Ethics in False Claims Act Qui Tam relators personal claims offense and defense

False Claims Act Qui Tam Litigation: relators ‘ personal claims Taxpayers Against Fraud Education Fund Conference Panel Presentation –October 3, 2018  Jason Marcus, Bracker & Marcus LLC, Panel Chair Avi Kumin, Katz, Marshall & Banks, LLP Ann Lugbill, Murphy Anderson PLLC Robin Potter, Potter Bolanos LLC

Constructive Discharge; Pain, Suffering, and Emotional Distress; What to Allege? Title VII-Sex, Race, National Origin, Color, Religion; ADEA & Disability Discrimination; FLSA and other Wage & Hour Claims; and especially the Retaliation Statutes; Whistleblower Protections for Government Contractors Employees-Fair Pay and Safe Workplaces Executive Order/Executive Orders re Federal Government Contractor Minimum Wage & EEO Reporting/ NDAA Amendments Providing Retaliation Protection for Defense Contractor Employees; False Claims Act Retaliation Statute 3730(h); State Whistleblower Statutes & Public Policy Common Law Theories; State Breach of Contract; Defamation & Slander; State Breach of Duty of Good Faith; Intentional Infliction of Emotional Distress; Constructive Discharge; Pain, Suffering, and Emotional Distress; and Many More.

Common Employment Retaliation Claims for Relators National Defense Authorization Act for Fiscal Year 2016 (NDAA) / Defense Contractor Whistleblower Protection Act Sarbanes-Oxley Act of 2002 (SOX) Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 Wrongful Termination in Violation of Public Policy

2013 National Defense Authorization Act (NDAA) “Enhancement of Whistleblower Protections for Contractor Employees”

2013 NDAA Amendments – Retaliation Prohibited Contractors and subcontractors are prohibited from discharging, demoting, or otherwise discriminating against an employee as a reprisal for disclosing, to any of the entities listed… information that the employee reasonably believes is evidence of gross mismanagement of a Federal contract, a gross waste of Federal funds, an abuse of authority relating to a Federal contract, a substantial and specific danger to public health or safety, or a violation of law, rule, or regulation related to a Federal contract….

2013 NDAA Amendments – Disclosures Protected from Retaliation Qualifying “disclosures” to: * Member of Congress or congressional committee representative; * Inspector General * Government Accountability Office (GAO) * Federal employee responsible for contract or grant oversight or management at the relevant agency * Authorized official of the DOJ… or law enforcement agency * Court or grand jury * Contractor, subcontractor, or grantee manager or employee with “responsibility to investigate, discover, or address misconduct.” Interim Rule 3.908-3

DCWPA / NDAA Retaliation 10 U.S.C. § 2409, 41 U.S.C. § 4712 Covers: employees, contractors, and subcontractors of government contractors Protected activity: includes disclosures related to a federal contract or grant of – Gross mismanagement, gross waste of funds, or abuse of authority Violation of law, rule, or regulation Danger to public health or safety Causation standard: plaintiff proves that protected activity a “contributing factor” to adverse action; burden then shifts to defendant to prove by “clear and convincing evidence” that it would have taken the same action notwithstanding the protected activity Filing and Litigation: complaint filed with the DOD or relevant agency’s Office of Inspector General within 3 years, with a 210-day option to “kick-out” to federal court Damages: back pay, special damages, reinstatement, attorneys’ fees and costs

Sarbanes-Oxley (“SOX”) Retaliation, 18 U.S.C. § 1514A Covers: employees and contractors of publicly traded companies and their subsidiaries Protected activity – includes reports of: Mail, wire, bank, or securities fraud; Violation of SEC rules and regulations; or Violation of federal laws related to fraud against shareholders Causation standard: ‘contributing factor’ standard Filing: complaint must be filed with OSHA within 180 days of the adverse action Litigation: can appeal to DOL Office of Administrative Law Judge, with 180-day option to “kick-out” to federal court Damages: include back pay, front pay, compensatory damages, reinstatement, and attorneys’ fees

SEC Whistleblower Program Retaliation Provision, 15 § 78u-6(h)(1) Protected activity: providing information to the SEC regarding violations of U.S. securities laws in accordance with the SEC whistleblower rewards program; testifying or assisting in SEC investigations related to this program; and/or making disclosures required/protected under SOX or other laws, rules, and regulations of the SEC SEC reporting only: to be protected, plaintiff must have made protected disclosures to the SEC pursuant to the SEC’s procedures for the whistleblower rewards program Litigation: file directly in court, subject to three year statute of limitations “after the date when facts material to the right of action are known or reasonably should have been known to the employee” (but further subject to an outer bounds of six years) Damages: double back pay, front pay, reinstatement, and attorneys’ fees

