False Claims Act Retaliation Claim Does Not Preempt Massachusetts Wrongful Discharge Claim
Although federal whistleblower protection laws can provide robust protection against retaliation, most of them do not authorize punitive damages. Accordingly, some whistleblowers supplement statutory claims with state common law tort actions for wrongful discharge, which provide an opportunity to recover punitive damages.
While federal whistleblower protection statutes do not preempt state remedies, English v. General Electric Co., 496 U.S. 72 (1990), several states bar common law wrongful discharge claims based on public policy where the relevant public policy has already been vindicated by a state or federal statute. A recent Massachusetts district court decision in Elliott-Lewis v. Abbott Laboratories, Inc., 2018 WL 1122359 (March 1, 2018), however, demonstrates a path to pursue both a FCA retaliation claim and a common law wrongful discharge claim.
Elliott-Lewis’ False Claims Act Retaliation Claim
Elliott-Lewis brought suit under the anti-retaliation provision of the False Claims Act (FCA) alleging that Abbott Laboratories (Abbott) terminated her employment in retaliation for her internal complaints about pre-approval promotion of a drug-eluting stent for use in treating coronary and peripheral vascular disease and off-label use of XIENCE stents. She also brought a wrongful discharge claim alleging that she was terminated for voicing concerns about regulatory violations, which she believed in good faith to be criminal violations.
Wrongful Discharge Claim Grounded in Public Safety Regulations is Distinct from Public Policy Vindicated by the False Claims Act
Abbott moved to dismiss the wrongful discharge claim on the basis that it was foreclosed by the False Claims Act whistleblower retaliation claim to the extent that the public policy claim was based on the alleged reporting of a false claim for payment. Elliott-Lewis argued that the state law claim was grounded on a different public policy — retaliation for her reports concerning public welfare, as protected by regulations prohibiting pre-approval promotion and off-label promotion. And under Massachusetts’ common law wrongful discharge exception to employment-at-will, employees are protected for reporting, resisting or refusing “to participate in activity that presents a threat to public health or safety.” The court agreed that Elliott-Lewis’ wrongful discharge claim was grounded in a policy distinct from the public policy embodied in FCA, and therefore permitted her to proceed with both claims.
Implications for False Claims Act Whistleblowers
Although the FCA’s anti-retaliation provision authorizes double back pay and uncapped special damages (damages for emotional distress and reputational harm), the statute does not authorize an award of punitive damages. It essentially provides “make whole relief” to the whistleblower. Where a whistleblower can also prosecute a common law wrongful discharge claim (a tort claim), the whistleblower can potentially recover punitive damages. Elliott-Lewis is a helpful example for FCA whistleblowers as to how to plead a wrongful discharge claim that is not foreclosed by an FCA retaliation claim.