In this episode, hosts Jason Crawford and Mana Lombardo speak with Trina Fairley Barlow, a partner in the firm’s Labor and Employment and Government Contracts groups, and Christine Hawes, counsel in the Labor & Employment Group, to discuss the False Claims Act’s retaliation provision and considerations for investigating FCA allegations brought by whistleblowers. “Let’s Talk FCA” is Crowell & Moring’s podcast covering the latest developments with the False Claims Act.
Senator McCaskill’s bill, S.795 “A Bill to Enhance Whistleblower Protection for Contractor and Grantee Employees,” is on President Obama’s desk for signature. According to the Senate Report, the bill would make permanent the current pilot program, expiring this month, that ensures that employees of civilian contractors are protected from retaliation, namely that “anyone who reports the misuse of federal funds could not be demoted, discharged, or discriminated against because of the disclosure.”
While the pilot program has been in place for several years, the frequency of whistleblower reprisal actions has increased recently. Whistleblower protections have also been the subject of recent Congressional interest, and the Government Accountability Office is auditing the current pilot program. Rather than wait for the results of the audit, however, Congress chose to push forward with the current legislation (which has received bipartisan support) in the waning days of the Obama Administration. Should the bill become law, contractors and grantees might take the opportunity to reexamine their compliance with the pilot program, as well as review how whistleblowers are treated and how their allegations are investigated and documented in order to mitigate the risk of liability in face of rising pressure to sustain allegations.
Whistleblowers (and those who might claim that status following a negative employment action) have many methods of seeking government help to address their concerns, including qui tam lawsuits, wrongful termination litigation, and whistleblower reprisal allegations brought before various government agencies. Each of these actions invites the government into a contractor or grantee’s operations, as well as records, and increases pressure on the company. Continue Reading Enhancing Whistleblower Protections for Contractor Employees (Permanently?)
For the third consecutive term, the Supreme Court will hear a case involving the False Claims Act (FCA). On May 31, the Court granted review in State Farm Fire and Cas. Co. v. U.S. ex rel. Rigsby to address the applicable standard for dismissal in FCA cases when whistleblowers (referred to as relators under the statute) violate the FCA’s statutory sealing provision by publicly revealing the allegations in their complaint while it is under seal and being investigated by the government. The case presents the Court with an opportunity to resolve a split in which circuits have applied three tests: (1) a bright-line rule that mandates dismissal; (2) a rule that considers whether the violation frustrates the congressional goals served by the seal requirement; and (3) a balancing test that focuses on whether the violation actually harms the government. Crowell & Moring plans to monitor developments closely and will provide an update when the case is fully briefed.
Partner Mark Troy, in this three-part video series, provides an overview of the trends in False Claims Act litigation that are likely to affect companies in the coming year, including the proper measure of damages and how to deal with whistleblower employees and enforce contractual releases.
All three videos are embedded below for viewing. For a complete transcript, please click here to visit Crowell.com.
Additional video alerts from Crowell & Moring on a range of topics affecting the legal industry can be found on our YouTube channel.
Earlier this year, Crowell & Moring assembled an interdisciplinary team of attorneys to begin reporting on legal developments regarding whistleblowers. The result is the Whistleblower Watch blog (whistleblowerwatch.com), on which more than 15 contributing authors post about everything from the False Claims Act to Sarbanes-Oxley to the SEC. They monitor legislation and case law at the federal and state levels, and keep tabs on agency actions that affect whistleblowers and their employers.
We hope you will find Whistleblower Watch a valuable resource as you navigate the complex areas of whistleblower law. You can also follow the blog’s updates on Twitter: @CMWhistleblower.
On July 25, DoD, GSA and NASA issued a final rule implementing a section of the FY 2013 NDAA addressing the allowability of legal costs incurred by a contractor or subcontractor related to whistleblower proceedings. The new rule, which amends the cost principle at FAR 31.205-47 to make costs incurred in connection with any proceeding brought by contractor or subcontractor employees submitting a whistleblower complaint under 41 U.S.C. 4712 or 10 U.S.C. 2409 unallowable if the contractor is found liable for fraud or similar misconduct in the whistleblower proceeding, modifies the proposed rule published on September 30, 2013. Specifically, the final rule adds adding language to FAR 31.205-47(c) to provide for the same treatment of costs for settled whistleblower complaints as is currently provided for settlement of proceedings brought by a third party under the False Claims Act in which the United States does not intervene intervene (i.e., legal defense costs may be allowable if the government determines that there was very little likelihood that the whistleblower would have been successful on the merits). Continue Reading New Rule Seeks to Limit Allowability of Whistleblower-related Costs
At 2:00 p.m. EST on February 27, 2013, Crowell & Moring Attorneys Peter Eyre, Andy Liu, Rebecca Springer, and Jason Lynch will conduct a webinar on the implications of the FY2013 NDAA’s new whistleblower protections for government contractors. The webinar will offer analysis of the expanded protections, define and discuss “retaliation” as defined under the law, and provide guidance to government contractors on how to handle whistleblowers from both compliance and employment law perspectives.
Further details and registration information are available here.
In a series of posts (Part 1), I’m examining the Department of Justice’s annual Summary of False Claims Act cases and recoveries to see what these statistics might reveal about FCA enforcement trends. In the first post, we looked at the rising number of new FCA matters that were filed last year. But who gets the credit? Let’s find out. Rise of the Relator Only looking at the number of new matters is misleading: Although more investigations and cases are initiated each year, the credit (some might say blame) goes to qui tam relators-otherwise known as whistleblowers. The following illustration shows the total number of new matters (in black) between 2000-2012, as well as the new matters that were initiated by the government (in red). Though the number of new matters ballooned between 2000-2012, those attributed to the government did not. The number of government-initiated new matters has remained relatively flat for the past 12 years, rising to a high of 162 in 2008 and sinking to a low of 61 in 2002. The rise in new FCA matters is mostly a result of more whistleblower cases being filed each year. A look back at the number of government-initiated matters, as opposed to qui tam matters, bears this out. The most matters the government initiated was in 1987, the first year it began publishing statistics. But after that, the number of government-initiated matters steeply declined until 2000, since when it has remained flat. This illustration might suggest that the government is less focused on bringing new FCA cases or opening new investigations. The more likely explanation, however, is that the government is devoting more resources and effort to investigating and litigating the allegations of fraud that are being brought by relators as those numbers have ballooned.