Consumer Finance Protection Act Protected activity:  opposition to violations of Title X of the Dodd-Frank Act, a CFPB regulation, or any other consumer financial protection law that the CFPB enforces, including laws regulating “unfair, deceptive, or abusive practices . . . related to the provision of consumer financial products or services.” Industries: includes mortgage lending and servicing, student loans, credit cards, consumer credit reporting, etc. Causation standard: ‘contributing factor’ standard Filing: file with OSHA within 180 days of the adverse action Litigation: can appeal to DOL Office of Administrative Law Judge, with option to “kick-out” to federal court Damages: back pay / front pay, compensatory damages, reinstatement, attorneys’ fees

Wrongful Termination in Violation of Public Policy

Wrongful Termination in Violation of Public Policy Exception to the “at-will” employment doctrine Protects employees who are terminated for opposing or refusing to participate in conduct that violates a specific public policy. Often broad coverage. Typically based on common law, but sometimes statutory. Claims vary by state: DC: federal or DC statute or regulation, DCWPA VA: Virginia law only, plaintiff within class to be protected MD: covers only external reports to government agency Potential preemption issues where a retaliation remedy is available under FCA or another statute

“Honest Abe Lincoln”-Approved Other possible employment claims Other whistleblowing statutes, in transportation, environmental, nuclear, etc. industries Look at the Department of Labor’s Whistleblower and Retaliation collection of statutory protections Breach of contract / state wage payment laws EEO discrimination or retaliation

False Claims Act Retaliation Claims Don’t Forget Hiring Protections

Common Counterclaims against Relators Misappropriation of Documents (Breach of Contract) Breach of Fiduciary Duty Disparagement

Misappropriation of Documents (Breach of Contract) Breach of contract counterclaims typically based on provisions in employment or separation agreements requiring employee to not disclose company’s confidential information Documents related to the qui tam, as necessary for the qui tam: generally dismissed on public policy grounds Documents unrelated to the qui tam, or beyond what is necessary for the qui tam: generally tend to survive motion to dismiss stage

Breach of Fiduciary Duty Premised either on disclosure of company secrets to attorney/DOJ, or failure to disclose claimed violations of law to the company before disclosing to attorney/DOJ Dismissed where claims amount to claims for indemnification or contribution Dismissed on public policy grounds, where damage from alleged breach is essentially the damage caused by the act of being a relator Typically dismissed at the motion to dismiss stage

Honest abe --& (HONEST Robin’s and Honest AVI’s) Practice Tips Clients should not over-gather documents, take only documents related to the qui tam After reviewing the documents, do not keep irrelevant documents. Delete, retain, or leave with filter counsel? “What Not to Do”: U.S. ex rel. Cafasso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047 (9th Cir. 2011) Relator gathered nearly 11 gigabytes of data (tens of thousands of pages) from company computers Indiscriminate copying of whole folders Including attorney-client privileged communications, trade secrets, etc. Discovery violations

Disparagement Disparagement outside of the FCA reporting process Counterclaims may be premised on a breach of a non- disparagement provision in an employee contract or separation agreement Claim may be viable if it involves conduct that is independent of the FCA claims, i.e. not premised on defendant’s liability

Negotiating Settlement Agreements Timing and scope of settlement: Speed of resolution, amount of resolution Desire to report to the government Other non-economic considerations Release considerations: Pre- or post-disclosure to government Language stating can’t report to government, or can’t profit from report to government Carveouts for vested benefits, continuing claims Mutual release of claims Return of documents

Settlement Principles Model Rule 1.4 Communication (b) A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.

Settlement Principles Model Rule Rule 1.8 Conflict Of Interest (g) A lawyer who represents two or more clients shall not participate in making an aggregate settlement of the claims of or against the clients...unless each client gives informed consent, in a writing signed by the client. The lawyer's disclosure shall include the existence and nature of all the claims …involved and of the participation of each person in the settlement.

Settlement Principles Model Rule 5.6 Restrictions On Right To Practice A lawyer shall not participate in offering or making:   (a) a partnership, shareholders, operating, employment, or other similar type of agreement that restricts the right of a lawyer to practice after termination of the relationship, except an agreement concerning benefits upon retirement; or  (b) an agreement in which a restriction on the lawyer's right to practice is part of the settlement of a client controversy. (emphasis added)

Many Thanks to TAF, TAFNET, TAFEF, TAFEF Staff and Board, Conference Planning Committee, and our Silent Partner, Abraham Lincoln

False Claims Act Qui Tam Litigation: relators’ personal claims Taxpayers Against Fraud Education Fund Conference Panel Presentation –October 3, 2018  Jason Marcus, Bracker & Marcus LLC, Panel Chair Avi Kumin, Katz, Marshall & Banks, LLP Ann Lugbill, Murphy Anderson PLLC Robin Potter, Potter Bolanos LLC