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Saturday, September 13, 2025

False Claims Act Retaliation Decision Calls into Question Heightened Notice Standard for Fraud Alert Employees - The National Law Review

A recent decision denying summary judgment in a False Claim Act retaliation case signifies further erosion of the “distinct possibility” standard that governed FCA retaliation claims in several circuits prior to the adoption of the 2009 amendments to the FCA and calls into question why any court would continue to apply a heightened notice standard to fraud alert employees. Judge Adelman’s construction of FCA protected conduct in Patzer v. Sikorsky Aircraft Corp. is consistent with the text and purpose of the FCA and recognizes that Congress intended to encourage whistleblowers to stop violations of the FCA before before they happen or recur.

Patzer’s False Claims Act Retaliation Claim

Patzer brought suit under the False Claims Act’s whistleblower protection provision alleging that Sikorsky and two of its subsidiaries, Derco and SSSI, terminated her employment because she tried to prevent them from defrauding the government. In particular, she tried to stop Derco from representing on a disclosure statement that it complied with the FAR provision prohibiting profits on transfers of noncommercial items between affiliates while simultaneously adding a profit to its transfers of noncommercial materials to its affiliate SSSI.

As Derco’s Assistant Controller of U.S. Government Accounting and SOX Compliance, Patzer calculated annual forward pricing rates, developed disclosure statements, and investigated and reported potential fraud related to accounting rules and regulations and...



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