Post-Employment Retaliation A circuit split has emerged on the question of whether the FCA’s anti-retaliation provision protects individuals from retaliation by their prior employer after their employment ends. Before 2021, the only circuit court to have addressed the question (the Tenth Circuit) and most district courts had concluded that the FCA does not protect individuals from alleged post-employment retaliation. 179 In U.S. ex rel. Felten v. William Beaumont Hosp. , however, the Sixth Circuit rejected the reasoning from these cases in holding that the FCA’s anti- retaliation provision can encompass acts taken by an employer against a former employee. 180 The Sixth Circuit’s opinion involved allegations from a physician-scientist that his former employer interfered with up to 40 employment applications that he submitted to various institutions, ultimately blacklisting him from academic medicine. In holding that a former employee can raise retaliation claims for a post-employment adverse action, the Sixth Circuit observed that the text of the FCA is not explicitly limited to current employees. Acknowledging that its holding created a split with the Tenth Circuit, the Sixth Circuit relied on the Supreme Court’s interpretation of Title VII’s analogous anti-retaliation provision to find that: (1) the FCA provision does not have a temporal qualifier accompanying the term “employee” that would limit it to only current employees; (2) the dictionary definition of “employee” does not inherently exclude former employees; and (3) the remainder of the FCA implies that it covers former employees, as remedies such as reinstatement can be awarded only to former employees. The Sixth Circuit left open the issue of whether blacklisting a former employee from future employment is an adverse employment action, as the lower court had yet to decide that question. One notable development occurred after the Sixth Circuit’s ruling that will be worth watching in the year ahead. Proposed amendments to the FCA were introduced in Congress that would revise the statute to expressly extend relief to former employees for post-employment retaliation. 181 Protected Activity and the Underlying Fraud The first question in assessing an FCA retaliation claim is whether the plaintiff engaged in protected activity, which includes: (1) an employee’s lawful actions “in furtherance of” an FCA action or (2) “other efforts to stop 1 or more violations” of the FCA. 182 While the specific standards courts apply in assessing these two prongs of protected activity may vary, courts generally require that an employee’s actions relate to a fraud against the government, and not merely general compliance or regulatory concerns, to qualify as protected activity. For example, in U.S. ex rel. Skibo v. Greer Labs., Inc. , the Fourth Circuit affirmed summary judgment in favor of the defendant where one of the plaintiffs argued that her raising concerns about FDA violations established that she engaged in protected activity. 183 The plaintiff’s testimony established that “at best” she raised concerns about FDA regulatory 179 See, e.g. , Knight v. Standard Chartered Bank , 531 F. Supp. 3d 755 (S.D.N.Y. 2021) (noting that “an FCA retaliation claim must be based on actions that occurred during the plaintiff’s employment” and listing supporting cases). 180 993 F.3d 428 (6th Cir. 2021). 181 False Claims Amendment Act of 2021, S. 2428, 117th Cong. § 4 (2021). 182 31 U.S.C. § 3730(h)(1). 183 841 F. App’x 527 (4th Cir. 2021).
compliance, which was part of her job description, but she never alleged that she “raised an issue of false or fraudulent conduct beyond a regulatory violation that would constitute an FCA violation.” In Hickman v. Spirit of Athens, Ala., Inc. , the Eleventh Circuit affirmed the district court’s grant of summary judgment to the employer where plaintiffs believed that their employer was misusing federal funds automatically distributed from the Tennessee Valley Authority (TVA) and had taken steps to investigate and audit the alleged misuse prior to their termination. 184 The Eleventh Circuit found that plaintiffs failed to establish they engaged in protected activity because they knew their employer received the funds without submitting a claim to the federal government and without any limitations from the TVA. The Eleventh Circuit noted that it had yet to consider the meaning of “other efforts to stop [an FCA] violation” in the statutory text and recognized that other circuits had interpreted it to require an “objectively reasonable belief” that the employer is violating or soon will violate the FCA, but the Eleventh Circuit ultimately declined to adopt a standard. It held that even if a “reasonable belief” is “all that is required,” the plaintiffs’ actions failed to meet that standard. The Eleventh Circuit reasoned that “at a minimum,” plaintiffs must “show that the activity they were fired over had something to do with the [FCA] – or at least that a reasonable person might have thought so,” considering that FCA liability “arises from the submission of a fraudulent claim to the government, not the disregard of government regulations or failure to maintain proper internal procedures.” This threshold requirement “matters,” the Eleventh Circuit stressed, because “[i]t is not enough for an employee to suspect fraud [or] misuse of federal funds.” Instead, an employee “must suspect that her employer has made a false claim to the federal government.” Relying in part on Hickman , the district court in Simon v. HealthSouth of Sarasota Ltd. P’ship granted the defendants’ motion for summary judgment, explaining that to establish protected activity, a plaintiff “must not only show that she subjectively believed” that her employer “was violating the FCA, but also that her belief was objectively reasonable in light of the facts and record presented.” 185 The plaintiff alleged her employer retaliated against her for raising complaints about the alleged use of false diagnoses by employed physicians. While crediting the plaintiff’s testimony at the summary judgment stage that she did, in fact, make complaints about alleged fraud, even absent documented evidence, the district court held that the plaintiff’s action was not protected activity because she lacked an objectively reasonable basis to believe that the defendants were submitting false claims. In so holding, the district court highlighted: (1) the plaintiff’s lack of involvement with hospital billing; (2) her general lack of knowledge about diagnosis coding; and (3) evidence indicating that medical professionals could reasonably differ in opinion regarding the underlying diagnosis coding issue. In contrast, in Heckman v. UPMC Wellsboro , the district court found the plaintiff’s allegations that he informed defendant-hospitals that they were in violation of Federally Qualified Health Center program requirements sufficient to constitute “an effort to stop” an FCA violation, even though the plaintiff failed to specifically allege that he referenced
184 985 F.3d 1284 (11th Cir. 2021). 185 2021 WL 533539 (M.D. Fla. Feb. 12, 2021).
FALSE CLAIMS ACT UPDATE BASS, BERRY & SIMS | 30
Powered by FlippingBook