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Federal court rules on whistleblower protections

| May 23, 2018 | Employer Retaliation |

The False Claims Act prohibits employers in New Mexico and around the country from taking retaliatory action against workers who expose fraud or other illegal activity. Employers may not suspend, demote, harass, threaten or fire workers who report or threaten to report wrongdoing, but the landmark law does not include constructive dismissal among its list of prohibited forms of retaliation. Issues such as this are generally left to the courts to resolve, and a case involving whistleblower protections was heard earlier in 2018 by the U.S. Court of Appeals for the 6th Circuit.

The case involved a registered nurse who resigned after her employer allegedly took no action when told about billing irregularities and widespread fraud. The woman says that she was left to choose between leaving her job and risking her nursing license and possible criminal sanctions by engaging in illegal activity. According to the woman’s lawsuit, records were routinely altered and patients were sometimes admitted without the proper paperwork.

The lawsuit was originally dismissed because the woman did not claim that her employer had engaged in fraud specifically to compel her to resign. However, the appeals court determined that a jury could hear the woman’s arguments because her employer had allowed the alleged fraud to fester. It ruled that doing nothing to stop the alleged wrongdoing placed workers in untenable positions and amounted to a form of harassment. This ruling establishes that ignoring a whistleblower is an affirmative act and can form the basis of a retaliation claim.

Attorneys with experience in cases involving employer retaliation may urge companies to settle this kind of litigation and avoid further damage to their reputations. Attorneys could also suggest that workers gather as much evidence of retaliation as they can before taking legal action. Documents that could support allegations of unfair treatment include emails, company memorandums, disciplinary notices and pay records.

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