As described in Part 2 of this series, there are strong protections for whistleblowers under the law. Coming forward to report fraud, however, still carries many risks that the law cannot always protect against.
Whistleblower Fact of Life 1: Be prepared to find a new job. For whistleblower who are still employed at a company engaged in the fraud, there is a very real risk that the company will retaliate against the employee—regardless of what the law says. Some employers are unaware of whistleblower protections. Some employers have gotten away with retaliating against whistleblowers in the past, and therefore have no fear of doing it again. And other employers are so upset at the whistleblower—and want to send a message to other employees—that they are willing to risk the consequences. So, whistleblower fact of life number 1: Be prepared to find a new job.
Whistleblower Fact of Life 2: Be prepared to find a new industry. Some whistleblowers find themselves not only out of a job, but blackballed in an entire industry. Whether this happens depends mostly on the size of the industry, and the notoriety of the case. For example, a whistleblower with a very specialized job, in an area with only a few employers, may become very well known, and future employers might be wary of hiring a perceived “troublemaker.”
Whistleblower Fact of Life 3: Be prepared to wait a very long time. The wheels of justice move slowly, and even more slowly in qui tam cases. Because the government usually investigates for years before litigation even starts, whistleblower cases require a tremendous amount of patience. Three to five years is a good benchmark for qui tam cases, though many take much longer (and some are occasionally resolved more quickly).
Whistleblower Fact of Life 4: It is out of your hands. As discussed in Part 3, in a qui tam lawsuit, the whistleblower is bringing legal claims on behalf of the government. The claims belong to the government, and the government has the ultimate say in whether a case moves forward, how long it takes to move forward, whether a case settles, and how much it settles for. The government even has the right to dismiss a qui tam case that it thinks should not go forward, no matter how strong a case the relator and relator’s attorney think they have.
Whistleblower Fact of Life 5: The law is unpredictable. Even the best case inevitably runs into speed bumps. And great cases even sometimes run into dead-ends and brick walls. The law is constantly evolving, especially in the False Claims Act context, and the appellate courts can change a good case into a difficult one without warning.
Whistleblower Fact of Life 6: You may not be alone. Especially in larger companies, you may not be the only whistleblower. If another whistleblower files a case before you, covering the same or similar fraud, you may not get any reward, due to a provision called the “First to File” rule. And because qui tam lawsuits are filed under seal, there is no way to know whether there is already another whistleblower case on file until after you file!
Whistleblower Fact of Life 7: Don’t quit your day-job. Some whistleblowers are rewarded handsomely for their efforts—receiving millions, or even tens-of-millions of dollars as their relator’s share. Many are not. The whistleblowers who end up most satisfied are those that bring the case because they want to put a stop to the fraud—not just because they see big dollar signs.
In Part 7, we will go into more detail on some of the legal nuances of whistleblower cases.
These areas of law are, of course, highly complicated, and this series is not designed to provide legal advice of any kind. If you have questions about your rights, obligations, or potential legal claims, you should contact an attorney, and do so as promptly as possible, as there may be statutes of limitation or other deadlines that could impact your ability to bring a claim.
Justin T. Berger is a Partner at Cotchett, Pitre & McCarthy, LLP, where he handles high-profile cases of corporate fraud, including representing whistleblowers in qui tam actions under the federal and California False Claims Acts ...