Qui Tam and Whistleblower Claims and Company Retaliation

Investigate every employee complaint thoroughly or face the consequences

Posted by Jared Jacobson in Ethics & Compliance, Whistleblower on August 20th, 2012

The federal False Claims Act was designed to hold accountable any individual or business that commits various types of fraud against the government. The law allows the defrauding business’s employees or any non-employee who is aware of the fraud, including independent contractors, to “blow the whistle” and file a qui tam claim.

The whistleblower is called the relator and, if successful, can typically collect 20 per cent of any funds recovered by the government. It is not unheard of for the government to settle a case against a large government contractor in the healthcare industry for $100 million. A relator in this example would receive $20 million.

Fraud against the Government

Fraud may come in a number of forms including:

  • defense contractor fraud
  • Medicare fraud or Medicaid fraud by a physician’s office or hospital
  • off-label marketing by a pharmaceutical company
  • affordable housing grant fraud
  • education fraud
  • other federal grant and federal program fraud
  • many other forms of financial fraud, including Securities and Exchange Commission Fraud (SEC) and fraud against public companies

Retaliation against Whistleblowers

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Not surprisingly, employers often do not respond positively to accusations of fraud or criminal activities. Very often, the whistleblower is in the compliance, billing or government affairs department of a large corporation and has the opportunity to discover the wrongdoing.

Once an employee or contractor begins “noticing things that aren’t right” and brings them to their superior or boss, even if that employee had a stellar work record prior to noticing the problem, quite often various forms of unmerited discipline, up to and including termination, begin to befall the employee. For example, the employee is suddenly put on a “performance improvement plan (PIP)” which ultimately cannot be met.

This is obviously retaliation. There is a clear anti-retaliation provision in the federal False Claims Act which affords an individual who has been retaliated against legal protection and an independent claim in and of itself.

Internal Investigation

From a company’s perspective, if an employee or independent contractor brings to light any type of fraud on the government at the hands of the company, a proper and prompt independent investigation is in order to figure out what exactly is taking place.

From a whistleblower’s perspective, if s/he begins to be treated differently after discovering such wrongdoing, it is necessary to seek legal counsel to protect his or her rights, for a number of reasons, setting aside any financial reward, as noted above.

One of the most important reasons for a whistleblower to retain a lawyer is to seek immunity for the whistleblower in case of criminal participation involving the whistleblower.  The extent of the whistleblower’s participation may also affect any potential financial recovery.

Take Complaints Seriously

Qui Tam and whistleblower claims are on the rise once again against companies. There are many law firms, including this author’s, who are actively seeking to represent whistleblowers nationally against companies committing fraud against the government. Therefore, it is more important than ever for companies who receive any government money in any form to take complaints by their employees and contractors extremely seriously or else face a difficult path if such fraud eventually comes to light.


Jared Jacoboson
Jared Jacoboson

Attorney and founder of The Law Firm of Jacobson & Rooks, LLC

Jared Jacobson is one of the founding members of The Law Firm of Jacobson & Rooks, LLC. Jared Jacobson represents individual employees and executives as well as counsels employers in conducting workplace investigations to mitigate risks of employment and whistleblower litigation. Jared regularly performs human resource audits to ensure compliance with state (PA, NJ and NY) and federal discrimination, misclassification and wage and hour laws, as well as the risks associated with whistleblowers. Jared helps his clients understand the importance of investing in pre-emptive annual policy audits and work-place training as well as performing a proper investigation when a complaint is filed or threatened which can be invaluable when compared with the alternative.

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