Whistleblower cases arise when employees seek to “blow the whistle” on employers who are committing fraud on the state or federal governments. Cases may also follow when adverse action takes place against these whistleblower employees by their employers for their whistleblowing conduct. The types of employers subject to liability range from government organizations and corporations. Usually the employee reports fraudulent or corrupt conduct that is in violation of federal regulations governing, among other things, health and safety in the workplace, pharmaceutical regulations, environmental protection, or securities fraud. The purpose of whistleblower law is to protect these employees from adverse treatment such as termination from employment, deduction in pay, or transfers. As a result of whistleblower law, employees are also encouraged to uncover the fraud and corruption that can often occur in their places of employment. Whistleblower policy encourages employees to take action and not passively stand by while fraud and corruption occur.

Depending on the conduct that is subject to the whistleblowing, different

whistleblower legislation has been enacted to ensure protection to these employees, such as the False Claims Act (“FCA”) and Sarbanes-Oxley. Whistleblower policy serves to protect the government from fraudulent claims, as well as employees from corruption or abuse in the workplace. When employers do not abide by whistleblower retaliation laws and employees experience whistleblower retaliation, then a whistleblower case will arise.

Whistleblower Cases under the False Claims Act

Whistleblower cases arising under the FCA, also known as Qui tam lawsuits, have increased.  typically whistleblower cases involve large corporations, Wall Street, and pharmaceutical companies. The largest whistleblower settlement in history occurred in early 2009 when pharmaceutical giant, Eli Lilly & Company agreed to pay $1.4 billion in civil and criminal penalties based on the illegal and fraudulent marketing of its prescription drug Zyprexa. The whistleblowers were former Eli Lilly employees and under whistleblower laws, they were protected from:

  • harassment, termination or demotion during the government’s investigation;
  • awarded a significant share of the money recovered from Lilly; and
  • remained anonymous for their protection.

This whistleblower case served to protect employees who wanted to bring to light the wrongdoings of their employer, as well as encouraged these employees to bring such wrongdoings to light.

In 2004, the pharmaceutical giant Schering-Plough agreed to pay $293 million to settle an FCA lawsuit related to illegal and fraudulent pricing of its allergy drug, Claritin. Whistleblowers in this case were former executives.

Whistleblower Cases under Sarbanes-Oxley

The Sarbanes-Oxley Act, makes it a felony to retaliate against a protected whistleblower and protects employee whistleblowers once they’ve reported corporate fraud.  Under Sarbanes-Oxley, a corporate whistleblower has the right to:

  • reinstatement,
  • back pay and
  • other compensatory damages.

Contact a Whistleblower Lawyer

If you suspect you have a whistleblower case of your own, contact us to discuss whether you can file a whistleblower lawsuit today. A qualified whistleblower lawyer will ensure your legal rights are protected.

Published November 17, 2011 by