Whistleblower Rights and Protections
Your career, your reputation, your livelihood – a lot is at stake when you make the decision to call out fraud or other wrongdoing, to blow the whistle. Our team of dedicated whistleblower lawyers understands the challenges you face as a whistleblower. We have decades of experience helping courageous men and women navigate the complicated and daunting process of bringing whistleblower claims to a just and rewarding conclusion.
Whistleblowers are the key to exposing corporate wrongdoing and government fraud. If you have first-hand knowledge of fraud or other wrongdoing, you may have a whistleblower case.
Whistleblowers may sue on behalf of the government when they witness fraud, waste, and abuse that affects a government-funded agency or program. Whistleblowers whose cases lead to a settlement or judgment against the defendant are eligible to receive a portion of the government’s total recovery, up to 30 percent, as a whistleblower reward. There are also whistleblower protection provisions in place to assist whistleblowers who face retaliation as a result of reporting wrongdoing.
In Fiscal Year 2016, the U.S. Department of Justice reported that it recovered more than $4.7 billion in civil settlements and judgments under the False Claims Act. That was the third-highest annual recovery since the federal False Claims Act was passed during the Civil War as a measure to deter Union Army suppliers from defrauding the government and recover from those that had.
Although False Claims Act recoveries have gone down each year under the Trump Administration ($3.7 billion in 2017 and $2.8 billion in 2018), the False Claims Act remains one of the government’s best fraud-busting weapons. That’s because it allows private individuals to act as the government’s eyes and ears, calling out fraud, waste, abuse, and other wrongdoing that otherwise likely would go undetected.
Most False Claims Act cases involve fraud aimed at cheating Medicare, Medicaid, and other government health care programs. Pharmaceutical corporations, medical device companies, hospitals, nursing homes, laboratories, and physicians are some of the False Claims Act violators that most often defraud government health care programs for profit.
Apart from the health care industry, the False Claims Act also empowers private parties to sue on behalf of the government across a broad spectrum of other industries, including aerospace, defense contractors, the nuclear power industry, and manufacturers that cheat U.S. Customs by misclassifying imports to avoid paying import duties, to name a few.
Before blowing the whistle, it is very important to secure all proper and legal documentation and make sure there is a valid claim under either the federal or a state’s False Claims Act. Our highly experienced whistleblower lawyers will help you make sure your whistleblower case stands up under the False Claims Act or other appropriate anti-fraud law and we will work with you at every step in the process to guide your case to a settlement or judgment.
In addition to the False Claims Act, there is a host of other whistleblower programs established to protect those who blow the whistle on fraud:
- The Internal Revenue Service (IRS) has the IRS Whistleblower Law, designed to protect whistleblowers calling out tax fraud.
- The Securities Exchange Commission (SEC) Office of the Whistleblower was established by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 to help prevent the type of securities fraud that triggered the financial crisis of 2007-2008.
- The U.S. Commodity Futures Trading Commission’s (CFTC) whistleblower program, also established by the Dodd-Frank Act, provides monetary incentives to individuals who report possible violations of the Commodity Exchange Act.
- The Motor Vehicle Safety Whistleblower Act was passed by Congress in 2015 in response to a series of deadly automotive defects and auto industry coverups.
These whistleblower programs contain provisions that protect the privacy and confidentiality of whistleblowers while providing anti-retaliation protections that prohibit employers from lashing out at employees who report wrongdoing.
What is the False Claims Act (FCA)?
The False Claims Act (FCA) – also called the Qui Tam statute – is a federal law that was first established by Congress in 1863, authorizing everyday citizens to file lawsuits on behalf of the United States when they believe an individual or company is defrauding the government.
The False Claims Act holds liable those who knowingly submit, or cause another entity or person to submit, false claims for payment of government funds. Those found responsible for fraud are liable for three times the government’s damages plus civil penalties of $5,500 to $11,000 per false claim.
