Make Sure Disciplinary Action Doesn’t Equal Retaliation

Whistleblowers are a driving force behind many of the recent settlements with laboratories and other providers under the False Claims Act (FCA). Whistleblowers are often former employees of the settling defendant. The FCA not only rewards these whistleblowers with a share of the funds recovered in a qui tam case but also protects them from retaliation by the employers they named in their qui tam lawsuit.

Section 3730(h) protects the whistleblower from being “discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment” because he or she took action to “stop 1 or more violations” of the FCA. The FCA entitles the victim of such retaliation to reinstatement with the same status they would otherwise have, plus “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.”

But does this mean you can never take any disciplinary action against an employee who raises a compliance issue? No. The FCA prohibitions against retaliation don’t say that an employer can never take disciplinary action against an employee who has made efforts to stop FCA violations. But you must tread carefully when disciplining such employees.

Don’t impose discipline in response to or because of an employee’s actions that are protected under the FCA. Make sure your records demonstrate grounds separate and apart from the source of any compliance complaints or questions the employee has raised. In a future article, we’ll give you detailed steps you can take to help you successfully impose discipline when it is warranted, without violating the FCA’s prohibition against retaliation.