Whistleblowers have multiple protections due to a framework of various laws across public and private sectors. Each statute and law provides different protections and rewards. Below is some information on laws that apply to whistleblowers.
Types of Whistleblower Laws
The False Claims Act (FCA) provides that any person who:
- Knowingly presents, or causes to be presented, to an officer or employee of the United States government, or a member of the Armed Forces of the United States, a false or fraudulent claim for payment or approval;
- Knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the government;
- Conspires to defraud the government by getting a false or fraudulent claim paid or approved by the Government; or
- Knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the government, is liable to the United States government for civil penalties plus three (3) times the amount of damages which the government sustains because of the act of that person.
While the False Claims Act imposes liability only when the Defendant acts “knowingly,” it does not require that the person submitting the false claim have actual knowledge that the claim is false. A person who acts in reckless disregard or in deliberate ignorance of the truth or falsity of the information also can be found liable under the Act. 31 U.S.C. 3729(b).
In sum, the False Claims Act imposes liability on any person who submits a claim to the federal government that he or she knows (or should know) is false. An example may be a physician who submits a bill to Medicare for medical services the physician knows has not been provided. The False Claims Act also imposes liability on an individual who may knowingly submit a false record in order to obtain payment from the government. An example of this may include a government contractor who submits records that he knows (or should know) is false, and that indicates compliance with certain contractual or regulatory requirements. The third area of liability includes those instances in which someone may obtain money from the federal government to which he may not be entitled, and then uses false statements or records in order to retain the money. An example of this so-called “reverse false claim,” may include a hospital that obtains interim payments from Medicare throughout the year, and then knowingly files a false cost report at the end of the year in order to avoid making a refund to the Medicare program.
In addition to its substantive provisions, the FCA provides that private parties may bring an action on behalf of the United States. 31 U.S.C. 3730 (b). These private parties, known as “qui tam relators,” may share in a percentage of the proceeds from an FCA action or settlement.
On July 21, 2010, President Barack Obama signed into federal law the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Dodd-Frank Act promotes the financial stability of the United States by improving accountability, and transparency in the financial system, to end “too big to fail.” It protects the American taxpayer by ending bailouts, and to protect consumers from abusive financial services practices. Further, the Dodd-Frank Act made changes in the American financial regulatory environment that affect all federal financial regulatory agencies, and almost every part of the nation’s financial services industry.
In addition to establishing a new watchdog agency, the whistleblower provisions in the Dodd-Frank Act rewards Whistleblowers by increasing transparency in disclosures, thereby strengthening the ability of regulators to uncover and prosecute fraudulent schemes. Whistleblowers will now have a broad range of options to pursue retaliation claims. The Dodd-Frank Act requires the Securities and Exchange Commission (SEC) to reward Whistleblowers who disclose original information regarding violations of securities law that result in monetary sanctions exceeding $1,000,000.00. The reward can range from between 10% and 30% of the amount recouped by the SEC. Further, employers are prohibited from retaliating against those Whistleblowers that do come forward. For the Whistleblower to be eligible for a reward under the Dodd-Frank program, the disclosure must relate to a violation of one or more securities laws, rules, or regulations. Importantly, the Dodd-Frank Act explicitly includes within the purview of the SEC any violations of the Sarbanes-Oxley Act (SOX) or the Foreign Corrupt Practices Act (FCPA).
The non-retaliation provision of the Dodd-Frank Act protects Whistleblowers who report what they reasonably believe to be a possible securities law violation that has occurred, is occurring, or is about to occur. The SEC is permitted to enforce the anti-retaliation provisions by investigating and sanctioning employers who practice illegal retaliation should the SEC or the courts find an employer liable for retaliation, the prevailing Whistleblower can:
- Be reinstated to their former position;
- Recover double the wages owed to them in the form of back pay with interest; and
- Recover attorney’s fees and other litigation costs.
On July 30, 2002, President George H. W. Bush signed into law the Sarbanes-Oxley Act of 2002, which he characterized as “the most far-reaching reforms of American business practices since the time of Franklin Delano Roosevelt.”
The Sarbanes-Oxley Act of 2002 (“SOX”), was enacted by Congress in the wake of the colossal accounting frauds at Enron and WorldCom. SOX has transformed the legal landscape for employees who work at publicly traded companies. SOX’s whistleblower-protection provisions provide a powerful legal mechanism for employees who suffer retaliation for their reporting of accounting fraud, misleading statements to the investing public, and other financial or securities-related misdeeds.
The successful representation of Sarbanes-Oxley whistleblowers necessitates the ability to analyze and assert claims within a 180-day deadline for the filing of claims with the Department of Labor (DOL), which is the federal agency that first hears all SOX whistleblower cases. And, both the DOL and the federal courts, which can accept jurisdiction after employees have first exhausted the DOL procedures, have very stringent requirements for bringing and proving of SOX whistleblower claims.
Sarbanes-Oxley only requires that the violated federal law relate to fraud against shareholders. That is, an employee who reports fraudulent conduct not directed at the shareholders will still be protected if the activities complained of, relate to fraud against shareholders. Under Sarbanes-Oxley, the employee is required only to have a reasonable belief that the company’s wrongdoing will sufficiently impact shareholders; certainty, is not a requirement.
The Stark Act is a law with a limitation on certain physician referrals. It prohibits physician referrals of Designated Health Services (DHS) for Medicare and Medicaid patients if the physician (or an immediate family member) has a financial relationship with that entity. A financial relationship includes ownership, investment interest, and compensation arrangements. The term “referral” means, for Medicare Part B services, “the request by a physician for the item or service” and, for all other services, “the requestor establishment of a plan of care by a physician which includes the provision of the designated health service.” DHS includes clinical laboratory services, as well as, the following:
- Physical-therapy services;
- Occupational-therapy services;
- Radiology, including magnetic resonance imaging, computerized axial tomography scans, and ultrasound services;
- Radiation therapy services and supplies;
- Durable medical equipment and supplies;
- Parenteral and enteral nutrients, equipment, and supplies; prosthetics, orthotics, and prosthetic devices;
- Home health services and supplies;
- Outpatient prescription drugs; and
- Inpatient and outpatient hospital services.
