The Seventh Circuit recently issued a decision interpreting the anti-retaliation
provisions of the False Claims Act (FCA). The decision provides
important clarifications about how courts may interpret recent
amendments to this provision. Like a recent decision by the
Fourth Circuit, the Seventh Circuit finds that courts may
inquire whether the employee's underlying complaint of FCA
fraud was objectively and subjectively reasonable. Using that
standard, the Seventh Circuit affirmed a district court's
dismissal of the whistleblower's claim on a motion for summary
The FCA's two key liability provisions apply to any person
(1) who "knowingly presents . . . to an officer or employee of
the United States Government . . . a false or fraudulent claim for
payment or approval" or (2) who "knowingly makes, uses,
or causes to be made or used, a false record or statement to get a
false or fraudulent claim paid or approved by the Government."
31 U.S.C. § 3729(a)(1)-(2). The FCA's anti-retaliation
provision protects employee conduct "in furtherance of an
action under this section or other efforts to stop 1 or more
violations of this subchapter." Thus, an employee potentially
can demonstrate "protected activity" either by showing
steps taken (1) in furtherance of an FCA action or (2) to stop a
violation of the FCA.
In Uhlig v. Fluor Corporation, the Seventh Circuit
addressed when an employee has satisfied his burden of establishing
that he engaged in protected activity. Uhlig – an electrician
–claimed the company defrauded the government by failing to
follow its alleged contractual obligations regarding the
qualifications of electricians performing work in Afghanistan and
terminated him for complaining about the alleged breach.
In dismissing Uhlig's claim, the Seventh Circuit explained
that protected activity has both a subjective and objective
component. Subjectively, an employee must show that he believed in
good faith that the company was committing or had committed fraud
on the government. Objectively, the plaintiff must show that a
reasonable employee in the same circumstance would have reasonably
believed that the employer was committing or had committed fraud
against the government. Important to this analysis, the Seventh
Circuit recognized that the "objective" prong was limited
to an analysis of the facts known to the plaintiff at the time of
the protected activity.
Applying this standard, the Seventh Circuit upheld the district
court's decision granting summary judgment. Uhlig had failed to
satisfy the "objective" prong of the test. Uhlig claimed
that the contract required all electrical work to be performed by
licensed journeymen. However, the contract did not require that
licensed electricians perform all electrical work. At the time
Uhlig engaged in protected activity, he had no firsthand knowledge
of the contractor's contractual obligations. Furthermore,
Uhlig's secondhand knowledge of the contract was not sufficient
to support his conclusion. Thus, Uhlig's claim that the company
violated the contract did not have an objective basis.
This case demonstrates a couple of key points. First, in
assessing "protected activity," courts will evaluate what
the purported whistleblower knew at the time of the protected
activity. Thus, information regarding the plaintiff's actual
knowledge can become important. Second, the case shows courts'
reticence to allow FCA whistleblower claims where the
plaintiff's theory does not at least approximate a legitimate
FCA fraud claim. The substantive doctrines of FCA liability will
influence the viability of a protected activity claim.
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