COMPLIANCE CORNER

Fixing a Hole in Whistleblower Retaliation Protection

SITUATION
Fictional Laboratories (FL) plans to deliberately bill Medicare for tests it does not actually provide. To carry out the scheme, it orders Pathologist A to falsely attest that she performed the tests. When she refuses, the lab fires her. When Pathologist B gets wind of what happened, he files a qui tam whistleblower claim against FL. He, too, is summarily fired. Making FL’s actions even more deplorable is the fact that the lab is part of a federal health agency.

QUESTION
Against which pathologist did FL commit illegal retaliation?
    A. Pathologist A
    B. Pathologist B
    C. Both of them
    D. Neither of them

ANSWER
B. As absurd as it seems, under current whistleblower laws only Pathologist B would have a valid retaliation claim against FL.

EXPLANATION
Both pathologists were clearly victims of retaliation. And the federal Whistleblower Protection Act is supposed to protect employees of federal agencies who get fired in retaliation for blowing the whistle. The problem is that the law contains a nasty loophole: It bans retaliating against an employee for bringing a whistleblower lawsuit but not for refusing to obey an order to break the law. As a result, as it is currently constituted, the Act protects Pathologist B but not Pathologist A.

But all of that is about to change. A new federal bill called The Follow the Rules Act is designed to fix the glitch by specifically extending whistleblower protection against retaliation to employees who refuse to obey an order that would require them to break the law. The House of Representatives passed the bill on May 2 and the Senate did likewise on May 25. It is now on the President’s desk and is sure to be signed.

Takeaway: Good for Congress for recognizing and trying to plug the retaliation protection loophole. But the problem may still not be resolved. In fixing one quirk, The Follow the Rules Act may actually have created another. The problem is that the legislation is missing something pretty important, namely, clarification that the new protection from retaliation for disobeying an order to break the law applies retroactively.

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