Supreme Court to Hear Appeal of KBR over False Claims Act Lawsuit


Last week, the Supreme Court granted certiorari in the case of Kellogg Brown & Root Services v. U.S. ex rel. Carter, adding another appeal involving a whistleblower to its schedule in the fall. The petition initiated by KBR asked the Court to review the appropriate statute of limitations and the application of the first to file bar in False Claims Act litigation.

The history of the case is a bit unusual. Benjamin Carter, the relator who worked for the defendant in Iraq, filed a qui tam complaint in 2006. The complaint was amended in 2008 to include allegations of false billing for labor costs. This complaint was dismissed by the district court because of similar allegations in a pending relator complaint filed prior to Carter’s allegations.

As those familiar with the False Claims Act are aware, the statute bars a person from bringing a “related action based on the facts underlying the pending action.” 31 U.S.C. § 3730(b)(5). This is commonly known as the “first to file” bar.

While on appeal, the complaint by the other relator was dismissed. Carter filed a new complaint in 2010. However, since his 2008 appeal was still pending, the new complaint was dismissed because of his own pending appeal. Strategically, Carter dismissed the appeal of the 2008 complaint.

By the time Carter refiled his complaint, another relator had filed against the company with similar allegations. The district court held that this pending complaint barred Carter’s latest complaint. Because a significant amount of time had passed since the events underlying this litigation, the district court also held that most of the allegations were now barred by the statute of limitations of the False Claims Act, set forth in § 3731(b).

Carter appealed successfully to the Court of Appeals. The Fourth Circuit held that the statute of limitations in the case was tolled by the Wartime Suspension of Limitations Act (WSLA). It also authorized him to refile his complaint because there were no other pending actions.

The defendant now contests those issues on appeal.

It contends that the WSLA applies solely to criminal cases brought by the government. It makes three key arguments:

1. The WSLA does not apply to civil fraud cases where the U.S. government is not a party;

2. The WSLA does not apply when the government has not formally declared war; and

3. The WSLA does not modify the ten year statute of repose in the False Claims Act. In other words, the WSLA does not indefinitely toll the statute of limitations.

The Supreme Court will also review whether a previous lawsuit, not dismissed on the merits, bars a subsequent relator from filing a qui tam lawsuit because of the “first to file” requirement of the False Claims Act. The defendant contends dismissal is appropriate because the government has already been put on notice of the fraud.

KBR is the second case involving a whistleblower to be scheduled by the Supreme Court. In May, it agreed to hear the appeal of Homeland Security in the case of TSA air marshall Robert MacLean, Department of Homeland Security v. MacLean. MacLean informed the media that the TSA had discontinued posting air marshals on certain overnight flights because of budget concerns despite an alert about a plot to hijack airlines. He was terminated when the TSA learned of his role blowing the whistle. The Federal Circuit Court of Appeals sided with MacLean in his retaliation claim under the Whistleblower Protection Act.

The Supreme Court has already weighed in on two cases involving whistleblowers this year.

A few weeks ago in June, the Supreme Court decided Lane v. Franks. Lane, in his capacity as director of a statewide program for underprivileged youth, terminated an individual on the payroll that had not been reporting to her office. Subsequently, Lane was compelled to testify in the ex-employee’s criminal trial. He alleged that he was terminated in retaliation for the testimony. In a 9-0 opinion written by Justice Sotomayor, the Court held that the First Amendment protects a public employee providing truthful sworn testimony, compelled by subpoena, outside the course of the employee’s ordinary job duties.

In March, it extended SOX protections against retaliation to whistleblowers who work at private contractors to public companies in Lawson v. FMR LLC. The decision reversed the First Circuit decision denying protection to two employees of a privately held financial institution providing services to mutual fund clients.

Canada to Pay Some Tax Whistleblowers; Australia Report Suggests Rewards


Although the whistleblower programs in the United States gets a lot of attention, the U.S. isn’t the only country to have a program to pay informants about corporate misconduct.

Earlier this year, Canada followed the lead of the United States and started offering rewards for tax whistleblowers. The Canada Revenue Agency will pay for tips about international tax noncompliance through its Offshore Tax Informant Program. The program allows for an award of between 5 and 15 percent when more than $100,000 in federal taxes are collected.

The initial process for providing information to Canada is a bit different than here in the United States. Submitting information to Canada starts with an initial call to their hotline to discuss the information the caller can provide. If the information is of the type that they are interested in, they provide the caller with a case number to include on the cover letter of their written submission.

