‘efforts to stop’ violations of the FCA; its protection is not limited to only those employees whose complaints turn out to prove a violation of the FCA by a preponderance of the evidence.” Id. at *12. The plaintiff’s raising the long-term-beds issue with her supervisors constituted attempts to stop the nursing home from violating the FCA by improperly discharging patients once Medicare Part A ceased to cover their therapy. The court similarly rejected the defendants’ second argument, finding that Ickes clearly had a good-faith basis for her concerns given that the existence of the unlawful practice was confirmed by other therapists and patients, and Ickes spoke to an elder-law attorney and her county ombudswoman to confirm that the practice was unlawful.
Note that the whistleblower protection provision of the False Claims Act (FCA) protects “lawful acts done by the employee, contractor, agent or associated others in furtherance of an action under [the FCA] or other efforts to stop 1 or more violations of [the FCA].” Recently the Fourth Circuit held in O’Hara v. Nika Technologies, Inc., 2017— F.3d —-2017 WL 6542675 (4th Cir. Dec. 22, 2017):
The plain language of § 3730(h) reveals that the statute does not condition protection on the employment relationship between a whistleblower and the subject of his disclosures. Section 3730(h) protects a whistleblower from retaliation for “lawful acts done … in furtherance of an action under this section.” 31U.S.C. § 3730(h)(1). The phrase “an action under this section” refers to a lawsuit under §3730(b), which in turn states that “[a] person may bring a civil action for a violation of [the FCA].” Id. § 3730(b)(1). Therefore, § 3730(h) protects lawful acts in furtherance of an FCA action. This language indicates that protection under the statute depends on the type of conduct that the whistleblower discloses—i.e., a violation of the FCA—rather than the whistleblower’s relationship to the subject of his disclosures.
Refusal to Violate the False Claims Act is Protected Whistleblowing
The Second Circuit recently held in Fabula v. American Medical Response, Inc. that refusal to play a role in an unlawful scheme to defraud the government is protected under the whistleblower protection provision of the False Claims Act. In particular, refusal to falsify documentation about medical services so as to hinder the filing of a fraudulent claim for reimbursement in violation of the FCA constitutes FCA protected activity.
Guide to NDAA/Defense Contractor Whistleblower Protection Law
Damages in False Claims Act and NDAA Whistleblower Retaliation Cases
Experienced and Effective False Claims Act and NDAA Whistleblower Protection Attorneys
Our experience includes litigating False Claims Act retaliation claims in federal court and representing whistleblowers in NDAA retaliation claims before the Department of Defense, and Department of Homeland Security, Department of Justice Offices of Inspectors General.
Eric Bachman served as Deputy Special Counsel, Litigation and Legal Affairs at the U.S. Office of Special Counsel, where he spearheaded an initiative to combat whistleblower retaliation at the Department of Veterans Affairs. During Bachman’s tenure at OSC, the number of favorable actions for whistleblowers increased by over 50% agency-wide.
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