Getnick Law Comments on Sixth Circuit Holding that FCA Prohibits Post-Employment Retaliation
A divided panel of the U.S. Court of Appeals for the Sixth Circuit has held that the False Claims Act’s (“FCA”) anti-retaliation provision protects former employees alleging post-termination retaliation, reversing a district court’s partial dismissal of an amended complaint from Dr. David Felten against his former employer, William Beaumont Hospital (“Beaumont”).
The FCA prohibits employers from retaliating against whistleblowing employees. The case before the Sixth Circuit involved a whistleblower, Dr. Felten, who alleged that Beaumont was paying kickbacks in violation of the FCA. After the government intervened and settled the claims arising from Beaumont’s kickback scheme, Dr. Felten amended his complaint to add allegations of retaliation that took place after he no longer worked for Beaumont. In particular, Dr. Felten alleged that he was unable to obtain a comparable job at a different hospital because Beaumont had maligned his reputation in retaliation for his blowing the whistle on Beaumont’s kickback scheme.
The question on appeal was whether the FCA’s anti-retaliation provision applied to allegations of former employees – an issue of first impression for the Sixth Circuit. Relying on the Supreme Court’s decision in Robinson v. Shell Oil Co., 519 U.S. 337 (1997), in which the Supreme Court held that the term “employees” in § 704(a) of Title VII of the Civil Rights Act of 1964 could be read to refer to both current and former employees, the court concluded that nothing in the FCA’s text or structure suggested that the anti-retaliation provision only applied to current employees. The court noted that holding the FCA’s anti-retaliation provision only applied to current employees would stymie the very purpose of the statute, explaining that “[i]f employers can simply threaten, harass, and discriminate against employees without repercussion as long as they fire them first, potential whistleblowers could be dissuaded from reporting fraud against the government.”
The Sixth Circuit’s decision creates a split of authority among the Circuit courts. In 2018, the U.S. Court of Appeals for the Tenth Circuit held that the FCA’s anti-retaliation provision “unambiguously excludes” post-termination retaliation.
Read the opinion here.