CP: With retaliation claims, I guess there are really two issues. One would be retaliation against the employee for reporting wrongdoing and the other would be whistleblower Qui Tam claims. Is that correct?
Michael: That is true for the False Claims Act, although I should note that a variety of other whistleblower protections and incentives may also apply to pharmaceutical industry employees. For example, the Sarbanes-Oxley and Dodd-Frank Acts protect certain individuals from retaliation for reporting fraud or securities violations, and the Securities and Exchange Commission whistleblower program provides rewards for information leading to a successful enforcement action that nets more than $1 million.
As you noted, the False Claims Act has two key components relevant to whistleblowers. One is the Qui Tam component, where an individual can bring suit on behalf of the government to recover money that has been obtained fraudulently. In the context of the pharmaceutical industry that often arises in the context of off-label marketing for drugs or devices that are reimbursed by Medicare and Medicaid. There may also be issues with kickbacks or illegal referrals.
The size of the fraud – and thus the size of the potential recovery – depends on whether the off-label marketing is something limited to only a region or district or team, or if it is related to a companywide policy or practice. The scope of the fraud and the moneys involved also affect whether the Department of Justice decides to get involved in the Qui Tam suit. When the Department of Justice intervenes in a Qui Tam lawsuit, then the chances of success go way up.
The other component of the False Claims Act is the anti-retaliation provision. If an employee has complained about or attempted to stop a false claim for payment to the government, such as off-label marketing, kickbacks, etc., they may have a retaliation claim if they are disciplined or terminated as a result.
The Qui Tam and retaliation claims aren't mutually exclusive. You can file both claims. But the Qui Tam must be brought under seal. It is not filed publicly and the suit cannot be disclosed until the court lifts the seal.
CP: Does the strength of the Qui Tam claims influence the success of the retaliation claims?
Michael: In practical terms, it can. To be protected from retaliation, the employee only needs to have a good faith, reasonable belief that they are reporting or attempting to stop a violation of the False Claims Act. You don't have to be correct about the violation. But as you can imagine, whether or not the employee is right about the scope and seriousness of any wrongdoing has an impact on how a company or a court would value the claim.
CP: So it sounds like if an employee believes that their company is violating the False Claims Act it wouldn't be a bad idea to consult with an attorney before making their concerns known.
Michael: If you're confident something is wrong, it is worth raising the concern. But there are a lot of gray areas in highly regulated industries, and that is certainly true in the pharmaceutical industry. Given that most pharmaceutical companies are concerned about these types of issues, their attorneys and compliance officers have probably set guidelines that are more stringent than what the law requires. So an employee may be aware of conduct that violates company policy, but is not against the law. An experienced attorney can help assess whether the behavior is really illegal.
CP: I understand that there have been some recent rulings in the False Claims Act arena that have led to some changes in the standards in some areas. Is that correct?
Michael: The interpretation of what constitutes a false claim for payment is always being litigated. The boundary between off-label marketing and acceptable commercial speech isn’t clearly fixed. But the False Claims Act remains a very powerful tool for the government to fight fraud on government healthcare programs, and some of the largest FCA awards have been in the area of pharmaceuticals.
In the retaliation context, the general trend in the law has been toward more protection for the whistleblower. The FCA has been amended a number of times, and the anti-retaliation provisions have been made more expansive. There is a recognition that the people that are going to know the most about what is going on behind the scenes in a company are going to be the employees. In pharmaceuticals, the sales people are often the first and last lines of defense against some of these practices that can impact millions of people and billions of dollars.
It is a rapidly evolving area of law and you don't always have an exact answer whether a particular activity will definitely be construed as illegal by the time a court weighs in. The courts are always struggling with this. And the act is 150 years old, so this has been going on for some time now.
CP: I didn't realize it was that old.
Michael: Yes, it was passed during the Civil War when there was a concern about contractors defrauding the Union. It has evolved quite a bit since then. Some of the biggest revisions were 30 years ago when the anti-retaliation clause was added. Again, this was in recognition that the people who have the best information are at the company, and they need some protection when speaking out about fraud.
CP: Are there any other points you feel are important for employees to consider?
Michael: I think another cutting edge issue is what company information an employee is allowed to provide to use to support a whistleblower claim. A company is going to specify that all of their material is confidential, but there are both specific laws and public policies that allow an employee to provide certain information to their attorneys or the government. At one extreme, you can't just copy your hard drive and say you need all of this to make your claim. On the other hand, a company can’t say you can't share anything outside the company if you believe there is wrongdoing on the part of the company. You can't contract away your ability to go to law enforcement with evidence.
The important thing for employees to know is yes, you have to document things. An attorney can advise you about how to avoid ending up on the defensive by taking more information than you should.
Another important thing is not to wait if you suspect wrongdoing or retaliation. There are deadlines for filing claims so you don't want to wait too late.
The final piece of advice is that you don't really gain anything by talking to everyone you know about what you have observed and what your company may have done to you. You may have all the reason in the world to do that, but it is not likely to help your case and it might cause harm. An angry Facebook post can harm an employee's case and possibly put them on the defensive. It is important to keep the big picture in mind and not sabotage your position.
CP: I think one concern an employee has in bringing a Qui Tam case is that their name is going to be attached to the case and it may affect their future employment opportunities. Of course they may make enough as their part of a settlement or judgment to never have to work again, but there is no guarantee. Is that a reasonable concern?
Michael: Yes, it is a reasonable concern. Once you file a lawsuit, your name will be attached to it. Even, if you file under seal with a Qui Tam, that will come unsealed at some time. You don't know with certainty how large a settlement or judgment might be, and you should not count on never having to work again. It’s not something to be taken lightly, and it is important to have someone lay out the risks and potential benefits.
I have a lot of respect for people who are willing to take the risk and speak up. Most people come to us because they are concerned about what is going on in their company and the impact that has on others, and sometimes they have suffered as a result of trying to make things right.
CP: Mike, I think that covers the basic questions that we see asked a lot of times. I think our users will find a lot of this information very useful. We really appreciate you taking the time to talk with us.