International Antitrust Awards: Four countries pay for information when the United States doesn’t!

In our research, we discovered that Canada isn’t even the first country outside of the United States to pay for tips. Several members of the international community have adopted rewards programs in an area where the United States does not have one: antitrust. South Korea, United Kingdom, Hungary and Pakistan all pay informants for information about cartels engaged in price fixing. Strangely, this is an area where the United States does not pay. The United States investigated the wisdom of creating a program to pay for information about cartels, but there was substantial internal skepticism. Government employees were concerned that the prosecution could not meet the high burden of proof in a criminal case if the defendant could accuse the informant of bias because of the potential reward.

Australia May Be Next to Pay: Australian Senate Committee Recommends Corporate Regulator Explore Incentives.

The Economics References Committee (“Committee”) of the Australian Senate recently released a report on the Performance of the Australian Securities and Investments Commission (ASIC), their version of the Securities and Exchange Commission (SEC). In the report, the Committee recommended exploration of incentive-based compensation for whistleblowers either by allowing qui tam lawsuits or establishing a reward program similar to the SEC.

Because of the growth of the financial sector in Australia, the Committee examined the performance of their financial regulator. Two case studies it relied upon left it with the firm impression that ASIC had limited resources and power. These limitations may have played a role in allowing misconduct to happen at Commonwealth Financial Planning Limited (CFPL) between 2006 and 2010. The Committee also concluded that ASIC was too slow to act on information provided by whistleblowers about fraud happening at CFPL. The report spends nearly 100 pages of the roughly 500 page report on ASIC’s investigation and enforcement action against CFPL.

Among the suggestions it explored to improve the office was its handling of whistleblowers. Australian law offers protection to certain private sector employees who reveal information about violations of the Corporations Act to the Australian Securities and Investments Commission. But news stories broke in 2013 about the inability of ASIC to protect whistleblowers and consumers after issues were discovered at Commonwealth Bank.

The time may be ripe for Australia to implement this. According to the research cited in the report, the public there overwhelmingly supports whistleblowers. The country is also fresh off the implementation of its Public Interest Disclosure Act (PIDA), adopted last July to protect public sector employees reporting suspected legal violations. The law went into effect earlier this year, setting procedures and protections for government employees to internally and externally disclose waste, fraud and safety issues.

Two of the concerns about the PIDA was that it didn’t cover private sector employees and didn’t provide incentives for whistleblowers to come forward. It now looks like Australia will begin the process of correcting those deficiencies.

United Kingdom Passes on Rewards For Now

Last month, the United Kingdom released its response to the Whistleblowing Framework Call For Evidence and said that it did not believe financial incentives were needed. The effect of this decision is somewhat limited. Both the Financial Conduct Authority and the Prudential Regulation Authority are still considering whether they should implement an incentive program.

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Government Intervenes in $100 Million Best Price Lawsuit Against CA.


Last week, the government intervened in a whistleblower lawsuit brought under the False Claims Act against CA Technologies, an IT software provider headquartered in New York. CA is accused of overcharging government customers for software under the terms of its “best price” contract with the General Services Administration.

The federal government requires suppliers to give them the same price and discounts they offer to other large customers or explain the reasoning behind any price discrepancy. During contract negotiations, they must provide information about their pricing policies. If, after entering into a contract with the government, the company provides larger discounts to their commercial customers, they are required to pass on those discounts to the government as well.

Instead, CA increased their discounts to commercial customers without telling the government about the lower prices they were charging. According to the lawsuit, a private sector customer paid $3,400 for a software license that the federal government was charged $34,487.

Dani Shemesh, an ex-employee of CA Israel Ltd., tipped the government off to the larger discounts. If the government successfully recovers money as a result of the allegations, Shemesh may be entitled to between 15 and 25 percent of the recovery as a whistleblower pursuant to the False Claims Act.

A Quick History of Best Price Litigation

There has already been one settlement this year of a case involving a company that failed to give a government body their best price. Office Depot paid $475,000 to settle allegations brought under the New York False Claims Act that it overcharged state government entities in New York. The contract required the office supply store to charge New York no more than it charged the U.S. government under its GSA contract.

In 2011, Oracle settled similar allegations related to their pricing and discounting policy with the Government. The settlement, $199.5 million, was the largest by a company for failure to meet the obligations of a contract with GSA. The whistleblower, a former Oracle employee, received $40 million for initiating the qui tam lawsuit.

