Perhaps the most uncomfortable position an employee can find themselves in is when they discover their employer is engaged in illegal conduct. The employee must decide whether to report the conduct and, in the process, risk their job and their livelihood. It’s not an easy decision. It’s important to understand when you can act, how you can act and whether your employer can act against you.
What is a qui tam action?
The False Claims Act is a federal law which prohibits anyone from defrauding the government. The Act is violated when a person or entity makes false or misleading statements to the government in order to either receive money to which they’re not entitled or to avoid paying money they owe. Colorado has a similar law directed specifically at fraudulent Medicaid claims.
Qui tam actions are a means of enforcing the False Claims Act. Authorized by the statute, a qui tam action is when a private citizen not only reports wrongdoing, but actually files a lawsuit against the wrongdoer on the government’s behalf. The government has the option of either joining in the suit or allowing the individual to proceed on their own. Whether it does or not, the individual can collect anywhere from 15% to 30% of damages levied if the suit is successful. This acts as an incentive to encourage people to come forward when they become aware of wrongdoing.
An employee filing a qui tam action against their employer is a common usage of the Act’s provisions, since employees are in a unique position to identify wrongful conduct. Recognizing this, the Act also prohibits retaliation by the employer against any employee who lawfully brings a qui tam action. Retaliation includes demotion, termination, harassment and threats. If an employer retaliates in spite of the Act, the employee is then entitled to file an additional lawsuit against the employer for retaliation, with damages beyond those awarded in the underlying qui tam action.