The U.S. Supreme Court has declined to settle a split among federal appeal courts on whether former employees are covered by whistleblower anti-retaliation protections contained in the False Claims Act (FCA). United States ex rel. David Felten v. William Beaumont Hosp., 993 F.3d 428 (6th Cir. 2021), cert. denied, No. 21-443 (U.S. Jan. 24, 2022).
Sixth Circuit Decision
In March 2021, the U.S. Court of Appeals for the Sixth Circuit ruled on the case of David Felten. Felten sued William Beaumont Hospital in 2010 for allegedly paying kickbacks to doctors for referrals. Felten later amended the lawsuit to claim the hospital retaliated against him by preventing him from getting another job after he was terminated. The Sixth Circuit vacated a ruling from the U.S. District Court for the Eastern District of Michigan and held the federal False Claims Act’s anti-retaliation provision protects former employees alleging post-termination retaliation. See United States ex rel. Felten v. William Beaumont Hosp., No. 20-1002, 2021 U.S. App. LEXIS 9387 (6th Cir. Mar. 31, 2021).
The Sixth Circuit reasoned that the purpose of the statute is to encourage the reporting of fraud and facilitate the government’s ability to stymie crime by protecting those who report it. It stated, “If employers can simply threaten, harass and discriminate against employees without repercussion as long as they fire them first, potential whistleblowers could be dissuaded from reporting fraud against the government.”
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