The largest settlements for this type of litigation have been collected for Medicaid fraud. The Medicaid Rebate Statute requires pharmaceutical manufacturers to report prices to the government to ensure that Medicaid is not being overcharged. Drug companies have paid hundreds of millions to resolve allegations of overcharging and misreported prices.

New York Considering Awards for Bank and Insurance Industry Whistleblowers


Whistleblowers at banks and insurance companies may have another option to receive compensation for reporting misconduct if legislation written by two New York State Senators is ultimately adopted. Last year, State Senators James Steward (R-Milford) and Joseph Griffo (R-Rome) introduced a bill, S4362, into the New York State Senate to compensate and protect individuals providing information to the New York State Department of Financial Services (DFS). It offers eligible whistleblowers between 10 and 30 percent of monetary sanctions imposed in a covered judicial, administrative or related action.

Details of the Legislation

The bill models the DFS program after the Securities and Exchange Commission program created by the Dodd-Frank Act. Unlike the procedure under New York’s False Claims Act, an individual would not need to file a qui tam lawsuit to become eligible for a reward. Instead, there would a tip submission procedure for informing DFS. Following a successful enforcement action based on the information, an award would be issued to an eligible individual upon submission of a valid claim form.

The legislation also takes steps to protect the identity of whistleblowers. It permits anonymous filing of claims for awards and does not allow the release of any information which could reasonably be expected to reveal the identity of a whistleblower “unless in the judgment of the superintendent the ends of justice and the public advantage will be served by release of such information.”

It prohibits retaliation against employees, contractors and agents. If discrimination happens, remedies for the individual include two times back pay and special damages such as litigation costs and attorneys’ fees. Perhaps more importantly, it explicitly includes hiring decisions by prospective employers in the future. If an employer refuses to hire an individual who has acted as a whistleblower under the law, they may be required to hire the employee to the position or an equivalent one.

The bill also limits attempts by companies to hamper the effectiveness and purpose of the program through employment agreements. It specifically bars waiver of whistleblower rights and remedies in pre-dispute arbitration agreements or in severance packages. It also eliminates efforts to clawback wages or consideration from the severance package. This has been an issue that has arisen from the Dodd-Frank Act because some have argued that only prospective waivers are limited, rather than existing claims.

Rewards for Violations at Financial Institutions

The bill is timely as DFS has been involved in several major enforcement actions, including BNP Paribas and Credit Suisse. The Department of Financial Services was created in 2011 when the functions and authority of the New York State Banking Department and the New York State Insurance Department were transferred to it. Given its role overseeing the conduct of banks operating in New York, the bill could lead to payouts for information in amounts rivaling the largest made by the United States government.

Significantly, it would provide individuals with information about financial institutions violating economic sanctions and anti-money laundering laws an opportunity to be compensated when New York sanctions them. The DFS has played a leading role in the investigation of BNP Paribas, the French bank that is accused of violating sanctions against Iran and may be fined up to $10 billion by U.S. authorities.

The legislation would provide another avenue for whistleblowers to report offshore tax evasion facilitated by a financial institution operating in New York. Currently, individuals who desire compensation report these cases to the Internal Revenue Service, which already has its own program for compensating informants. In the recent settlement by Credit Suisse, $715 million out of the $2.6 billion to be paid was earmarked for DFS.

Incentives for Reporting Violations of Insurance Laws

Employees in the insurance industry with operations in New York should take note, because DFS regulates conduct by insurance companies as well. The bill specifically includes enforcement actions that result from a company acting in violation of an insurance law. What types of insurance cases might the New York regulator be interested in if the law is passed?

DFS has pursued multiple enforcement actions recently where an insurance company was charging rates out of line with actual loss ratios. In 2013, New York settled with multiple force-placed insurance companies, including Assurant, QBE, Balboa and American Modern, for violating the state’s insurance law. Among the accusations was that actual loss ratios were far below the expected loss ratios filed with New York.

Force-placed insurance is not the only area where loss ratios come into play. DFS also fined Markel Insurance Co. nearly $1 million for overcharging students for health insurance. The student health plans failed to pay out at least 65 percent of the insurance premiums on medical care.

DFS also would be interested in information about an insurance company operating in the state without the appropriate license. It received a large settlement in 2014 from an enforcement action against MetLife for two subsidiaries that inappropriately sold insurance in the state. American Life Insurance Co. (ALICO) and Delaware American Life Insurance (DelAm) violated the law while they were subsidiaries of AIG, prior to their acquisition by MetLife. MetLife agreed to pay $60 million to settle the charges.

