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False Claims Act Does Not Protect An Employee’s Disclosing His Whistleblower History

On October 20, the United States District Court for the Southern District of Ohio found that the False Claims Act (“FCA”) did not protect an employee who was fired after revealing his history as a whistleblower and offering to help his new employer prevent overcharges on a government contract.  The court held that the employee failed to state a claim under the FCA because he did not act “in furtherance of” efforts to stop one or more specific or potential FCA violations.

The plaintiff, Darrell Kem, started working as a Senior Program Analyst on July 1, 2013 for Bering Straits Information Technology (“BSIT”), a defense contractor working at the Defense Supply Center (“DSC”) in Columbus, Ohio.  Ten days after he began his employment with BSIT, Mr. Kem volunteered to help BSIT prepare for an audit led by the DSC’s Inspector General.  Mr. Kem informed his supervisor that he previously conducted an audit of a different defense contractor and “blew a whistle on over charging.”  Soon after, BSIT revoked Mr. Kem’s security clearance and, on August 22, 2013, terminated his employment because he did not have the clearance necessary for the position.

In his complaint, Mr. Kem alleged that BSIT terminated his employment “out of fear he would discover his employer or another party affiliated with the Defendant engaged in fraudulent billing activity and report it to the government.”  He claimed that BSIT acted unlawfully by terminating his employment “because he volunteer[ed] to help an employer prevent defrauding the United States government.”

The court, however, ruled that the FCA did not protect the plaintiff’s conduct and, accordingly, granted BSIT’s motion to dismiss.  The court explained that “the most Plaintiff alleged . . . is that he expressed an interest in helping BSIT prepare for an audit and that he was uniquely qualified for that role based on his past audit experience.  Such conduct is analogous to expressing an interest in a compliance position, which common sense dictates is not protected activity within the plain language of [the FCA].”

After a long line of decisions expanding the FCA’s protections, this decision properly found that an employee does not engage in protected activity merely by offering to help a contractor avoid potential violations.

© 2017 Proskauer Rose LLP.

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About this Author

Connie N Bertram, Labor, Employment, Attorney, Proskauer Rose, law firm
Partner

Connie N. Bertram is a Partner in the Labor & Employment Department, resident in the Washington, DC office. Connie is the head of the DC Labor & Employment practice, and co-head of the Whistleblowing & Retaliation, and Government Regulatory Compliance and Relations Groups.

Connie concentrates her practice on labor and employment, executive, whistleblower, government contractor and employee mobility counseling and litigation. She is frequently tapped to conduct confidential internal investigations involving executive-level employees, including claims of...

202-416-6810
Daniel J Davis, Proskauer Law Firm, Labor Employment Attorney
Special Counsel

Daniel J. Davis is Special Labor & Employment Law Counsel in the Labor & Employment Law Department, resident in the Washington, DC office. He represents employers in a range of employment and labor issues, including equal employment, whistleblower and wage payment laws administered by the Department of Labor, Equal Employment Opportunity Commission, and National Labor Relations Board. He litigates class and collective claims, including claims under Title VII, the ADEA, ERISA, NLRA and the FLSA. He represented The Boeing Company in a high-profile case by the National Labor Relations Board regarding Boeing’s decision to open a plant in South Carolina. 

202-416-6815