Under the “qui tam” provision of the FCA, those who choose to come forward and report the wrongdoing through an FCA lawsuit are entitled to between 15 and 30 percent of the amount recovered by the government in a settlement with or judgment against the defendant/s.
Although originally coined the “Lincoln Law” due to its beginnings in the Civil War Era, the FCA works to not only protect those who “blow the whistle” on misconduct, it also ensures that they are compensated for their time and effort.
The False Claims Act gives the U.S. an opportunity to investigate claims filed on its behalf. If the U.S. government chooses to “intervene” in an FCA case, effectively taking over in the litigation, the whistleblower will be rewarded between 15-25 percent of any judgment or settlement the case brings.
If the U.S. declines to intervene, the whistleblower can still proceed with the lawsuit. False Claims Act cases unsupported by the government that result in a judgment or settlement have higher awards for whistleblowers – up to 30 percent.
In addition to the federal False Claims Act, many states also have False Claims Acts that work in a similar fashion.
Congress strengthened the False Claims Act in 1986 with an amendment that increased incentives for potential informants to blow the whistle on false claims on the government’s behalf.
False Claims Act settlements and judgments returned $2.8 billion to federal agencies and programs in fiscal year 2018, with more than 89 percent of the recoveries coming from cases involving health care fraud, according to the U.S. Department of Justice (DOJ).
Of the $2.8 billion in recoveries in 2018, nearly 75 percent of them – more than $2.1 billion – were qui tam cases initiated by whistleblowers who witnessed fraud or other wrongdoing and chose to file suit on behalf of the U.S. government.
Total awards paid to whistleblowers whose FCA cases resulted in a recovery amounted to $301 million collectively in 2018.
There also is a part of the False Claims Act that is known as the whistleblower protection provision. This provision ensures that if you are fired, demoted, suspended, threatened or discriminated against in any other way by an employer as a result of your filing a report of fraud, that you may be reinstated to your former position. This includes receiving any seniority that may have been lost, as well as back pay, interest and other compensation lost as a result of your whistleblower actions.
Additionally, the Whistleblower Protection Act of 1989 is a federal law that protects federal whistleblowers who work for the government and report misconduct within their ranks. Under the law, federal employers are forbidden from retaliating against employees who file complaints. Federal employees may file a complaint about matters involving violation of a law, rule or regulation; gross mismanagement; gross waste of funds; abuse of authority; or substantial and specific danger to public health or safety.
Before Blowing the Whistle
Before you report suspected fraud or other wrongdoing – before you “blow the whistle” – it is important to make sure you have a valid claim and that you are prepared for what lies ahead. Here are some things to consider:
- Be hands-on – A whistleblower must have first-hand knowledge of the fraud or other wrongdoing in order to file a claim. It is important to have physical evidence such as documents, emails, invoices, billing statements or other materials that support your allegations. These materials must be things the whistleblower collected from the employer, organization or entity. They cannot be public records or information from another source.
- Be specific – Identify the “who, what, when and where” of the fraud. Organize your information and, if possible, create a timeline for the fraudulent conduct. You will be required to explain why the conduct is fraudulent. As an employee familiar with your company’s procedures and industry standards for those procedures, you are uniquely qualified to spot fraud where others may miss it or assume it is a standard business practice.
- Verify criteria – In order to file a federal False Claims Act, the fraud must be committed against the U.S. Government; in other words, U.S taxpayers. You may also file a state False Claims Act provided your state has one if state funds are affected by the fraud.
- Determine motive – The fraud must have been committed willingly and deliberately. Mismanagement is not a cause for a whistleblower claim.
- Check yourself – If you are a government employee who witnesses fraud against the government, you may need to first make an effort to report the fraud through channels within your agency before filing a whistleblower lawsuit. Talk to an attorney to determine if you should take this course.
