July 15, 2024
You may have heard that a whistleblower who comes forward with knowledge of fraud perpetrated against the federal government or California state government is eligible for a significant financial reward. This is absolutely the case. Under the federal False Claims Act (FCA), a successful plaintiff in an FCA lawsuit who comes forward with information relating to fraud on the federal government can obtain between 15% and 30% of the total financial penalties imposed on the defendant. Pursuant to the California False Claims Act (CFCA), a successful plaintiff who pursues fraud on the state government can recover between 15% and 50% of the fines and levies imposed on the defendant. As many such cases result in penalties in the tens of millions of dollars, these whistleblower rewards can be hugely substantial.
Despite these rewards, many would-be whistleblowers are hesitant to come forward due to fear of retaliation from coworkers, employers and others, as it is often through a person’s job that they become aware of illegal behavior. However both California and federal law provides a number of protections for whistleblowers (whether related to the FCA/CFCA statutes or other statutes), which can also include damages for the retaliation itself, in addition to the financial rewards of a CFCA or FCA claim.
The California Whistleblower Protection Act
The California Whistleblower Protection Act (WPA) specifically protects the nearly quarter million California state employees (including employees of all University of California schools). Pursuant to the WPA, every state employee is protected from retaliation for reporting activity by a state agency or by a state employee that (1) is in violation of any state or federal law or regulation, including, but not limited to, corruption, malfeasance, bribery, theft of government property, fraudulent claims, fraud coercion, conversion, malicious prosecution, misuse of government property, or willful omission to perform a duty, or (2) is economically wasteful, or involves gross misconduct, incompetency, or inefficiency.
If another state employee retaliates against the whistleblowing employee by taking action such as terminating, suspending, disciplining or failing to promote that employee (or providing a poor performance review), the employee who was retaliated against can bring a civil action for compensatory damages, such as lost wages. The employee can also pursue punitive damages and attorney’s fees against the offending employee.
Compensatory Damages Pursuant to California Labor Code Section 1102.5
California Labor Code section 1102.5 makes it illegal for an employer or any person acting on behalf of that employer to adopt or enforce any policy preventing an employee from disclosing information to the government or to internal authorities regarding violations of federal, state, or local law. In addition to providing for a civil fine of up to $10,000 against the offending retaliator, this law also provides for damages to be payable to the whistleblower.
Although the law itself does not make specific mention of damages payable to a plaintiff, California state courts interpreting the law have indeed found that an employee-plaintiff who has experienced retaliation is entitled to compensatory damages (such as the loss of wages) as well as punitive damages, which are damages beyond what a plaintiff has suffered but are intended to be a punitive measure to deter future conduct. In one recent case, an employee who pursued a whistleblower claim against their employer was awarded $500,000 in punitive damages in addition to $275,000 in non-economic damages, $120,550 in economic damages, and approximately $1,000,000 in attorneys fees for pursuing a whistleblower action against a church after the whistleblower was retaliated against for coming forward with information relating to sexual harassment. (Mathews v. Happy Valley Conf. Ctr., Inc. (2019) 43 Cal.App.5th 236.)
Anti-Retaliation Provisions in the Federal FCA
Federal law also provides anti-retaliation protections for whistleblowers. Under the FCA, an employer (or employee acting on the employer’s behalf) cannot fire, demote, harass, threaten, suspend or otherwise discriminate against an employee in the workplace who has come forward with information relating to an FCA claim. .
Pursuant to the FCA, if an employee is subjected to such retaliatory behavior as a result of pursuing a whistleblower claim, then the employee can pursue legal action against the employer for reinstatement in the same position, twice the amount of back pay they were denied plus interest, compensation for any special damages they suffered as a result of the discrimination, and attorney’s fees.
Anti-Retaliation Provisions in the CFCA
Like its federal counterpart, the California False Claims Act (CFCA) also provides employees with retaliation for coming forward with evidence of fraud perpetrated against the California state government. Pursuant to the CFCA, any employer, contractor, or agent shall be entitled to “all relief necessary to make that employee, contractor, or agent whole, if that [person] is discharged, demoted, suspended, threatened, harassed on in any other manner discriminated against” because of lawful actions on that person’s part to prevent, deter, or punish violations of the CFCA.
Relief that is available to such an employee includes reinstatement with the same seniority status, two times the amount of back pay (and interest thereon) that was lost, compensation for any special damages sustained as a result of the discrimination and, where appropriate, punitive damages and attorney’s fees.
Contact a California Whistleblower Attorney Today
If you believe you have a knowledge of fraud that may form the basis of a successful FCA or CFCA claim, you are highly encouraged to work with experienced California whistleblower counsel to discuss and prepare your claim in a completely confidential environment.
