SCOTUS Petition Filed Concerning Applicability of Whistleblower Act for Actions After Termination

On Wednesday a petition for writ of certiorari was filed for the Supreme Court of the United States. The petition was filed by William Beaumont Hospital against the United States ex rel Dr. David Felten. Dr. Felten brought his case after his former employer allegedly maligned him to prospective employers after he left the hospital.

The official question presented is: “31 U.S.C. § 3730(h)(1) protects an “employee” against retaliation for trying to stop a violation of the False Claims Act.  The question presented is whether the term “employee” includes someone who is no longer an employee when the alleged retaliation takes place.”

The False Claims Act (FCA) imposes civil liability on any person or entity who “knowingly” defrauds the government. In order to encourage enforcement, Congress authorized private actors to file claims on behalf of the government or “qui tam” actions based on their direct experience of the offending behavior.

Protection for these private actors comes from a provision, the Whistleblower Act, that condemns retaliatory actions against an employee who makes these qui tam claims, including discharge, demotion, harassment, and other negative employment actions.

In this case, Dr. Felten allegedly made a qui tam claim against William Beaumont Hospital regarding the FCA. Dr. Felten also filed a whistleblower action against the hospital regarding negative actions taken during employment and termination.

Dr. Felten also accused the hospital of maligning him to future potential employers, which specified that all of the negative actions taken during this count occurring after the termination from employment.

The hospital moved to dismiss this claim as having occurred after the employment and not being subject to the whistleblower provisions. The trial court agreed, however the Sixth Circuit reversed and remanded to the trial court to reinstate this provision, inspiring this petition. The hospital argues that the clear language of the Act indicates that it covers actions taken during employment and including termination, but there is no direct language indicating that it covers actions taken after employment.

The petitioner is represented by Hogan Lovells.