Excerpt: Saints, Sinners & Heroes by Brian Mahany

Introduction to Whistleblower Protections

Thus far we have discussed how whistleblowers are often subject to retaliation. Some of the stories shared in the prior chapter were quite extreme and even gruesome. Thankfully, most retaliation efforts fail, but that doesn’t stop a few wrongdoers from some type of ham-handed intimidation or retaliation attempt. This section of the book examines the many federal protections available to whistleblowers.

Chapter Thirty Nine

False Claims Act Protections

Section 31 U.S.C. §3730(h) of the False Claims Act prohibits retaliation against whistleblowers. That sections reads:

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.
  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.
  3. Limitation on bringing civil action. — A civil action under this subsection may not be brought more than 3 years after the date when the retaliation occurred.

Although only three paragraphs in length, there are thousands of pages of regulations, rules and court decision interpreting these words. The quick take-away is that Congress takes a very dim view of whistleblower retaliation. Thankfully, courts have largely been supportive of whistleblowers.

It’s important to know that there is no requirement to actually file a FCA lawsuit to benefit from the Act’s protections.

Employers that are accused of retaliating against their workers often argue that employees shouldn’t be protected unless they first file a lawsuit. Of course, history tells us the overwhelming number of whistleblowers try to address the wrongdoing first within the company. Only when they are rebuffed – or worse, fired, do they seek legal counsel.

Bad employers think they can intimidate workers and silence them before they file a lawsuit. In fact, recent legislative proposals by the U.S. Chamber of Commerce want to force whistleblowers to report internally and then wait 180 days before being allowed to file a formal claim.

Why? Because the anti-whistleblower protections are weaker before a lawsuit is actually filed. Weaker, but not non-existent. The law actually does not require a whistleblower to first file a lawsuit before gaining protection. Instead, the law requires that the person (whistleblower) seeking protection need only take a “lawful act” in furtherance of his or her claim.

What is a “lawful act in furtherance of an action”? It can simply be investigating a possible claim or hiring a lawyer to explore filing a False Claims Act suit.

Case Study – Walgreens American Hero: Mervat Mikhaeil

In 2015, a Federal judge detailed just how far courts are willing to go to protect whistleblowers. Our hero, Mervat Mikhaeil, was hired by Walgreens as a pharmacist in July of 2012. Several months later, she was transferred to a retail pharmacy in West Bloomfield, Michigan.

Almost immediately after her transfer, Mikhaeil had a rough time interacting with the store’s pharmacy manager. In June of 2013, Mikhaeil reported the manager was illegally dispensing Schedule II narcotics and possibly defrauding Medicare.

Like many companies, Walgreens has an internal hotline for reporting compliance issues. Called STARS, Walgreens’ hotline is actually an electronic reporting system designed to track prescription issues. Mikhaeil never reported her concerns to STARS, however, because she claims that she was ordered by her manager not to report and threatened with “dire consequences” if she did. Instead of using STARS, Mikhaeil took pictures of examples of some of the problem prescriptions and sent them to management.

Instead of being thanked for coming forward and reporting possible Medicare fraud violations, Mikhaeil was suspended. A couple of weeks later she was terminated on what she believes were simply trumped up charges regarding a HIPPA violation by using her personal email to send the photos to management.

Not satisfied with the explanation of her termination, Mikhaeil sought counsel and filed an anti-retaliation claim under the False Claims Act. At no time did she file a False Claims Act lawsuit or even tell Walgreens she intended on doing so.

Walgreens sought to dismiss her retaliation claim because she was not a whistleblower. The judge disagreed. In a written ruling, the court noted that although a mere allegation of misconduct is not enough to trigger the anti-retaliation provisions of the law, Mikhaeil met the standard when her complaints to management implicated federal funds.

Since some of the allegations mentioned the federal Medicare program, her complaints to management triggered the anti-retaliation clause of the Act. In siding with the whistleblower, the court said that Mikhaeil’s complaints went beyond mere general allegations of misconduct.

It didn’t matter that her complaints were unfounded nor did it matter that Mikhaeil never told her supervisors that she was contemplating a False Claims Act filing. The mere fact that she reasonably believed there was a violation and took further actions on that belief was enough.

Mervat Mikhaeil isn’t an isolated case. There are dozens of other False Claims Act anti-retaliation decisions.

As of this writing, the courts require whistleblowers to satisfy four elements when seeking relief or damages for retaliation. Those requirements are:

  • The whistleblower was engaged in a protected activity;
  • The employer had notice of the whistleblower’s activity;
  • The employer had actual notice or implicit knowledge that the activity could result in an FCA claim; and
  • The whistleblower must show that the retaliation was the result of the protected activity.

Understandably, these concepts can be difficult for a layperson to grasp. Even lawyers and experienced human resources (HR) professionals grapple with these requirements. An easy way to think about this is as follows:

Am I investigating wrongdoing within my organization?

If so, does my employer know what I am doing?

Assuming they do, have I told my supervisor or the company that their activities are illegal or is it obvious that my concerns relate to government programs or contracts?

Finally, did I suffer retaliation because I stepped forward and complained about wrongdoing?

If you can answer “yes” to all of these questions, you probably have a whistleblower retaliation claim.

The remedies under the act are substantial. Courts can order reinstatement, double back pay and attorneys’ fees.

Few whistleblowers want to return to their old job. However, the courts can force an employer to take back an employee wrongfully terminated or demoted. The reinstatement remedies include the right to retroactive seniority and reinstatement of any bonuses missed while the whistleblower was on leave or wrongly terminated.

Today, the majority of larger companies don’t terminate whistleblowers. Typically their duties are modified or they are placed on paid administrative leave.

Chapter Forty

Advice to Potential Whistleblowers

Although the False Claims Act has very powerful anti-retaliation remedies, the law is not preemptive. Retaliation is illegal but the law can’t stop an employer from terminating you, taking away bonuses or exiling you to some distant worksite. If the employer violates the law, you can get damages but that sometimes takes time.

We warn our clients about retaliation because when it occurs, it is often unexpected. If you are escorted out the door, obtaining emails and evidence to back your retaliation claim may become impossible. For this reason, we suggest that you document everything and never from your work computer!

What should you document?

In addition to documentation surrounding the possible False Claims Act violation, be sure to document any complaints you made to management about wrongdoing by the company. If anyone has expressed concerns about your investigation or findings or ordered you to stop, take notes of that as well. Also be wary if you suddenly receive unjustified negative performance reviews or if your employer takes away sensitive assignments or bonus/growth opportunities.

End of Excerpt

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