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Do the Retaliation Provisions of the False Claims Act Protect You After You are No Longer Employed?

You may be familiar with the concept of Medicare or Medicaid fraud, where individuals or businesses make false claims for payment based on services that were never provided. Some businesses may also attempt to defraud the federal government in their federal contracts. The False Claims Act is a federal statute that not only provides protection for whistleblowers who report fraudulent claims but also provides significant rewards to those employees, including a portion of the money recovered by the government as a result of their reports. If an employer retaliates against the whistleblower, the Act protects that employee. But what if you are no longer an employee? Do you still have those same protections?

The Case of Debbi Potts

Debbi Potts resigned as Campus Director at the Center for Excellence in Higher Education, Inc., and, in doing so, signed an agreement as part of her severance package. The agreement prohibited Potts from disparaging her employer and from filing any type of grievance with a governmental or regulatory agency. Yet, well after she resigned, Potts filed a complaint with the institution’s accrediting agency alleging certain deceptions used in order to retain accreditation.

The institution filed a breach of contract claim against Potts because she violated the severance agreement in making those complaints. Potts then filed a countersuit alleging that she was being sued in retaliation for filing a complaint under the False Claims Act.

Tenth Circuit Case Denies Protection to Former Employees

Potts’s retaliation claims were dismissed by the trial court finding that she was not protected by the anti-retaliation provisions of the False Claims Act. The Tenth Circuit agreed with the dismissal. The specific issue was whether the anti-retaliation provisions of the False Claims Act apply to protect former employees. The language of the statute which includes the term “employee” is quite specific. The Tenth Circuit ruled that “employee” only refers to individuals who are current employees at the time of the alleged retaliation.

The Difficult Choice for Employees

Whistleblowers, those individuals who have knowledge of illegal activity engaged in by their employers and report it, typically have certain protections against discrimination or retaliation by their employers. Deciding to be a whistleblower can be very difficult because of the risks, despite the protections that may be available. It is because of these risks that protections are available in order to encourage employees to report illegal activity. However, when an employee files a lawsuit because they believe they have been retaliated against, there is a certain standard that must be met. As this Tenth Circuit case demonstrates, a former employee may not be safe engaging in protected activity after termination of employment, at least under the False Claims Act.

If you feel you have been the victim of discrimination or retaliation in the workplace, or if you have any other questions regarding your employment rights, please contact the experienced
Birmingham employment law attorneys at Wrady & Michel, LLC. You can contact us either online or by calling us at (205) 265-1880. We are here to serve you!