The False Claims Act (“FCA”) prohibits the submission of a false claim for payment to the United States government, or the making of a false statement to the United States government to get a claim paid by the government. Furthermore, an employee who suffers adverse employment action due to her effort to expose fraudulent conduct that would violate the FCA may pursue relief under the FCA’s anti-retaliation provision. Specifically, pursuant to 31 U.S.C. § 3730(h):
Any employee, contractor, or agent shall be entitled to all relief necessary to make that employee, contractor, or agent whole, if that employee, contractor, or agent is discharge, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment because of lawful acts done by the employee, contractor, agent or associated others in furtherance of an action under the [False Claims Act] or other efforts to stop 1 or more violations of this subchapter.
The majority of courts to consider the scope of the FCA’s retaliation provision have held that it does not apply to former employees who complain of post-termination retaliation. In particular, the Tenth Circuit Court of Appeals has held that the FCA’s retaliation provision “unambiguously excludes relief for retaliatory acts occurring after the employee has left employment.” Potts v. Cntr for Excellence for Higher Edu., Inc., 908 F. 3d 610, 618 (10th Cir. 2018).
Earlier this year, however, the Sixth Circuit Court of Appeals held that the FCA’s retaliation provision can apply to post-employment conduct, creating a circuit split over whether former employees can sue for post-employment retaliation. The Sixth Circuit rejected the reasoning in Potts and held that the FCA’s retaliation provision can apply to post-employment conduct. U.S. ex rel. Felten v. William Beaument Hosp., 993 F.3d 428 (6th Cir. 2021). Unlike in Potts, the Sixth Circuit determined that the term “employee” in § 3730(h) was ambiguous and relied on interpretation of Title VII’s retaliation provision to conclude that “the anti-retaliation provision of the FCA may be invoked by a former employee for post-termination retaliation by a former employer.” Id. at 435.
The Felten decision is currently on petition for certiorari to the Unites States Supreme Court. William Beaumont Hosp. v. U.S. ex rel. David Felten, U.S. Ct. Dkt. 21-443. William Beaumont Hospital filed a petition for certiorari on September 20, 2021 arguing that the Supreme Court’s review is “urgently warranted . . . before the inevitable flood of meritless suits begins.” The American Hospital Association, the Federation of American Hospitals, and several other state hospital associations filed an amicus brief in support of the Hospital’s petition. Therein, they argument that if the Sixth Circuit’s opinion is upheld, “it will vastly expand hospitals’ exposure to FCA-retaliation suits, sometimes years after a plaintiff left her job.” The Respondent, Dr. David Felton, filed his brief in opposition on December 17, 2021. The Supreme Court has yet to determine whether to grant cert in this case, but how the Supreme Court responds will undoubtedly have vast implications for how the FCA’s retaliation provision is applied going forward.
The attorneys at Chilivis Grubman represent both companies and individuals in connection with government investigations and False Claims Act litigation. If you have any questions related to such matters, please contact us today.