The False Claims Act (Act) allows private citizens (through a qui tam suit) and the Department of Justice to pursue actions against parties attempting to defraud the government. Over the past 10 years, there has been a dramatic increase in the number of lawsuits filed under the Act, which, in turn, has led to an increase in the number of retaliation claims filed by whistleblowers. Given the recent history of this litigation and the available damages, this trend will likely continue. The Act expressly prohibits retaliation against whistleblowing employees:
Any employee who is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against … because of lawful acts done by the employee … in furtherance of an action under this section … shall be entitled to all relief necessary to make the employee whole.
31 U.S.C. §3730(h). In order to succeed on a retaliation claim, a plaintiff generally must prove that: (1) she was engaged in protected activity; (2) she suffered adverse employment action; and (3) a nexus exists between the protected activity and the adverse action.
Several recent cases have addressed the "protected activity" element. In McKenzie v. BellSouth Telecommunications (6th Cir. 2000), the Sixth Circuit affirmed the dismissal of a retaliatory discharge claim, rejecting the employee’s argument that she had engaged in conduct in furtherance of a qui tam suit. The court held that Section 3730(h) required "more than merely reporting wrongdoing to supervisors." Other courts have applied a somewhat looser standard, finding, for example, that internal investigations and complaints may constitute protected activity if litigation is a distinct possibility. Neal v. Honeywell (7th Cir. 1994).
Employers who unlawfully retaliate are exposed to substantial damages. Available remedies under Section 3730(h) include reinstatement with credited seniority, double back pay, interest, and compensation for "special damages," including costs and attorneys’ fees. While courts have interpreted "special damages" to include emotional distress damages, Hammond v. Northland Counseling Ctr. (8th Cir. 2000), they have not interpreted this phrase to include a separate punitive damages award. Neal v. Honeywell, 995 F.Supp. 889 (7th Cir. 1999).
Whistleblower retaliation claims can be difficult to defeat through pre-trial dispositive motions, as the employer’s motivation is often a major focus. Employers must be prepared to articulate and substantiate legitimate, nonretaliatory reasons for their decisions. Employers should ask the following questions before taking adverse employment action against employees who may have engaged in protected activity under the Act. Are there objective reasons for the adverse action? Would the same action be taken if the employee had not blown the whistle? Is there any record of non-whistleblowing employees being treated the same way following similar conduct? Does the employer’s work environment (as exhibited through policies and training) encourage legitimate complaints and discourage retaliation following such complaints? If the answer to each of these questions is "Yes," the employer will be in a strong position to defend against potential retaliation claims.
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