General Whistleblowing Information and Guidance
Whistleblowing or “Qui Tam” is a complex and evolving area of law based on statutes and cases. Filing a whistleblowing claim by the right, experienced attorney can make all the difference. Please see our knowledge area below as well as helpful information and tips about the different types of claims and processes that must be considered and carefully followed. You may also call us at (877) 789-9707 or complete the online Form at https://www.employmentattorneyca.com/contact-us/ for a complimentary consultation to discuss your possible whistleblower claim, or if you suffered retaliation based on your reporting of illegal acts at your workplace.
Most of the whistleblowers that contact our office inadvertently uncover evidence of employer unlawful conduct. Then, they disclose the misconduct to their supervisors. However, those supervisors may be complicit in the wrongdoing and no action is taken. In addition, those whistleblowers are sometimes disciplined for this protected activity as a pretext (or false reason) to keep them quiet. Sadly, some whistleblowers are even terminated for reporting or participating in investigations.
Our experienced attorneys are there to guide you in how to confidentially and methodically blow the whistle on corporate fraud. We advise on evidence collection, steps to protect themselves, and how to hold their employers liable for retaliation. Consequently, careful and detailed guidance has led to client whistleblowers’ recovery of sizeable monetary incentive payments either through government intervention of decision not to intervene. If the government decides not to pursue the whistleblowing report (also called decline), our attorneys find ways to ensure that the whistleblowers are protected and reach confidential settlements. This occurs in the majority of the cases, and the relator whistleblower’s share is 20-25 percent of the government’s settlement or verdict monetary recovery. If the government decides to intervene and litigate the case (which occurs approximately 20% of the time), the relator whistleblower’s share is 15-20 percent of the government’s settlement or verdict monetary recovery.
Anti-retaliation protection laws
At the same time, our attorneys are knowledgeable in anti-retaliation protection laws. Even if the whistleblower claims are unfounded, the company may still be found in violation of these anti-retaliation provisions. Whistleblower retaliation claims stand on their own as long as they are brought forth meticulously. Having years of experience and resources creates the breadth that is needed for both maximizing the use of the whistleblower reward programs and knowing when to use whistleblower anti-retaliation protection.
Please note, due to the constantly changing landscape of whistleblower litigation, it is vital that the attorney representing you in your claim has current knowledge of the key laws, processes and developments in government whistleblower programs and anti-retaliation laws and cases. Attorneys should have knowledge of the whistleblower reward programs administered by such government programs as the Securities and Exchange Commission (“SEC”), the Commodity Futures Trading Commission (“CFTC”), the Internal Revenue Service (“IRS”), and the Occupational Safety and Health Administration (“OSHA”). The common denominator between these whistleblower rewards programs is that they incentivize whistleblowers for reporting violations of government laws. Such reports must be carefully brought and the appropriate amount of detail must be supplied to ensure the strongest case is brought to the government.
It is our goal to inform our clients and those perusing our site of the federal and state laws enabling them to establish their cases while also protecting the whistleblowers from retaliation in the workplace.
The relevant laws
The myriad of laws that are violated include Medicare, Medicaid (or Medi-Cal in California), False Claims Act (“FCA”) and its Anti-Retaliation Provision 3730(h), Sarbanes-Oxley Act (“SOX”) and its Anti-Retaliation Section 806, Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) (Pub. L. No. 111-203, 124 Stat. 1376 (2010)), Internal Revenue Code (as enforced through the Internal Revenue Service’s Whistleblower Office Informant Claims Program), Consumer Financial Protection Act (“CFPA”), Occupational Safety and Health Administration (“OSHA”) (as enforced by the OSHA Whistleblower Protection Program, National Defense Authorization Act (sections 827 and 828 whistleblower protections), Whistleblower Protection Act (“WPA”), California False Claims Act, and California’s Private Attorney General Act (“PAGA”)
Examples or recoveries
Recent examples of large whistleblower rewards resulted from healthcare fraud, tax underpayment, bank, credit, and financial institutions fraud, commodities (agriculture, metals) fraud, and securities fraud. Such fraud is often committed by contractors or companies against the government. As such, our attorneys assist the whistleblowers in filing the qui tam lawsuits (confidentially) on behalf of the government. The lawsuits are typically to recover money that has either been overpaid to the contractor or company by the government either through active actions (fraud) or inaction (knowing that the money was erroneously overpaid but not repaid.
Our whistleblower lawyers guide our clients every step of the way to ensure maximum recovery of the whistleblower reward. They also ensure the vigorous defense to any corporate retaliation against the whistleblowing reporter. Examples of our recent recoveries have been a $3.5 million settlement against a hospital in the Central Valley of California for Medicare fraud, $66 million against a one-location hospital for billing related issues, and $500 million against a major energy producer for violations related to environmental contamination.