The Stark Law contains several exceptions which include:
- Physician services;
- In-office ancillary services;
- Ownership in publicly traded securities and mutual funds;
- Rental of office space and equipment; and
- Bonafide employment relationship; etc.
The Occupational Safety and Health Act (OSHA) is the federal law that governs occupational health and safety in the private sector and federal government. It was enacted by Congress in 1970 and was signed by President Richard Nixon on December 29, 1970. Its main goal is to ensure that employers provide employees with an environment free from recognized hazards, such as exposure to toxic chemicals, excessive noise levels, mechanical dangers, heat or cold stress, or unsanitary conditions.
The Occupational Safety and Health Act, and a number of other laws protect workers against retaliation for complaining to their employers, unions, the Occupational Safety and Health Administration, or other government agencies about unsafe or unhealthful conditions in the workplace, environmental problems, certain public safety hazards, and certain violations of federal provisions concerning securities fraud, as well as for engaging in other related protected activities. Whistleblowers may not be transferred, denied a raise, have their hours reduced, be fired, or punished in any other way because they have exercised any right afforded to them under one of the laws that protect Whistleblowers.
Under the Occupational Safety and Health Act (OSHA), employees may file complaints if they believe that they have experienced discrimination or retaliation for exercising any right afforded by the OSHA such as complaining to the employer union, OSHA, or any other government agency about workplace safety or health hazards; or for participating in OSHA inspection conferences, hearings, or other OSHA-related activities.
The Military Whistleblower Protection Act 10 U.S.C §1034 protects the right of members of the Armed Services to communicate with any member of Congress (including copies of the communication that may be sent to others.) The Military Whistleblower Protection Act of 1988 was passed by the United States Congress to protect military members who make lawful disclosures of wrongdoing to Members of Congress, or Inspector General. It required the Office of the Inspector General, and the U.S. Department of Defense to investigate allegations of whistleblower reprisal. The statute was broadened in 1991 to protect disclosures to auditors, criminal investigators, inspectors, and other Department of Defense law enforcement officers. In 1998, Congress amended the statute to permit lesser Inspectors General to receive allegations, and conduct investigations, and retained oversight in the Office of Inspector General, U.S. Department of Defense.
Under the Military Whistleblower Protection Act, no person may take (or threaten to take) an unfavorable personnel action, or withhold (or threaten to withhold) a favorable personnel action, as a reprisal against a member of the armed forces for making or preparing a communication to a Member of Congress or an Inspector General that may not be restricted; or a communication that is made to the following:
- Member of Congress;
- Inspector General (as defined in subsection (i)) or any other Inspector General appointed under the Inspector General Act of 1978;
- A member of a Department of Defense audit, inspection, investigation, or law enforcement organization;
- Any person or organization in the chain of command; or
- Any other person or organization designated pursuant to regulations or other established administrative procedures for such communications.
Most all states have laws which provide for Whistleblower rights and protections. Based upon the nature of your whistleblower claim, and the state in which it arises, whistleblower counsel should refer to any state laws which apply in addition to the primary remedy available under the federal False Claims Act.
The Florida False Claims Act (§68.081) allows Whistleblowers to bring suit in the name of the State of Florida where a wrongdoer engages in conduct that defrauds the state or local governments of taxpayer dollars. The law is a broad and far reaching statute designed to address an array of wrongdoing from health care fraud, to fraud involving any type of government contract or business relationship involving state or local money.
Similar to the Federal False Claim Act, the Florida False Claims Act’s purpose is to deter persons from knowingly causing or assisting in causing the state government to pay claims that are false or fraudulent, protect Whistleblowers from retaliation, and to provide remedies for obtaining treble damages and civil penalties for state government when money is obtained from state government by reason of a false or fraudulent claim. To show that there has been fraudulent claims under the Florida False Claim Act, a Whistleblower must know that their company;
- Has actual knowledge of the information;
- Acts in deliberate ignorance of the truth or falsity of the information; or
- Acts in reckless disregard of the truth or falsity of the information;
- Knowingly presents or causes to be presented to an officer or employee of an agency a false or fraudulent claim for payment or approval;
- Knowingly makes, uses, or causes to be made, or used a false record or statement to get a false or fraudulent claim paid, or approved by an agency;
- Conspires to submit a false or fraudulent claim to an agency or to deceive an agency for the purpose of getting a false or fraudulent claim allowed or paid;
- Has possession, custody, control of property, money used, or to be used by an agency, and intending to deceive the agency, or knowingly conceal the property, delivers or causes to be delivered less property than the amount for which the person receives a certificate or receipt;
- Is authorized to make or deliver a document certifying receipt of property used or to be used by an agency, and intending to deceive the agency, makes or delivers the receipt without knowing that the information on the receipt is true;
- Knowingly buys or receives, as a pledge of an obligation or a debt, public property from an officer or employee of an agency who may not sell or pledge the property lawfully; or
- Knowingly makes, uses, or causes to be made or used a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to an agency.
As an employee, you have rights that protect you from any retaliation when opposing unlawful activities, or for reporting fraud.
It is important when reporting fraud, that you have as much detail of the fraud, and any corroborating evidence to show what fraud was perpetrated.
We have over 35 years of experience and have been successful in recovering millions of dollars that were fraudulently obtained from the government.