Law360 Quotes The Employment Law Group® Law Firm on New False Claims Act

In an article titled, “Financial Anti-Fraud Act Advances For Final Approval,” Law 360 reports about the recently enacted Fraud Enforcement Recovery Act (FERA).The article discusses the ways in which FERA will assist the government in combating fraud.  The article quotes The Employment Group® law firm, which observed that “strengthening the whistleblower statutes will give the government a better shot at shutting down fraud in its earliest stages,” and that these “technical changes to the FCA will restore the original intent of the 1986 amendments, which have been the most effective tool in prosecuting fraud against government contractors.” 

Workforce Management Quotes The Employment Law Group® Law Firm on Whistleblower Litigation

In an article titled, “Outcry on Exec Pay May Spur Rise in Whistle-Blower Suits,” Workforce Management reports on the widespread uproar about the scrutiny regarding executive pay and the potential impact that it may have on whistleblower litigation.  According to the article, experts have suggested that there will be an increase in whistleblower suits filed by employees alleging that they were discharged for opposing their executive compensation packages.  To support this theory, the article points to two recent lawsuits that were filed in March, a month after President Obama placed a cap on executive compensation. The article states in part: “Employees are feeling more empowered to report corporate fraud because they recognize the consequences of upper management ignoring fraudulent activity,” says Jason Zuckerman, a principal at the The Employment Law Group® law firm, a Washington-based firm that represents whistle-blowers. “If management hadn’t ignored employees’ efforts to blow the whistle, then the current economic crisis might not be as severe as it is today.” 

Congress Reinvigorates False Claims Act

Yesterday Congress enacted the Fraud Enforcement Recovery Act of 2009 (S.386) to curb fraud in the financial services industry and strengthen the False Claims Act (FCA), a statute that was originally enacted in 1863 to deter fraud against the government.  Under the qui tam provision of the FCA, a whistleblower can bring a lawsuit on behalf of the government and is eligible to receive 15% to 30% of the government’s recovery.   Whistleblower disclosures under the FCA have led to the recovery of more than $14 billion in fraud.  In light of the Government’s substantial appropriation of funds to stimulate the economy, it is critical to protect taxpayer dollars against fraud.  The amendments to the FCA, which are designed in part to eliminate loopholes that courts have read into the statute, include:

  • expanding FCA liability to include any false claim for government money or property, regardless of whether the claim was submitted directly to a government official or employee;
  • extending liability to any person who knowingly conceals, avoids or decreases an obligation to pay money to the government;
  • expanding the definition of “claim” to include any request or demand for money or property to a contractor or grantee where the government will pay any portion of the claim, regardless of whether or not the government has title to the money or property;
  • authorizing the Department of Justice to share information obtained from a civil investigative demand; and
  • amending the retaliation provision of the FCA by broadening the scope of protected conduct to include efforts to prevent a violation of the FCA and including contractors and agents in the class of individuals protected from retaliation.

For more information about the False Claims Act and The Employment Law Group® law firm’s False Claims Act Practice, click here.

The Employment Law Group® Law Firm Scores Another Victory in Whistleblower Protection Act Case

The Merit Systems Protection Board (“MSPB”) has ordered the U.S. Agency for International Development (“Agency”) to pay backpay, including interest, and other benefits to a former investigator who alleged that he was retaliated against for blowing the whistle about agency personnel consuming alcohol while on duty.  The MSPB also ordered the Agency to cancel the former investigator’s reassignment and restore him to his former position as Inspector in Budapest, Hungary.  The order follows a 2008 decision in Drake v. Agency for International Development, where the U.S. Court of Appeals for the Federal Circuit held that the MSPB erred in concluding that Drake’s disclosures were not protected under the Whistleblower Protection Act (“WPA”) because he could not prove that the behavior he observed was a result of intoxication.  According to the court, the appropriate standard for determining whether an employee’s disclosure is protected under the WPA is “not whether [the employee] was able to prove [a violation], but rather could a disinterested observer with knowledge of the essential facts known to and readily ascertainable by [the employee] reasonably conclude that agency personnel were [engaged in] a violation.”   In applying this standard, the court concluded that Drake had a reasonable belief that agency personnel were intoxicated and thus, Drake engaged in protected conduct under the WPA.  The administrative judge had previously found in favor of Drake on the remaining elements of his appeal, that he was entitled to relief when he proved that his disclosure was a contributing factor in his reassignment and that the agency failed to prove by clear and convincing evidence that it would have reassigned him absent his disclosure.

Mr. Drake was represented by Scott Oswald and Nicholas Woodfield of The Employment Law Group® law firm.  For more information about The Employment Law Group® law firm’s Whistleblower Practice and the Whistleblower Protection Act, click here.

House Passes Amendments to the False Claims Act

Last week, the House passed S.386 (“Fraud Enforcement Recovery Act”) to curb fraud in the financial services industry and to protect taxpayers’ dollars.  While the bill focuses primarily on potential fraud and misuse of economic stimulus funds, it also includes significant changes to the provisions of the federal False Claims Act (“FCA”).  In particular, the bill amends the FCA to restore legislative provisions and address recent court decisions narrowing its reach.  Examples include: 

  • Eliminating the requirement that false claims be presented to the government;
  • Expanding FCA liability to include any false claim for government money or property regardless of whether the claim was submitted directly to a government official or employee;
  • Expanding the types of conduct that can trigger FCA liability;
  • Extending liability to any person who knowingly conceals, avoids or decreases an obligation to pay money to the government; and
  • Expanding the definition of “claim” to include any request or demand for money or property whether or not the U.S. government has title to the money or property.

The House also included an amendment to the retaliation provision of the FCA, which would expand the prohibition against retaliation to contractors and agents.  For information about The Employment Law Group® law firm’s Whistleblower Practice under the False Claims Act, click here.