To understand how False Claims Act litigation under federal law fits with the Whistleblower Act, we first need to discuss exactly what the false claims law is, what it requires, and who’s penalized by it. The False Claims Act was originally passed as an additional measure to ensure contract compliance by vendors and those billing the federal government for services or product.
No surprise, the law came into existence when numerous audits and investigations uncovered evidence of billing irregularities. Overcharging, intentional misdirection, and even withholding of information have happened, resulting in inflated costs for the government.
False Claims Act Defined
Technically, the False Claims Act penalizes any intentional action that lies, falsifies, misdirects or omits information in such a way that a billing to the government is incorrect or untrue. This includes the intentional withholding of information from the federal government that should have been shared.
In all instances the information must meet a definition of being “material,” in importance. But that term is a subject to how federal investigators interpret it.
The Whistleblower Act is intended to protect people who believe they have no other option but to go to an external authority to report wrongdoing by their employer.
The protection is written to ensure that the employee is not unfairly punished for reporting the wrongdoing, particularly in an attempt to cover the matter up internally.
Interaction and Application in False Claims Act Litigation
The two Acts cross over when the incorrect billing is reported. At this point, the Whistleblower Act protects the reporting when wrongdoing is found, and the False Claims Act provides the penalty for the wrongdoing as well as a deterrent given the size of the penalty involved in False Claims Act litigation.
For example, if a company has a whistleblower but does nothing to negatively impact the reporting party’s career or job, then there is no issue. The person has made his report, and the company deals with the fallout as it occurs. The federal government then uses the information and files a civil suit under the False Claims Act alone.
On the other hand, if a company fires the reporting person, now both Acts are triggered. First, the False Claims Act still applies because the intentional incorrect billing is discovered. Second, because the company fired the employee due to the report, the company will be hit with additional charges from the former employee under the Whistleblower Act.
There is no question that the interaction of False Claims Act litigation and whistleblower protections complicate such civil claims, and information is available to help guide companies potentially facing such charges.
Have questions about False Claims Act litigation? Click to contact the Bothwell Law Group online.