Are Whistleblowers Protected from Retaliation by Non-Employers?

A federal judge recently said “yes.” The False Claims Act, 31 U.S.C. § 3730(h), prohibits retaliation against whistleblowers, providing for relief if an 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.

While the statute refers to “employees,” it does not, importantly, limit its application to claims against “employers.”

In United States ex rel. Koch v. Gulf Region Radiation Oncology Centers, Inc., et al., No. 3:12cv504/RV-CJK (N.D. Fla. Jan 30, 2013), the whistleblower, or relator, brought a False Claims Act lawsuit against several defendants, alleging that the defendants had submitted false claims to Medicare and Medicaid for radiation services that had either not been performed or not properly supervised by a doctor. The relator also sued the defendants for retaliation under the False Claims Act, 31 U.S.C. § 3730(h). Two of the defendants moved to dismiss the retaliation claim, arguing that the relator was not their “employee.” The court rejected the defendants’ argument:

• Sacred Heart and MCC next seek dismissal of the retaliatory discharge claim under the FCA (count 4) on the ground that the relator was not an “employee” of these defendants. The relator responds, and I agree, that while this argument may have had merit prior to May 2009, the Fraud Enforcement & Recovery Act of 2009 (“FERA”) amended and expanded the FCA’s retaliation provision to reach even nonemployers. See Moore v. Community Health Services, Inc., 2012 WL 1069474, at *9 (D. Conn. 2012) (stating that the FCA’s retaliation provision (pre-FERA) limited recovery to an individual who was discharged or otherwise discriminated against “by his or her employer” but FERA amended the FCA and “conspicuously omits the word ‘employer’” from the statute, expanding its reach to include non-employers; thus “Moore’s allegations that stem from conduct prior to May 2009 cannot give rise to a retaliation claim against [non-employer] Defendants Sherman and Clemons, but her allegations regarding post-May 2009 conduct, primarily her termination, do give rise to a retaliation claim against these Defendants”). Thus, Koch’s allegations of post-May 2009 conduct (he maintains that he was terminated in January 2010) support a retaliation claim.

In other words, the court held that because FERA amended the False Claims Act by removing the phrase “by his or her employer,” from the anti-retaliation provision of the statute, the False Claims Act now protects whistleblowers from retaliation by anyone, regardless of whether the defendant actually employed the whistleblower. This decision can help provide some protection to whistleblowers who find themselves “blackballed” within their industry. Successful plaintiffs can be awarded two-times back pay, plus interest, compensation for any special damages, and reasonable attorneys’ fees.