Whistleblower Laws

There are a lot of terms in this area of law and they get used interchangeably, so people do get confused. Some have strict legal definitions and some do not.

For example, the term “Whistleblower” is commonly used to describe a person who is reporting wrongdoing. Whistleblower laws, though, are generally just the laws that protect those people. Some people think of the First Amendment to the U.S. Constitution as the ultimate whistleblower law—after all, it protects your right to speak.

The Federal False Claims Act is generally considered to be a whistleblower law, perhaps the most effective one, even though it is really meant to allow for recoveries for harm perpetrated against the government. The Federal False Claims Act includes a specific provision to protect the individual who suffers retaliation for blowing the whistle on such fraud. It also includes a provision to reward the person who reports the fraud to the government. What makes it a little different from most whistleblower laws, is that, at least initially, it is not a public whistleblower law. Maybe you have the right to speak under the First Amendment, but if you want to collect a reward under the False Claims Act you must first file your allegations in secret and keep them confidential initially.

This can create some tension and is hard for many people to grasp. However, it usually is beneficial to the whistleblower. The False Claims Act litigant reports the allegations to the government, who can investigate the case and hopefully prosecute the allegations made by the whistleblower. It is hard to fathom what if any rights are lost to the whistleblower by handling matters this way. Indeed, there is both the potential for a substantial reward and some protection in the fact that initially a whistleblower’s identity is not immediately revealed.

Whistleblower Law

Of course, The False Claims Act is by no means the only whistleblower law. There are many federal and state laws which have been enacted to try to protect whistleblowers.

Whistleblowers usually often risk their jobs or their careers to fight wrongdoing. Sometimes, all too often really, people blow the whistle before learning about their rights, because the wrongful acts are too awful to endure. Just the stress of living with the knowledge of serious wrongdoing and not knowing how to proceed can be debilitating. Obviously, losing any job is a serious hardship. It can be especially difficult for many whistleblowers who learn about wrongdoing specifically because they have achieved a higher level in their profession. After building a career involving twenty years of increasing responsibility, to say blowing the whistle is “just” a matter of risking a job, often undervalues the risk most whistleblowers decide to make.

That is why the False Claims Act and many other whistleblower laws allow suits for retaliation. That is why virtually any whistleblower who is rewarded with a portion of the government’s recovery, no matter how large, has more than earned it.

Developments in Whistleblower Law

There are various developments that have occurred regarding whistleblower laws. For example, there have been a couple of large foreign wars with huge expenditures abroad and there have been a few successful False Claims Act cases, but there has been some difficulty in obtaining the hard information to support these cases.

There has also been a recognition by the U.S. Securities and Exchange Commission (SEC) that one cannot force a whistleblower to sign a confidentiality agreement that leaves them unable to report required information to the government. Another development is that it is clear that the jurisdiction of the False Claims Act extends the contracts with the United States government even if those contracts extend to foreign countries that are a part of what has come out of the defense.

One issue with regard to defense contracting in particular is that the Supreme Court struck down the extended statute of limitations based on the idea that the United States is at war and so no statute of limitations really applies. Another thing that has happened as a result of several defense contracting cases that were difficult to prosecute is that Congress amended the False Claims Act so that it is now much easier to make a case against subcontractors than it used to be under the old False Claims Act prior to 2009.

what is a whistleblower

Developments with Healthcare

Drug companies have gotten more sophisticated about marketing and more careful about their marketing procedures. It is still an open question as to whether industry-wide healthcare providers are better than they used to be. Healthcare is expansive which makes it hard to know if industry-wide practices have improved in terms of billing and ordering medically unnecessary procedures. Unfortunately, this still seems to occur and is a development that attorneys will need to watch to see if it is really going to have an impact on these industries.

Developments in Whistleblower Law with the SEC

The SEC is mostly in the beginning phases of development. There have been a few large collections. There have not been too many huge collections yet. There is proposed legislation to require brokers to become more like fiduciaries for their clients and that would have an impact on SEC whistleblower provisions. The major issue though is that the sheer number of tips that the SEC is now getting is giving them a lot of work to do to investigate and will take a longer time to come to fruition. It is still a little early with the SEC whistleblower law to see the full impact of that law. As they start seeing these reports from whistleblowers then there will be further developments.

Case Length

Whistleblower cases take a considerable amount of time for a number of reasons. Cases are often complicated, as there are often a number of regulations that must be understood and actions that must be uncovered. Additionally, the entities that handle whistleblower cases often have a number of cases to investigate on limited resources. These entities seek to do a thorough investigation of each case, but often require considerable time to do so. The judicial process is, generally speaking, rather slow. However, the complex nature of whistleblower laws, coupled with the limited resources of the investigating agencies, can make whistleblower cases take a considerable amount of time.

Cases Reaching the Supreme Court

There are not a huge number of False Claims Act cases being filed in the country compared to personal injury cases or criminal cases. There are certainly many different types of cases being filed every year, and yet there are few False Claims Act cases reaching the Supreme Court every year.

False Claims Act cases are generally big cases with very sophisticated defendants who are potentially on the hook for some serious money, and for this reason, they are willing to press on and attempt to litigate all the way to the Supreme Court as many other litigants might not be able to do. Also, because the False Claims Act is unusual law, usually involving complicated ideas and regulations, there have been quite a few Supreme Court challenges developing recently.