Retention of Employer Documents by Whistleblowers Part 5—Retaining Documents as Protected Activity Under the False Claims Act

file0001270222378A whistleblower’s acquisition and dissemination of documents may also be protected or privileged under the recently strengthened anti-retaliation and whistleblower provisions of the False Claims Act (FCA). The FCA arguably provides the broadest protection for individuals who collect and retain documents that relate to their employer’s wrongdoing.  Under the FCA, retention of documents has been held to be protected activity under the Act’s anti-retaliation provision, 31 U.S.C. § 3730(h).  As the D.C. Circuit recognized in U.S. ex rel. Yesudian v. Howard University, in enacting Section 3730(h) “Congress’ intent [was] to protect employees while they are collecting information about a possible fraud, before they have put all the pieces of the puzzle together.”  153 F.3d 731, 740 (D.C. Cir. 1998).  The court reached this decision under the 1998 version of Section 3730(h), which had a narrower scope of protected activity than the section provides today.  Even under this more restrictive provision, the D.C. Circuit went on to hold that “it is sufficient that a plaintiff be investigating matters that reasonably could lead to a viable False Claims Act case” in order to fall within the provision’s definition of protected activity. While the scope of protected activity under the prior version of Section 3730(h) included a whistleblower’s collection of information and documents regarding potential violations of the FCA “before they have put all the pieces of the puzzle together,” the provision’s protections were expanded even further in 2009 and 2010.  At that time, Congress amended the provision to include as protected conduct “lawful acts done” “in furtherance of an action under [the FCA’s qui tam provision] or other efforts to stop 1 or more violations of” the FCA. Although this amendment is a relatively recent event, several District Courts have addressed the effect of this change and determined that the scope of protected activity under the FCA was substantially expanded.  For instance, in Bell v. Dean the Middle District of Alabama held that

the revised language of the FCA retaliation provision requires only that protected behavior have been done “in furtherance of other efforts to stop 1 or more violations of this subchapter.” 31 U.S.C.A. § 3730(h) (2009). No nexus to actual or threatened litigation is required, in contrast to the former version of the statute, which measured a retaliation claim by the likelihood of a substantive FCA suit being brought.

Consequently, Section 3730(h) of the FCA now likely protects a much broader scope of activity by employees, including the collection and retention of documents that relate to efforts to prevent violations of the Act, as well as to prepare to file a qui tam lawsuit.