False Claims Act Retaliation Law Does Not Preempt State Wrongful Discharge Claims
In Salazar v. Monaco Enterprises, Inc., a Washington federal judge held that the whistleblower protection provision of the False Claims Act is not an exclusive remedy for an employee of a government contractor who is discharged for reporting fraud on the government, and therefore the whistleblower can also bring a state law claim of wrongful discharge.
The court relied on decisions from several jurisdictions holding that the False Claims Act’s anti-retaliation provision is not an exclusive remedy:
Brandon v. Anesthesia & Pain Mgmt. Assocs., Ltd., 277 F.3d 936 (7th Cir. 2002)(“There is nothing in § 3730(h) to lead us to believe that Congress intended to preempt all state law retaliatory discharge claims based on allegations of fraud on the government.”); Glynn v. EDO Corp., 536 F. Supp. 2d 595 (D. Md. 2008) (“complementary remedies do not give rise to an inference of Congressional intent to preempt”); Hoefer v. Fluor Daniel, Inc., 92 F.Supp.2d 1055 (C.D.Cal. 2000); Palladino v. VNA of Southern N.J., 68 F.Supp.2d 455 (D.N.J. June 30, 1999)(holding no congressional intent to occupy the field of retaliatory discharge to the exclusion of the states).
Salazar alleges that Monaco terminated his employment because he raised concerns about Monaco overbilling the federal government.
Impact of the Decision on Whistleblower Remedies
A prevailing whistleblower in an FCA retaliation case can obtain reinstatement or front pay, double back pay (double lost wages and benefits) and special damages, which includes damages for emotional distress and other non-economic harm resulting from the retaliation. But the FCA does not authorize punitive damages. In contrast, a common law wrongful discharge claim is a tort action and so punitive damages are available. Therefore, adding a state law wrongful discharge claim to an FCA retaliation claim can provide an opportunity to recover punitive damages. But in some states, a state common law cause of action for wrongful discharge is not available where there is an adequate statutory remedy.