Chances of Passage

There hasn’t been much coverage of this bill since it was introduced. Still, the leadership role taken by the Department of Financial Services in prominent enforcement actions could create momentum for the bill to aid in the discovery of other companies breaking the law. Enforcement.

SEC Rejects Late Filing of Whistleblower Claim.


If you have submitted a tip to the Securities and Exchange Commission, either as an individual or an attorney representing a client, it is crucial that you check the Notices of Covered Actions monthly. The Securities and Exchange Commission has denied another whistleblower claim because the individual did not submit it within the deadline. The denial order in Securities Exchange Act Release No. 72178 (May 16, 2014) is available at

After a successful enforcement action that results in monetary sanctions exceeding $1 million, the SEC posts a Notice of Covered Action. The whistleblower has 90 calendar days from publication of the Notice of Covered Action to file Form WB-APP. 17 C.F.R. § 240.21F-10(b).

In requiring whistleblowers to stick to the deadline, they cited two reasons. The deadline ensures “fairness to all potential claimants by giving all an equal opportunity to have their competing claims evaluated at the same time, and to bring finality to the claims process so that we can make timely awards to meritorious whistleblowers.”

Rule 21F-8(a) allows the Commission to waive the deadline “upon a showing of extraordinary circumstances.” 17 C.F.R. § 240.21F-8(a). However, it declined to do so in this case. According to the explanation, the Commission will only allow a late filing when the reason for the late filing was beyond the claimant’s control and the applicant filed as soon as reasonably practicable. Attorney misconduct or serious illness were identified as two potential justifications for granting relief from the deadline.

The Commission showed little sympathy for the claimant’s excuses for late filing, which included a lack of awareness of the existence of the whistleblower program. The number of days the claim form was late and other information that might identify the whistleblower were redacted.

For late filing whistleblowers, the Commission did leave open the possibility in footnote 5 that they might use their general exemptive authority under Section 36(a) of the Exchange Act to set aside the deadline in a future case notwithstanding the lack of a showing of extraordinary circumstances. Section 36 allows the Commission to exempt persons from any rule. It must be in the public interest and consistent with the protection of investors. However, in footnote 2, the Commission indicated that an award was unlikely for this claim even if they set aside the deadline.

For additional information about this rule, please contact one of our SEC whistleblower attorneys.

First Whistleblower Award Issued by CFTC



The Commodity Futures Trading Commission announced today that they are making a payment of approximately $240,000 to a whistleblower for information under the authority granted to it by the Dodd-Frank Act. It is the first award by the CFTC Whistleblower Program.

Additional details about the case and the individual paid were not released. They are committed to protecting the identity of people submitting tips and treat information as non-public and confidential, so we don’t expect to hear more about the specific case from them. Sometimes, based on the timing of announcements, it is possible to speculate about the underlying enforcement action. The CFTC probably collected between $800,000 and $2.4 million because of the tip.

The CFTC program receives tips about violations of its regulations and the Commodity Exchange Act. It had rejected approximately 25 applications for awards through the end of 2013.

The CFTC receives fewer tips than the other programs. It received 138 submissions of Form TCR in Fiscal Year 2013 compared to the approximately 3,000 tips received by the Securities and Exchange Commission.

The SEC paid its first award to a whistleblower in August 2012. The initial payment was for $50,000. In April, they announced payment of an additional $150,000 to the individual after collecting additional funds from one of the defendants in the case. The follow up award represented 30 percent of the $500,000 collected, the maximum the agency is allowed to pay.

The first mandatory award under 26 U.S.C. § 7623(b) by the Internal Revenue Service program went to a Young Law Group (predecessor to McEldrew Young Purtell) client of Eric Young in 2012. The client was awarded $4.5 million by the IRS.

Whistleblower accuses DuPont of Failing to Report Environmental and Health Issues


A whistleblower lawsuit filed under the False Claims Act accuses DuPont of failing to report a chemical leak of cancer-causing gas from a plant in Louisiana, according to The Times-Picayune.

The Toxic Substances Control Act requires manufacturers, processors and distributors of chemical substances to report when a substance poses a substantial risk of injury to health or the environment. Failure to submit a report constitutes a violation of the law with a civil penalty of up to $25,000 for each day in violation.

