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Whistleblowing, Public Policy, and Retaliation: Part 1 of 3

On Behalf of | Nov 10, 2011 | Whistleblowing

The Federal False Claims Act (“FCA”) creates a whistleblowing cause of action for an employee who feels retaliated against for “blowing the whistle” on the employer’s illegal activities. Additionally, Ohio has a whistleblower statute and provides protections to at will employees under the public policy laws. But what do these protections really mean? Many employees misunderstand the protections of the FCA and Ohio’s laws. This post will address the protections afforded to employees under the FCA’s qui tam provisions and compare it to Ohio’s whistleblower statute. My next post will address retaliation for making such reports. Finally, I will discuss Ohio’s public policy exception to at will employment.

Under the False Claims Act, individuals are given standing to sue on behalf of the government and themselves. This is called a “qui tam” action. The FCA imposes liability on a person or entity for improperly receiving payments from the government or avoiding payments due the government. (This does not include tax fraud.) The key to an FCA claim is federal funds. The entity must be committing a fraudulent or false act that causes unjustified payment of federal dollars to the entity, or avoidance of payment to the government. A common example is claims for reimbursement through Medicare or Medicaid and educational grants. When a “false claim” has been made, the employee then can initiate a civil action.

In contrast, Ohio’s whistleblower provision does not focus on funding. Instead, Ohio focuses on the nature of the illegal action for whistleblowing claims. The illegal act should be one (1) that the employer has the authority to correct, (2) that the employee “reasonably believes” is a criminal offense, and (3) that the employee “reasonably believes” (a) is likely to cause an imminent risk of physical harm to person or a hazard to public safety, (b) is a felony, or (c) is an improper solicitation for a contribution. Additionally, Ohio requires employees to make a verbal and written report to their employers before filing a report with an outside authority. Further, it does not give employees standing to sue their employer on the government’s behalf for the illegal acts. In other words, there is no state qui tam action. There is an anti-retaliation provision that gives employees the right to sue their employer, but this will be discussed in the next post in this series.

To “blow the whistle” on their employer, employees must take great precautions in the steps preceding the lawsuit or outside report. As previously stated, under Ohio’s whistleblower law, employees may make an outside report to the appropriate authority only if they have already made a verbal and written internal report to their employer and given it an opportunity to “right the wrong.” In order to preserve the retaliation claim they may arise as a result of the external report, employees must be vigilant in following the appropriate procedures in making reports. Under the FCA, employees initiating a qui tam action should provide the information about the violation to the government before filing. Additionally, the complaint must be filed “under seal” and “in camera.” This means that special procedures govern the filing of the complaint so that it is kept secret from the employer while the government has time to review the evidence and decide whether it wants to intervene in the suit, which happens in a minority of the cases.

Whistleblower actions are highly technical and require a great deal of preparation before the right to sue is perfected. This is especially true under Ohio’s whistleblower law, which does not establish a cause of action unless the employee was retaliated against for making the report. The anti-retaliation provisions will be discussed in my next post in this series.

By: Chelsea Long