Our firm is routinely retained by other leading qui tam attorneys and law firms to represent their clients with regard to their individual retaliation claims. There are different rules and time periods for retaliation claims and these must be protected.
Top 10 Most Common Whistleblower Statutes Empowering California Workers
- False Claims Act (“FCA”) and its Anti-Retaliation Provision 3730(h)
- Sarbanes-Oxley Act (“SOX”) and its Anti-Retaliation Section 806
- Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”)
(Pub. L. No. 111-203, 124 Stat. 1376 (2010))
- Internal Revenue Service (“IRS”) Internal Revenue Code (“IRC”) (Whistleblower Office Informant Claims Program)
- Consumer Financial Protection Act (“CFPA”)
- Occupational Safety and Health Administration (“OSHA”) (Whistleblower Protection Program)
- National Defense Authorization Act (“WDAA”) (sections 827 and 828 whistleblower protections)
- Whistleblower Protection Act (“WPA”)
- California False Claims Act
- California’s Private Attorney General Act (“PAGA”)
In Detail – Most Common Whistleblower Statutes Empowering California Workers
- False Claims Act (“FCA”): prohibits fraud on the federal government and protects whistleblower employees who reasonably believe a company that financially defrauded the government. In recent years, the FCA’s anti-retaliation provisions have been amended to expand the scope of protection. Accordingly, courts are expanding the protection by interpreting these amendments and clarifying what constitutes “protected activity” under the FCA.
- Since the passage of the Fraud Enforcement and Recovery Act in 2009, the FCA protects not only the employee but also the contractor, agent or others associated who report company violations of fraud against the government.
- Whistleblower Anti-Retaliation Cases protect:
- internal reporting of fraudulent activity to a supervisor and the government;
- actions taken to advance potential or actual qui tam actions; and
- steps toward mitigating or stopping fraudulent actions or FCA violations.
- Sarbanes-Oxley Act (“SOX”): Since 2002, SOX has been holding publicly-traded companies liable by preventing their accounting fraud. SOX’s section 806 prohibits covered employers from taking adverse actions in employment retaliation against covered workers because the worker lawfully engaged in protected activity such as reporting a violation or assisted in the SEC’s investigation of a violation.
- To prevail on a SOX whistleblower claim, an employee must show: (1) that he/she engaged in protected activity, and (2) the protected activity was a contributing factor in the employer’s decision to take adverse employment action against the employee.
- If you reasonably believe that the employer’s conduct constituted a violation of laws and reported it (even to anyone in the company with supervisory authority over you), then that is enough to constitute a SOX protected activity.
- Whistleblowers are entitled to an award between 10% and 30% of the financial sanctions that the SEC collects through government actions.
- To submit a whistleblower tip, contact our attorneys as the tip must comply with certain requirements to qualify for an award. (17 C.F.R. 240.21F-1 et seq.)
- Since the beginning of the SEC Whistleblower Program in 2011, it has awarded more than $67 million to 29 whistleblowers.
- Dodd-Frank Act Created the SEC Whistleblower Program: In 2010, Dodd-Frank Act established the SEC’s whistleblower program. The Office of the Whistleblower (“OWB”) manages whistleblower claims, reviews restrictive agreements, monitors anti-retaliation protections, and rewards whistleblowers who report violations of federal securities laws to the SEC.
- Most recently, the OWB focused on protecting whistleblowers from retaliation and companies’ use of confidentiality and severance agreements to limit individuals’ ability to report violations to the SEC (Rule 21F-17(a).)
- No employer may impede an individual from communicating directly with the U.S. Securities and Exchange Commission (“SEC”) about securities law violations.
- The most consequential case in California for whistleblowers in 2018 was the Digital Realty In this case, the U.S. Supreme Court held that a whistleblower must report information pertaining to a securities law violation to the SEC instead of merely reporting it internally, to have a claim under Dodd-Frank’s whistleblower protection. (Digital Realty Trust, Inc. v. Somers, No. 10-1276 583 U.S. (Feb. 21, 2018).)
- In 2017, the SEC awarded $50 million to twelve individuals, and since 2012, it has awarded $179 million to fifty whistleblowers, as part of the Dodd-Frank Whistleblower Program.
- IRS Whistleblower Office: Consistently pays awards to California whistleblowers that blow the whistle on entities that fail to pay the tax owed. If the IRS uses information provided by a whistleblower, it can award the whistleblower up to 30 percent of the additional tax, penalty and other amounts it collects.
