Ninth Circuit: False Claims Act Standards Clarified
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APPLIES TO All Employers with Employees in AK, AZ, CA |
EFFECTIVE September 30, 2024 |
QUESTIONS? Contact HR On-Call |
Quick Look
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Discussion:
In Mooney v. Fife, the Ninth Circuit Court of Appeals said that a retaliation claim under the False Claims Act (FCA) must be analyzed under the McDonnell Douglas burden-shifting framework, which is applied to similar retaliation claims, such as under Title VII, the Americans with Disabilities Act (ADA), and the Age Discrimination in Employment Act (ADEA).
Here, an employee talked to his supervisor about concerns of improper Medicare and Medicaid billing practices on numerous occasions. The employee was then fired for unauthorized disclosure of confidential information because he allegedly told a prospective employee about a potential acquisition of another company that ultimately jeopardized the employer’s acquisition opportunities. All of this took place within a relatively short period of time.
The FCA protects employees from being terminated for protected activity related to opposing possible fraud against the government. An FCA retaliation claim requires proof of: (1) protected conduct – “the employee must have been engaging in conduct protected under the Act”; (2) notice – “the employer must have known that the employee was engaging in such conduct”; and (3) causation – “the employer must have discriminated against the employee because of her protected conduct.” Under the McDonnell Douglas standard, once the employee has established the existence of retaliation, the burden shifts to the employer to provide a legitimate, non-retaliatory reason for the employee’s termination. Finally, the burden shifts back to the employee to show that the employer’s explanation was merely a pretext for retaliation.
Moreover, an employee’s protected “efforts to stop 1 or more violations” under the FCA need “not lead to a lawsuit or to the ‘distinct possibility’ of a lawsuit.” This means that the employee’s ongoing attempts to alert the employer to the company’s potential legal violations were protected. This ruling was brought in the procedural context of a summary judgment motion. However, it underscores the care employers must take when evaluating whether legitimate cause exists to terminate a whistleblowing employee.
Action Items
- Review decisions to terminate whistleblowing employees with legal counsel before taking action.
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2024 ManagEase