Whistleblower Case Presents Interesting Twist On Concept Of Retaliation Under False Claims Act

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Nowadays, whistleblowing is a very important issue, especially in these times of COVID-19 and in that vein, there are new and “creative” ways for employers to allegedly retaliate against employees who wish to report wrongdoing.  In a recent variation on this theme, a Contracts Manager has sued Airbus Group under the False Claims Act, claiming that the Company falsely “turned him in” to the FBI after he stated that he believed the Company’s accounting practices were suspect and, more importantly, after the Company learned that he had kept evidence of the submission of false claims to the federal government.  The case is entitled Maros Kmec v. Airbus U.S. Space & Defense Inc., and was filed in federal court in the Eastern District of Virginia.

According to the plaintiff, Airbus alleged to the FBI that he had stolen trade secrets and was using proprietary information for his own commercial enterprise, a business that oversees government compliance website.  The plaintiff claims that his ex-employer wanted to smear and destroy his reputation so that he would be less believable when he, in turn, sought to report its wrongdoing to the government.  As it turns out, the FBI never sought to prosecute the plaintiff (the Complaint alleges) and actually gave him back the materials it took from him.

A company cannot discharge or discipline employees when they seek to report illegal acts to their superiors or the government, under the False Claims Act.  An employee wronged in this way has a formidable arsenal or remedies at his or her disposal, including reinstatement and back pay and other damages.  In this case, the plaintiff charges that he advised the Company Pricing Director and General Counsel of the wrongdoing but the Company did nothing.  To the contrary, the Company started investigating the plaintiff and sought to replace him by creating a job posting for his position,

The Complaint makes the serious allegation that “Airbus knew that the contract documents and data in question were either derived from public documents and datasets, freely available on government websites, or were documents and data that Airbus executives had provided to [Plaintiff], knowing and intending that he would use the tools he had developed for his website to analyze the files for Airbus’s benefit.”  Plaintiff’s attorney stated that “Airbus’s mistreatment of [Plaintiff] for trying to correct the company’s improper practices was extremely hurtful, but it also violated clear employee protections of the False Claims Act.”

The Takeaway

For many, when they hear the word “retaliation,” the only thing they think of is someone being fired, or demoted or otherwise disciplined.  As this case makes clear, that is not the case.  There are any number of actions an employer can take that could constitute retaliation against an employee who seeks to report wrongdoing.  The lesson for employers is that any action they may want to take against an employee or concerning an employee must be grounded in objective, business-based, verifiable reasons that will withstand these types of charges.

We’ll see what happens…

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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