Whistleblower rewards are financial compensation for individuals who blow the whistle on their employer. Without these economic rewards enticing whistleblowers, many corporations would continue to cheat the government, cut corners, and, in the end, cost the taxpayers extra money. This article describes several of these whistleblower protections as well as the whistleblower reward associated with them. As always, these laws are considerably more complicated than what is presented here, so if you feel as though one them apply to you, contact an employment lawyer for a review of your particular case.

The Federal False Claims Act

In 1863, Congress passed the False Claims Act which allows everyday people and employees to sue companies and other individuals on behalf of the government. These are referred to as “qui tam” cases. Qui tam lawsuits can be for any kind of fraud or false claim committed against the government.

Common claims raised in qui tam whistleblower lawsuits include allegations that a corporation fraudulently billed Medicare or Medicaid, using fake claims to get a claim paid, conspiracy to get a false claim paid, avoiding paying the government, defense contracts, and claims for construction work.

There are a few things you and your attorney will consider before filing a qui tam lawsuit. First, qui tam lawsuits are filed under seal. This means that your attorney and you are not allowed to speak with anyone other than government lawyers and investigators about the case. Secondly, unlike many other employment lawsuits (i.e sexual harassment, wage claims) only the first person to file a qui tam lawsuit may carry it on. This means that while you are preparing your suit, someone else may have already filed it and you will not know this until a good amount of work has been done.

Finally, the government may decide to take control of the case and thus may start investigations immediately. The government has the ultimate say in whether it decides to intervene and control the case and even if it initially declines to, it may step at any point and take over. This, in turn, could lead to your employer figuring out who reported the claim to the government (more on this later).

False Claims Whistleblower Rewards

That being said, in passing the False Claims Act, Congress has provided economic incentives for you (whistleblower rewards) to report such wrongdoings in the form of protections and a whistleblower reward. If you report such fraud or crimes against the government, your employer is prohibited from discriminating or retaliating against you.

Failure to do so may result in reinstatement of your job, double the amount of lost wages, interest on those wages, attorney’s fees, and compensation for other damages you may have suffered.

As for the whistleblower reward, if the government takes the lead and wins your case, you will be entitled to 15 to 20 percent of the amount recovered by the government. If you and your attorney took the lead, this increases to 25 to 30 percent of what the government recovers. On top of that, in some instances triple damages are allowed meaning the defendant could be on the hook for a large bill.

There have been billion dollar settlements in these types of cases. So if you believe your employer has fraudulently stolen money from the government in some way, contact an employment lawyer as soon as possible. The whistleblower rewards can be extremely large.

The California False Claims Act

California also a False Claims Act that can be found in California Government Code § 12652(c)(1) that allows a person to bring a lawsuit for themselves and the state or a political subdivision (counties, cities, etc.). This Act mostly functions the same way as the federal False Claims Act, but there are some additions such as someone who inadvertently submits a false claim, realizes it after the fact, and does not try to fix it within a reasonable is breaking this law. The same concerns for the federal False Claims Act applies.

Regarding the whistleblower rewards for the California False Claims act, the state is more generous. For instance, if the government takes over the case the whistleblower reward may be anywhere from 15 to 30 percent. If the state leaves the case to you and your attorney, the ceiling to your whistleblower reward balloons to potentially 50 percent! Additionally, Cal. Gov. Code 12653 may even allow punitive damages increasing this whistleblower reward.

IRS Whistleblower Rewards

The IRS also offers a whistleblower reward through the IRS Whistleblower Office. These cases are usually based around an individual or a corporation either not paying enough taxes, or refusing to pay them altogether. For these lawsuits, the IRS is looking for reliable information. If you have documentation that your employer is avoiding paying its tax obligations, it would be wise to instigate the possibility of a large recovery. Additionally, for the whistleblower reward to be allowed the information you provide must lead to the IRS collecting penalties, taxes, or interest from the rule-breaking taxpayer.

The whistleblower reward for this type of reporting is split depending on the amount of money recovered by the IRS. If the amount is over $2 million, and other conditions apply, you may receive 15 to 30 percent of the amount collected. If it is not a company, but a person, their annual gross income must be over $200,000 to recover these percentages. If the amount recovered is less than $2 million or the person makes less than that $200,000, the maximum percentage for a whistleblower reward is 15 percent.