- Authority to pay awards is at the discretion of the Secretary under Internal Revenue Code (“IRC”) 7623(a) and 7623(b)
- IRC Section 7623(a) – Informant Claims Program
- IRC Section 7623(b) – Whistleblower Rules
- Consumer Financial Protection Act (“CFPA”): The CFPA applies to workers in the consumer financial product and service industries by protecting them from retaliation for reporting violations of the CFPA or any other provision of law that is subject to the jurisdiction of the Bureau of Consumer Financial Protection (“BCFP”).
- OSHA Whistleblower Protection Program: OSHA and Cal OSHA, the California state based agency, have long published Advisory Guidance on how its program protects whistleblowers from retaliation. In 2017, OSHA published the Recommended Practices for Anti-Retaliation Programs to guide employers on its whistleblower protection statutes. California companies must have complaint reporting channels and helplines, training, and anti-retaliation programs. (https://www.osha.gov/Publications/OSHA3638.pdf)
- National Defense Authorization Act (“NDAA”): Whistleblowing protections for employees of government contractors.
- Whistleblower Protection Act (“WPA”): The WPA is a general anti-retaliation law for federal government employees.
- A recent case included an employee that reported abuse of authority when he exposed a federal official who arbitrarily exercised power negatively affecting others while personally gaining an advantage to himself. Another example is the waste of government funds without receiving a fair return.
- Whistleblowers can disclose information about government fraud to anyone while establishing their case as long as the:
- (i) The disclosure is “protected activity” under the WPA;
- (ii) He/she suffered adverse personnel actions as a result; and
- (iii) the “protected activity” was a contributing factor in the agency decision to take the adverse personnel action (5 U.S.C. 1221(e)(1).)
Note that the federal government employer can avoid liability if it shows by clear and convincing evidence it would have taken the same action even without the whistleblower’s disclosure. (5 U.S.C. 1221(e)(2).)
- California’s False Claims Act is almost identical to its federal counterpart. Unique to California’s FCA is that it has several accompanying laws to protect whistleblowers that go further than the federal FCA. For example, Labor Code Section 1102.5 prohibits retaliation against employees who “blow the whistle” when they notify a government agency on, or refuse to participate in, activity that would violate any laws or regulations in the workplace. The law was greatly expanded in the past several years by extending protection to employees who report suspected behavior not only externally to public entities but specifically internally to a person with authority over the employee or to another employee with the authority to investigate, discover or correct the reported activity.
- The health care industry is one of the major areas filled with FCA violations due to the billions of dollars paid by government programs managed by the Centers for Medicare and Medicaid Services (“CMS”). Specifically in California, the state has laws that prohibit retaliation against patients, physicians, nurses and medical staff who inform the government or its agencies on patient care issues at healthcare facilities. (Government Code Section § 12650 et seq.) In addition, California’s Whistleblower Protection Act (“WPA”) protects state employees against retribution from reporting fraud, waste, and abuse of authority, or violation of law. (California Government Code § 8547.1.)
- In California, the state DOJ’s Office of the Attorney General has an FCA Unit that enforces the FCA and prosecutes FCA violations. Notably, the individual who brings the FCA whistleblower Qui Tam action must do so with enough specifics rather than make generalized accusations. To show that an organization committed FCA violations, a relator must prove each of the following three elements by a preponderance of the evidence (in other words, the evidence has to be just greater than the defense to win the case):
- First, the whistleblower (or in qui tam terminology, the relator) must prove that the defendant (or company/provider of services) made a claim or a statement to get the government to pay money on a claim.
- Second, the defendant’s claim or statement was false or fraudulent.
- Third, the defendant knew that the claim or statement was false or fraudulent. “False” has to be more than just “not true.” The defendant must have intentionally tried to cheat, or lie to, the government. (California Government Code §§ 12650-12656.)
- California’s Private Attorney General Act (“PAGA”): PAGA is one of the most common Qui Tam actions taken on behalf of the State of California. Under PAGA, an aggrieved employee may file a lawsuit on his or her own behalf, on behalf of other aggrieved employees, and/or on behalf of the State of California, seeking enforcement of the Labor Code (specifically, Labor Code Sections 2698-2699.5 et seq.)
- PAGA was first drafted and implemented in 2004, after a coalition of labor and employee rights groups advocated for its ratification.
- For years, PAGA was generally relegated to a mere background role within the realm of employment cases in the California courts, but, it has experienced a substantial uptick in usage in recent years.
- Since it was first adopted, there have been over 1,500 PAGA cases filed in California, not including unreported and unpublished court decisions. Interestingly, over half of the reported cases have been litigated since 2014; in just this past year there were 226 reported cases, perhaps related to the passing of SB 836, effective June 27, 2016, which made important changes to PAGA requirements governing how claims are handled. These cases have provided much precedent and guidance.