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Key Factors in the Rise of Whistleblower Claims

It’s not only about the money

Posted by Jared Jacobson on July 16th, 2014

Whistleblower cases have skyrocketed in the past few years. To the layperson, which is a fancy word for “non-lawyer”, simply stated, whistleblowing is speaking up against activity that one reasonably believes is either against the law, a regulation or a public policy. The definition varies depending on state laws as well as various federal laws.

Very often an individual will be protected against retaliation if s/he “blows the whistle” properly and the conduct which was the subject of the whistleblowing is protected, i.e., the law protects the person from being retaliated against. This protection encourages whistleblowers to come forward, along with some financial rewards for doing so, discussed below.

Whistleblower Legislation

Some examples of laws that address whistleblowing include:

  • Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd Frank”)
  • Sarbanes-Oxley Act (“SOX”)
  • False Claims Act
  • New Jersey Conscientious Employee Protection Act (“CEPA”)

Many of these whistleblower laws have anti-retaliation provisions in them as well.

Forums for Whistleblower Claims

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As noted above, the anti-retaliation provisions of whistleblower laws allow a whistleblower to bring a claim against the company for retaliating against them.  Such claims can be brought in state court, federal court or pursuant to various whistleblower programs. Depending on the nature of the complaint, it is important to work with a whistleblower attorney who knows how long a person has to “blow the whistle”, and in what forum to do so, for example:

  • federal court and the United States Attorney’s Office
  • state court
  • Occupational Safety Health Administration (“OSHA”)
  • Internal Revenue Service

These are some examples of where whistleblower claims and retaliation claims may be brought which will depend on the specific circumstances.

To put whistleblowing into perspective, a few simple examples may be instructive.

Whistleblower Examples

Let’s say an employee works for a company that provides services to the federal government. At one point, the employee learns that the services are not being provided as they should be and a condition of that company getting paid by the federal government is that the services be performed a certain way. Very often, the federal government (or relevant federal agency) will require the company to “certify” that it has met certain standards as a condition of getting paid.

Let’s say further that the company is intentionally not performing the services that specified way because it would cost the company more money to do so and, therefore, they would make less money on the relationship. If an employee, independent contractor, accountant, compliance person, etc., reports such fraud to the United States Government (note:  this is normally done through a whistleblower attorney), such person is then protected from being retaliated against by the company if/when the company learns that s/he “blew the whistle”.  This example is a case that would fall under the False Claims Act, Qui Tam provisions, which allows a private person to bring a claim on behalf of the United States Government.

Another example may include a person working for a publicly traded company who is privy to some wrongdoing by the company, whether it be to gain an advantage in the securities markets or to skimp out on compliance requirements to save money, this is also conduct that may be subject to whistleblowing and may be protected activity if brought to light.

Other examples include companies that have defense contracts with the U.S. Government, ambulance companies that improperly bill Medicare and Medicaid for medically unnecessary patient transport, abuse in nursing homes (including certifying to Medicare or Medicaid that patients were treated with a certain standard of care or that a physician physically saw a certain number of patients and signed off on their charts, when either or both of these facts are untrue) , any other type of fraudulent billing of a government entity (most prevalent in Medicare and Medicaid).

Reasons Employees and Others Blow the Whistle

Why may someone choose to blow the whistle? There are several reasons  and they often include:

  1. being fed up with their boss/company and they no longer wish to have their company perpetrate a fraud on the government or other parties
  2. they want revenge on their employer (not the best reason, but often the case) because s/he was treated poorly by his/her employer and s/he has no other legal cause of action against such employer
  3. the potential financial incentive to bring to light the fraud.

Recoveries for whistleblowers can range from several hundred thousand to several hundred million, depending on the case. The average recovery for a whistleblower is approximately 18 per cent. This number can vary based on a large number of factors. So it is no secret why the number of False Claims Act cases is on the rise. Terminations from employment, upset employees, large incentives to those brave enough to come forward with direct knowledge of the fraud, are all key factors in the rise of whistleblower claims.


Jared Jacoboson
Jared Jacoboson

Attorney and founder of The Law Firm of Jacobson & Rooks, LLC

Jared Jacobson is one of the founding members of The Law Firm of Jacobson & Rooks, LLC. Jared Jacobson represents individual employees and executives as well as counsels employers in conducting workplace investigations to mitigate risks of employment and whistleblower litigation. Jared regularly performs human resource audits to ensure compliance with state (PA, NJ and NY) and federal discrimination, misclassification and wage and hour laws, as well as the risks associated with whistleblowers. Jared helps his clients understand the importance of investing in pre-emptive annual policy audits and work-place training as well as performing a proper investigation when a complaint is filed or threatened which can be invaluable when compared with the alternative.

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