Sarbanes-Oxley Whistleblower

The Sarbanes-Oxley Act of 2002 was enacted to improve corporate responsibility, improve financial disclosures, and prevent fraud. This act added to preexisting law whistleblower protections for publicly traded companies by prohibiting the discharge, demotion, suspension, threatening, harassment, or discrimination of employees who provided information or assisted in an investigation of violations of any rule or regulation of the Securities Exchange Commission that amounted to fraud against the government.

Should the employer retaliate by any of the means above, the employee may receive reinstatement of their job with the same seniority as before, back pay with interest, and compensation for other special damages suffered as a result of this treatment. While this law does not specifically mention a whistleblower reward, it is possible that the crime committed could also fall under the Federal False Claims Act discussed above. The backpay, emotional distress, and lost wages may amount to significant whistleblower rewards for certain claims.

California Whistleblowers Protection Act (Cal. Gov. § 8547)

The California Whistleblowers Protection Act (“CWPA”) is a law that is specifically geared towards state employees and states that they “should be free to report waste, fraud, abuse of authority, violation of law, or threat to public health without fear of retribution. The thought process behind this law is that government employees can best serve the citizens of the state when they can be honest about what is going on around them.

In addition to the standard whistleblower protections preventing retaliation, harassment, and discrimination, the CWPA also prevents employers from using their authority to bribe employees with promotions, transfers, and performance evaluations. Any employer who does this may be liable for damages brought by the employee (Cal. Gov. Code § 8547.3).

The CWPA also authorizes the awarding of punitive damages where the acts of the employer are proved to be malicious. Regarding a specific whistleblower rewards, the CWPA does not explicitly provide for one, but there is the possibility, much like with the Sarbanes-Oxley Act and the federal False Claims Act, that the violation being reported falls under the California False Claims Act as well allowing those awards to be sought.

CA Patient Care and Conditions Whistleblowers (Cal. Health & Safety Code § 1278.5)

California Health and Safety Code § 1278.5 (“CA HSC § 1278.5”) was passed by the California Legislature to promote patients, nurses, medical staff, and other healthcare workers to report unsafe patient care and conditions to government entities. This law helps to ensure that patients are protected and also helps with the monitoring done by government entities. Some examples of complaints that would fall under this code include, but are not limited to, lack of sanitary drinking water for patients, inadequate warnings leading to cross contamination and infection, inadequate sterilization of surgical tools, contaminated equipment, and possibly even being understaffed.

While the law created specifically for this kind of reporting does not explicitly provide for a whistleblower reward, there are many protections afforded the whistleblower. Subsection (b) of CA HSC § 1278.5 prohibits the health care facility from discriminating or retaliating against the employee for complaining, reporting, or cooperating in an investigation with regards to one of these situations. Should the healthcare facility choose to retaliate or discriminate for these actions, the whistleblower rewards allow the employee to be reimbursed for lost wages, work benefits, attorney’s fees and other damages the court deems necessary.

CA Law Violation Whistleblowers (Cal. Labor Code § 1102.5)

The California Legislature also enacted California Labor Code § 1102.5, which prevents employers from creating rules, regulations, or policies that prevent employees from reporting to the government any law that the company may be violating. This law also prohibits that employer from retaliating against an employee that either disclosed such information, or they believe disclosed such information, to the government or law enforcement. An example of this would be if a company dumped toxic waste into a river and an employee reported it. In response to reporting the dumping of toxic waste, the company terminated the employee.

The whistleblower protections of this law are mentioned above in the prohibition of retaliation for reporting, or believed to have reported, the violation to the government. California Labor Code § 1105 provides whistleblower rewards in that an employee may “[recover] damages from his employer for injury suffered through a violation . . ..” This includes lost wages, emotional distress, and punitive damages.

Conclusion

Whistleblower rewards may be extremely large. The only way to evaluate your potential reward is to consult with an employment lawyer as soon as possible. The statute of limitations may be slowing eating away at the value of your claim so we recommend that you contact an attorney immediately.