The False Claims Act imposes civil liability for knowingly and improperly avoiding an obligation to pay money to the U.S. Government. This is known as a reverse false claims act case because it involves the avoidance of an obligation to pay rather than a wrongful payment by the federal government.

The leak of sulfur trioxide was reportedly ongoing for months. The chemical is used in the manufacturing process at the chemical plant, which is located near a residential neighborhood and school.

The lawsuit was filed by Jeffrey Simoneaux, a 22 year employee of DuPont working in the Burnside sulfuric acid plant. Simoneaux reported the leak to his superiors and says he lost out on a potential job opportunity at the company as a result.

Even though it isn’t the largest segment of cases under the False Claims Act, environmental fraud is not unusual. Past environmental lawsuits under the Federal False Claims Act have also involved false claims for payment by the U.S. Government for environmental cleanup and disposal of toxic waste.

States have also pursued false claims against companies recently for payments made in cleanup efforts. In February, Massachusetts settled a claim under the state version of the False Claims Act for false claims made by Shell Oil in the cleanup of contaminated gas stations. Shell sought and received payments from the Underground Storage Tank Petroleum Product Cleanup Fund even though insurance reimbursed Shell for the cost of the cleanup. They paid a total of $4 million to the state and cleanup fund in order to settle the case.

Young Law Group represents whistleblowers reporting fraud through the False Claims Act. If you would like a free, confidential consultation with an attorney at McEldrew Young Purtell regarding reporting fraud, please call 1-800-590-4116 or complete our contact form.

Fraud and Whistleblower News for Monday, March 31


The Supreme Court denied the cert petition in Nathan v. Takeda today. The petition questioned the Court of Appeals decision with regard to the Rule 9(b) heightened pleading requirement for fraud.

False Claims Act Against Bankrupt Companies – WSJ:Judge Gives $2.3 Billion Hawker Whistleblower Suit New Life
Whistleblowers can pursue their False Claims Act lawsuit against Hawker Beechcraft despite its bankruptcy, according to a ruling in federal court in New York. The whistleblowers alleged that the U.S. Navy and Air Force purchased more than 300 aircraft with defective parts from the company. They argued that the lawsuit was an intentional fraud and a debt to a domestic government unit that should not have been discharged. Last year, a bankruptcy judge ruled that liability from the lawsuit was extinguished by the Chapter 11 bankruptcy plan. Beechcraft was purchased by Textron following bankruptcy.

Currency Manipulation – Bloomberg: Swiss Antitrust Regulator Probes Eight Banks Over Alleged FX-Rigging
The Swiss Competition Commission, known as Weko, says it is investigating foreign exchange rate manipulation at UBS, Credit Suisse, JPMorgan Chase, Citibank, Barclays and a few other banks. At least a dozen regulators are now investigating collusion in currency trading.

Securities Fraud – CNBC: Years later, SEC fraud trial over Texas tycoons to start:
The Securities and Exchange Commission will start jury selection in New York today for the $550 million fraud trial of Samuel Wyly and the estate of his late brother, Charles Wyly. They are accused of committing securities fraud and insider trading. The SEC started investigating the Wyly brothers in 2005.

Medicaid Fraud – New York Times: Settlement in Medicaid Fraud Case Worries Health Providers
A New York Times article expresses concern that increased enforcement efforts against Medicaid providers might cause more doctors and medical practices to stop accepting Medicaid patients. The article cites a recent enforcement action against Carousel Pediatrics by the Office of Inspector General in the Texas Health and Human Services Commission. The percentage of physicians in Texas accepting Medicaid have declined substantially in the past ten years because of Medicaid rate cuts.

IRS Whistleblower Program – Pittsburgh Post-Gazette: Telling for Dollars: Tipsters get few payments in IRS program
The Pittsburgh Post-Gazette reported on the lack of rewards coming out of the IRS Whistleblower program. There have only been 38 recoveries from the 33,000 whistleblower tips the IRS received in the past five years. The IRS paid out $50 million in Fiscal Year 2013 according to the head of the IRS Whistleblower Office, although the majority of the payout went one whistleblower receiving a $38 million dollar award.

Government Receives $300 Million in Three Health Care Fraud Settlements


There have been a few notable settlements under the False Claims Act in the last month for those tracking fraud in the health care industry. Through the three lawsuits, the government has recovered more than $300 million.

