Whistleblower job protection for False Claims Act and SEC and CFTC whistleblowers

Whistleblowers often face job retaliation at their workplace for reporting their concerns. This retaliation can take many forms — demotion, being fired or sidelined, being blackballed, etc.

The False Claims Act and the Dodd-Frank Act provide whistleblower protection and allow them to seek compensation when job retaliation occurs.

The False Claims Act includes an anti-retaliation provision for whistleblowers who file qui tam lawsuits or are considering filing a qui tam lawsuit. Congress recognized that whistleblowers need job protection as some may lose their jobs, be demoted or be blackballed from working in their industry.

Whistleblowers who report wrongdoing to the Securities Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are covered under the whistleblower job protections of the Dodd-Frank Act. In addition, the SEC has taken strong steps to protect whistleblowers who suffer job retaliation because of company confidentiality agreements.

Whistleblower protection under the False Claims Act

Individuals who are retaliated against because they support or pursue a “qui tam” lawsuit are protected under Section (h) of the federal False Claims Act.

The False Claims Act protects employees as well as contractors and agents against retaliation. Those who take lawful steps to investigate or bring a False Claims Act action are covered. The law says that “if that employee, contractor, or agent is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment,” then that individual can seek compensation.

If there is job or work-related retaliation, whistleblowers are entitled “to all relief necessary to make the employee . . . whole,” according to the False Claims Act. This can include reinstatement, two times the amount of back pay, interest on back pay, reimbursement of litigation costs and reasonable attorneys’ fees and compensation for special damages.

Job protection for SEC and CFTC whistleblowers

The Dodd-Frank Act prohibits employers from firing, demoting, suspending, threatening, harassing or discriminating against any individuals who provide information to the SEC or assists the SEC in an investigation.

Whistleblowers who suffer from job retaliation are entitled to reinstatement, back pay and any other damages that occurred.

The SEC has said employers may not require employees to sign employment agreements and severance agreements that discourage or impede employees from contacting the SEC with concerns. It also has said requiring employees and former employees to sign confidentiality agreements imposing pre-notification requirements before contacting the SEC is a violation of SEC rules.

Rule 21F-17 prohibits companies from taking any action to impede whistleblowers from reporting possible securities violations to the SEC. Many companies have been fined for violating that rule.

Whistleblower job protection under state laws

Many state false claims laws with whistleblower reward provisions also provide whistleblower protection with regard to jobs.

For instance, the California False Claims Act states whistleblowers are entitled to job protection if any “employee, contractor, or agent is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of his or her employment.”

Under California law, whistleblowers who are retaliated against are entitled to reinstatement with the same seniority status, two times the amount of back pay as well as interest on the back pay, compensation for any special damages and where appropriate, punitive damages. The company that violated the law also must pay the whistleblower’s litigation costs and attorneys’ fees.

Other states offer similar protection, but it varies and depends on the each whistleblower’s circumstances. For legal advice on how to protect yourself if you are a whistleblower or if you are considering filing a whistleblower lawsuit, consult with an attorney.

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