Tuesday, March 27, 2007

Supreme Court Limits Employee Whistleblower Protection Further

4united_states_supreme_court_112904 One of the less understood areas of employment law revolves around the False Claims Act (FCA), which provides employees and former employees the means to whistleblow on their employers when the employer submits false or fraudulent payment claims to the United States.  In such situations, employees (who become former employee very quickly in these cases) file a qui tam suit on behalf of the public seeking to right the employer's wrong against the government.  Employees and others who bring these suits are compensated for their trouble if the suit is successful by receiving a percentage of the the recovery against their employer.

The Supreme Court today, in the case of Rockwell Int'l Corp. v. United States, 05-1272 (U.S. Mar. 27, 2007), made it harder for employees to file these qui tam suits under the FCA.  As Lyle Denniston explains on the SCOTUSblog:

The Supreme Court ruled on Tuesday, by a vote of 6-2, that a person bringing a lawsuit to recover misspent federal funds must have direct and independent knowledge of the facts behind the claim in order to be eligible to sue. The decision, written by Justice Antonin Scalia, clarified the meaning of the False Claims Act requirement that an individual bringing a so-called "qui tam" lawsuit must be able to show that he or she is the "original source" of the information about the false claim, and thus is not relying upon information previously disclosed to the public . . . .

In spelling out what [original source] means, the Court rejected the "qui tam" claim of a former employee of Rockwell International Corp. who had won a $4.1 million judgment after claiming radioactive contamination at the Rocky Flats nuclear weapons plant in Golden, Colo.

Justice Stevens, joined by Justice Ginsburg, dissented on the ground that, "the Court has misinterpreted these provisions to require that an “original source” in a qui tam action have knowledge of the actual facts underlying the allegations on which he may ultimately prevail."  Stevens would rather focus on "the information underlying the publicly disclosed allegations, not the information underlying the allegations in the relator’s complaint (original or amended), of which the relator must be an original source."

Yet another Supreme Court case, like Ceballos, making it more difficult for employees to file whistleblowing claims against their employers to protect the public.

One wonders whether employees acting in the public interest will even bother bringing such claims in the future as the Court places greater and greater obstacles in the way of their claims.



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This case is not that big of a deal. The claim that this guy prevailed on was based on facts that were published in a bunch of newspaper articles. That is not usually the case in the FCA cases. Most of the time an ee knows something that no one outside the co. knows, and the original source/public disclosure rule doesn't even apply.

Posted by: MacKenzie | Apr 3, 2007 10:20:20 AM

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