Whistleblowers Could Start Seeing Higher Rewards for Employer Retaliation

It used to be a given that whistleblowers—especially employees of government contractors—would be the victims of retaliation and likely fired if their employers discovered that they had blown the whistle. Employees were previously covered by anti-retaliation protections only if they were investigating an actual False Claims Act action which their employer knew about, and then became the victim of retaliation because of their investigation.

That changed dramatically in May of 2009, when Congress enacted the Fraud Enforcement and Recovery Act (FERA) in an effort to expand the reach of the False Claims Act, FERA was designed to enhance protections for whistleblowers who tell their employers and/or the government about company fraud or misconduct by expanding retaliation protections to cover not just employees, but also independent contractors, agents and “associated others.” It also increased covered actions and created a three year statute of limitations from the date of the employer retaliation.

According to the National Law Journal, the protections in FERA allow for prevailing plaintiffs to recover damages, including reinstatement, two times back pay plus interest and compensation for ‘special damages’ sustained from the retaliation. This last part is especially important because ’special damages’ may include pain and suffering.

Due to the broadened reach of retaliation claims now afforded to whistleblowers post-FERA, it is very likely that we will see more employer retaliation cases brought under the False Claims Act (either accompanying a qui tam claim or not). It is also likely that employer retaliation cases will yield higher awards, especially when claims incorporate expert testimony on emotional distress (for which there is no cap on damages).

While some scattered courts across the country continue to follow pre-FERA precedent, most continue to rule in a manner consistent with Congress’ clear intent to provide whistleblowers with more anti-retaliation protection. The bottom line: employers that retaliate in violation of the False Claims Act have a lot more to lose, which is good news for whistleblowers.


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