Employers and Whislteblowers: Understanding the False Claims Act

The False Claims Act is legislation that was designed to help the United States recover lost resources as a result of corporate fraud when dealing with a government agency. Fraud can occur in many different manners and the law is pervasive enough to allow employees of many companies to file individual lawsuits as co-defendants of the government. Companies that operate fraudulently often do so systemically, and require employees to do the necessary work that actually implements the fraudulent process. This duty status for employees creates tenable situations, especially when the employee is aware that the activity is illegal. The claimant is often formally classified by the federal government as a whistleblower and is entitled to legal protections afforded by the law.

Things to Consider When You are a Whistleblower

It is important to consult a False Claims Act lawyer before pursuing a case against an employer so you can fully understand your rights a whistleblower. Sometimes, the “at will” employment system can be a problem for whistleblowers when they attempt to find future employment, because many companies require waiving normal defamation legal rights when disclosing information about past employers. This act, called coercion, is illegal.


Coercion is also a major component when individuals file a case against a fraudulent employer because the employer has required employee complicity through the work duty process. Employees get caught in the middle and are often fearful of termination. Whistleblowers must be recognized and protected before filing a case and therefore cannot suffer any retaliation from the employer, which sometimes occurs if a contract employee could impact the case. This is a process that any experienced and effective qui tam attorney will understand how to establish so you can be absolutely sure of your legal standing before proceeding.

What Constitutes Government Fraud?

This is a simple concept with a complicated determination. Whistleblower protections are tied to fraudulent activity by an employer that jeopardizes the employee. Company policy and corporate environment pressure can keep many potential informants from acting, and this is acceptable when the company establishes policy with other private entities. Publicly traded companies may be susceptible to claims from a potential whistleblower if they have purposely misrepresented company stability on required accounting reports for market traders to use in making investment decisions.

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The Securities Exchange Commission and the Commodities Futures Trading Commission are both authorized to move on accurate applicable information when it is delivered through the proper channels. The whistleblower is usually eligible for 15 – 25 percent of the amount of money recovered by the government. The Internal Revenue Service has its own plan, but requires the target of the fraud investigation to earn an annual minimum amount of money if they are a corporation, and at least $200,000 annually if he or she is an individual.

Qualification for qui tam standing and whistleblower protection is not automatic and requires an experienced qui tam attorney because the range of case types is very broad. All companies deal with the government on some level, so it is important to understand that immoral business practices may not necessarily be fraudulent. There is a major degree of premeditation involved in fraudulent behavior and an experienced false claims attorney can determine if the activity involves a government agency and is actually fraudulent. If you suspect fraud, speaking with a lawyer is your best first step toward resolution.


Former mediator, legal researcher and writer, Karla M. Somers contributes articles on behalf of the experienced False Claims Act lawyer team of Goldberg Kohn. These qualified attorneys specialize in lawsuits involving government fraud and whistleblowers. They understand all aspects of this type of law and can help you determine if your employer has been promoting illegal activity at your workplace.

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