Teva Pharmaceuticals and a subsidiary agreed to pay $27.6 million to resolve allegations it paid a Chicago doctor to switch to its generic clozapine, an anti-psychotic drug, rather than continue to prescribe Novartis’ Clozaril. The doctor became the largest prescriber in the country after signing a consulting agreement with Teva. The Anti-Kickback Statute prohibits payments to induce or reward the referral of business under Medicare and Medicaid.

Halifax Hospital will pay $85 million to settle claims it violated the False Claims Act and the Stark law when it billed Medicare for patients referred by nine doctors. The Stark law prohibits inappropriate financial arrangements between doctors and hospitals, including compensation for referrals. The Justice Department contended Halifax paid three neurosurgeons more than their fair market value. Halifax also provided an improper incentive bonus to six oncologists based on the value of work performed.

The settlement does not conclude the case against Halifax. The whistleblower lawsuit also alleges that the hospital unnecessarily admitted patients instead of treating them as outpatients. These allegations are set for trial in July.

At the end of February, Endo Pharmaceuticals agreed to pay $192.7 million to resolve allegations it engaged in off-label marketing of the prescription drug Liboderm. Liboderm was approved by the FDA only for the treatment of pain associated with a complication of shingles. Endo sales representatives were encouraged to suggest off-label uses of the product for other forms of pain and marketed the drug to physicians who were unlikely to see patients suffering from its approved indication, post-herpetic neuralgia pain.

Young Law Group represents health care whistleblowers reporting fraud through the False Claims Act. If you would like a free, confidential consultation with an attorney at the Young Law Group regarding reporting fraud, please call 1-800-590-4116 or complete our contact form.

Supreme Court Extends SOX Whistleblower Protections to Employees of Contractors


The Supreme Court issued a win for whistleblowers yesterday. In Lawson v. FMR LLC, 571 U.S. ____, slip op. (March 4, 2014), the Court held that the employees of privately held contractors and subcontractors reporting on a public company are protected by the whistleblower provisions of the Sarbanes-Oxley Act. At issue was 18 U.S.C. § 1514A, which protects “an employee” from adverse changes in the terms and conditions of their employment because they engaged in protected whistleblowing. A dispute had arisen about whether employees of third parties working for the public company, such as law firms and accounting companies, were also covered. Employees who work at a contractor or subcontractor of a public company can now be confident they are within the protected class when they report on misconduct at a public company which is within the scope of their employment. Justice Ginsburg’s majority opinion, however, leaves open the possibility that they will not be protected if they report on violations which are not within the scope of their contractor’s services for the public company.

The need for the Supreme Court decision arose from a difference of opinion between the Department of Labor’s Administrative Review Board in an unrelated case and the First Circuit’s decision in Lawson. On appeal, the First Circuit had held that the plaintiffs were not covered because SOX protections extended only to adverse employment actions against employees of the public company.

The plaintiffs in Lawson reported misconduct at a mutual fund. They did not work for the mutual fund, however. They were employees of a private company engaged by the mutual fund to provide it investment services. After they raised concerns, one was fired and the other suffered a series of adverse actions amounting to constructive discharge. Following the required filing with the Department of Labor, they brought a cause of action in federal court to seek remedies under § 1514A.

The Supreme Court looked initially to the language of the statute. Where Congress intended to limit protections in SOX to employees of the public company, it said so. The Court also struggled with how a contractor could take adverse actions and remedy discrimination against the public company employees before concluding the text was not limited to them.

Justice Ginsburg’s majority opinion also examined the legislative history. Congress recognized the role of outside professionals both in perpetrating shareholder fraud and in reporting it. Because of the importance of lawyers and accountants in Enron, the majority could not conclude Congress intended to exclude these professionals from protection against retaliation. As Congress investigated Enron, one of the things it found was retaliation by contractors against their own employees for flagging misconduct at Enron.

Justice Scalia, in an opinion concurring in principal part and concurring in the judgment, agreed with the reading of the text but rejected the use of the legislative history. Interestingly, Scalia, and presumably Justice Thomas, who joined in the concurrence, would not limit the protection of contractor and subcontractor employees to whistleblowing related to the role in which they were hired by the public company. The Solicitor General offered this contention as a limiting principle in oral argument and it was cited to in the majority opinion.

McEldrew Young Purtell helps whistleblowers report fraud and misconduct to the government through the SEC, CFTC and IRS whistleblower programs as well as the False Claims Act. If you would like to speak to Eric L. Young or another attorney at McEldrew Young Purtell about whistleblower protections from retaliation, please call 1-800-590-4116 or complete our contact form.

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