- Talk to a whistleblower lawyer – An experienced whistleblower lawyer is an important ally in bringing wrongdoers to justice. It is advisable to talk to an experienced whistleblower lawyer before filing any claim or reporting the wrongdoing. A whistleblower lawyer will be able to help you navigate a potential claim and guide you through what is often a long process. Although your information will initially be kept confidential, you will eventually be identified as the whistleblower. Your lawyer can help you obtain whistleblower protections available under the False Claims Act. Taxpayers Against Fraud (TAF) has created this helpful video to illustrate what may be involved in filing a whistleblower lawsuit.
Types of Whistleblowers
Many people are familiar with some of the whistleblowers whose high-profile cases have garnered international attention — Jeffrey Wigand, Mark Felt, Harry Markopolos, Karen Silkwood, and Edward Snowden, to name a few. But most whistleblowers fight a less public battle, and many even remain anonymous.
Yet that doesn’t mean their actions are any less valuable. Whistleblowers serve as the eyes and ears for the detection of wrongdoing, given the government’s limited resources and inability to effectively oversee the internal operations of every private enterprise and public entity.
Whistleblowers can sound the alarm in just about any industry, but their role is especially critical and prevalent in sectors where fraud, waste, abuse, and other wrongdoing result in high financial gains or pose serious risks to public health and safety.
- Health Care Fraud: Hospitals, clinics, pharmaceutical corporations; individual physicians, and other health care providers often target government health care programs with fraudulent billing schemes, illegal kickback and self-referral arrangements, off-label drug marketing, and other fraud that costs taxpayers billions of dollars every year.
- IRS Whistleblower: Whistleblowers who provide specific and credible information to the IRS about a non-compliant taxpayer may be entitled to an award if their tips result in the collection of taxes, penalties, or interest.
- SEC Whistleblower: In 2010, Congress established the SEC’s Office of the Whistleblower in response to the rampant financial and securities fraud that contributed to the 2008-2009 financial crisis.
- Auto Manufacturing Whistleblower: Whistleblowers in the auto industry are protected by the Moving Ahead for Progress in the 21st Century Act (MAP-21). OSHA enacted the law in 2012 to address the growing need to protect auto industry workers who call out misconduct and violations that jeopardize auto safety and the lives of motorists.
- Aerospace Whistleblower: Aerospace industry workers who witness fraud for financial gain or violations that threaten the safe operation of civil, military and business aircraft, helicopters, unmanned aircraft systems, space systems, aircraft engines, missiles, material and equipment, and other related technology, may have a valid whistleblower case.
- Defense Contractor Whistleblower: Whistleblowers who call out individuals or companies defrauding the U.S. government/U.S. Department of Defense are indispensable not just for the taxpayer but for the safety and wellbeing of U.S. servicemembers.
- Nuclear Power Whistleblower: Security and safety in the nuclear power industry cannot be overestimated. Whistleblowers who detect any misconduct at any level within the nuclear industry deserve the strongest protections possible under the law.
State False Claims Act
The federal False Claims Act is one of the U.S. government’s best fraud-busting weapons, and many states have similar laws to shield taxpayer-funded state-operated agencies and programs from harmful misconduct. Not all states have a False Claims Act, and not all State FCAs encompass all types of fraud. For example, some state FCAs are used only to identify and prosecute Medicaid fraud. If you are employed in a state without a state FCA or if your state’s FCA doesn’t encompass other types of fraud, we urge you to talk with one of our experienced whistleblower lawyers about your options for filing as a relator under the qui tam provisions of the federal False Claims Act.
Find out if your state has an FCA and what it covers by visiting our States False Claims page.
Experienced whistleblower lawyers are important allies in bringing wrongdoers to justice. It is advisable to talk to an experienced whistleblower lawyer before filing any claim or reporting the wrongdoing. Beasley Allen has a talented team of whistleblower lawyers dedicated to pursuing whistleblower cases. We would like to meet with you CONFIDENTIALLY to review your potential whistleblower claim.