Most qui tam actions are brought by employees of a company that has defrauded the government. Many employees who know of fraud committed by their employers are reluctant to come forward with information about that fraud, for fear of the possible actions an employer might take in retaliation. Fortunately, federal laws known as "whistleblower" laws carry protections for employees who report fraud on the part of their employers.

Whistleblower Protection

One reason the law requires that complaints in qui tam actions be filed under seal is to protect the identity of the person who brings the complaint. The person's identity will remain secret as long as the case is under seal. However, a whistleblower's identity probably will not remain a secret forever. Employers may deduce the identity of the whistleblower from the questions asked during the investigation, or from the subject of the investigation. If the employee tried to resolve the fraud by internal means within the company, he or she might be identified as the source of the investigation. Furthermore, if the qui tam action is pursued beyond the investigation stage to litigation, the complaint will be unsealed, and the identity of the person making the complaint will be revealed.

When a whistleblower's identity is revealed, it is not unusual for the whistleblower to be harassed or ostracized by management and by fellow employees. Even sympathetic co-workers are often reluctant to associate with someone who has fallen so far out of favor with management. Many whistleblowers have also found themselves demoted, denied promotions or pay raises, suspended, or even fired.

Federal law prohibits employers from taking any action against employees in retaliation for filing a suit under the False Claims Act. "Any action" means demoting, suspending, terminating, or "in any other manner discriminat[ing] against [the employee] in the terms and conditions of employment . . . ."

In order to make a case that an employee was the subject of retaliation for being a whistleblower, the employee needs to show the following facts:

1. He or she was engaged in activity protected by the False Claims Act, in pursuing a qui tam suit;
2. The employer knew about the employee's qui tam action; and
3. The employer retaliated against the employee because of that action.