Members of government agencies often ask us whether their employment by the government impacts whether they can serve as a whistleblower in a qui tam case under the False Claims Act (“FCA”)?
Unfortunately, the short answer is “maybe.” Government employees can certainly serve as whistleblowers. In fact, no court has ever held that the FCA bans qui tam suits by current or former government employees. See United States v. A.D. Roe Co., 186 F.3d 717, 722 n. 5 (6th Cir. 1999) (“[N]o court has accepted the argument that government employees per se can never be relators in a qui tam action.”). But, as we’ll discuss later, there are some limitations on the types of claims that government employees can bring.
The False Claims Act does not bar Qui Tams by Government Employees
In 1991, shortly after the modern version of the FCA was signed into law, the Eleventh Circuit directly addressed the issue of a government employee acting as a whistleblower in a case captioned U.S. ex rel. Williams v. NEC Corp., 931 F.2d 1493 (11th Cir. 1991). The Court found that “nothing in the False Claims Act prohibits a government employee from filing a qui tam action based upon information acquired while working for the government.” Id. at 1494.
In that case, Williams was an attorney for the Air Force who “[d]uring the course of his employment with the government, … became aware of bidrigging on the part of a corporation seeking telecommunications contracts with the United States.” Id. at 1494. The case was initially dismissed because the trial court found that the FCA contained a jurisdictional bar against cases brought by government employees based upon information acquired in the course of their employment. Id.
The whistleblower appealed and the Eleventh Circuit eventually reversed, determining that the case should have been allowed to go forward. To reach this conclusion, the appellate court first found that no public disclosure had occurred prior to the whistleblower filing suit, which means that the whistleblower did not need to establish that he was an “original source” of the information on which his suit was based (more on this below). Id. at 1499–1501. The court then rejected the government’s argument that “the comprehensive bar against qui tam suits by government employees in the 1943 version of the [FCA] was never repealed by the 1986 amendments.” Id. at 1501.
In particular, the court concluded that “[t]he structure of the 1986 version of the Act and several basic canons of statutory interpretation make it clear that no such general prohibition any longer exists.” Id. at 1502. Finally, the court rejected the government’s various public policy arguments “that Congress intended to bar government employees from initiating qui tam suits based upon information acquired in the course of their government employment.” Id. at 1503.
The FCA’s public disclosure provisions have been amended in the 25 years since the Williams decision, but it has never been changed to wholly exclude government employees from being whistleblowers. In that time, each court that has evaluated the issue has found that the FCA does not automatically exclude government employees.
Government Employees’ Claims may be Barred in Certain Situations
However, in cases where the information had already been publicly disclosed— and therefore the whistleblower must qualify as an “original source,”— courts have barred claims by government employees whose specific job duties compelled them to disclose the fraud.
A recent example comes from the Eastern District of Kentucky in a case where two Social Security Administration (“SSA”) employees reported that a social security lawyer was conspiring with an administrative law judge to rig cases in favor of his clients to the detriment of the government. U.S. ex rel. Griffith v. Conn, CIV. 11-157-ART, 2015 WL 779047, at *1 (E.D. Ky. 2015).
The district court judge first aptly summarized the general issue of whether a government employee could be a whistleblower:
When you work for the government and discover wrongdoing in your midst, may you recover as a whistleblower under the False Claims Act? On the one hand, why not? After all, government employees are often the individuals best positioned to discover wrongdoing in the public sector. Reducing their incentives to report fraud may mean that egregious wastes of taxpayer dollars go unnoticed. On the other hand, government employees work on behalf of the public. As a result, they often have an underlying obligation to report fraud. And it does not seem fair to reward individuals for simply doing their job, which they are already paid to do.
The court went on to limit the government employees’ ability to bring their claims by noting that both whistleblowers conceded that the information they reported had been publicly disclosed such that they needed to qualify as “original sources” in order to go forward. To qualify as an “original source,” the whistleblowers must
- have direct and independent knowledge of the information on which the allegations are based; and
- voluntarily provide that information to the Government before bringing suit.
31 U.S.C. § 3730(e)(4)(B).
Focusing on requirement #2, the court found that the whistleblowers did not “voluntarily” provide the information to the government during their employment because they were bound to report the fraud by a “Hearings, Appeals, and Litigation Law manual” and their specific job description. The court explained that the whistleblowers “did not need the additional incentive of a qui tam suit to disclose fraud because, in return for their salary from the SSA, [the whistleblowers] were expected to follow those rules and report fraud if they saw it.” Id. at *7.
Fortunately for one of the whistleblowers, the court went on to find that the reports that were made after she resigned from the SSA were voluntary because she was no longer bound by the manual or job requirements. Consequently, she was permitted to proceed with all of her claims.
Just to be clear, both whistleblowers in that case were permitted to proceed on their claims arising after Congress amended the FCA in 2010 to give the government authority to oppose dismissal and allow qui tam complaints to proceed despite public disclosures. The government exercised that authority in U.S. ex rel. Griffith v. Conn for both whistleblowers’ post-amendment claims.
Still, the case highlights an obstacle that government employees can face when bringing a qui tam case under the False Claims Act and is a reminder that government employees should seek experienced whistleblower attorneys if they are considering a case.