Independent Contractors Not Protected by Old FCA Anti-Retaliation Provision

Recently, the Third Circuit held, in an unpublished opinion, that independent contractors are not protected by the False Claims Act’s anti-retaliation provision. However, the court noted that this loophole was recently closed by the federal Fraud & Enforcement Recovery Act of 2009 (FERA).

In this case, a whistleblower ran a bus service for a county school district. After raising concerns that the school district was violating the federal False Claims Act, the school district greatly reduced the relator’s hours.

The relator brought an action under the False Claims Act’s anti-retaliation provision, which, at that time, was limited to plaintiffs who have an employee-employer relationship with the defendant. The lower court and appellate court, in dismissing the suit, both agreed that the relator was not an employee of the school district.

The amended False Claims Act provision, 31 U.S.C. § 3730(h) (2009), now offers whistleblower protections for “any employee, contractor, or agent.” This legislative improvement is especially important for physicians who may have admitting privileges at a hospital but are not technically employees. Now, these doctors can shine a light on a dishonest hospital, knowing that the FCA provides a level of protection against retaliation.

For more information about qui tam law and health care fraud, contact Nolan & Auerbach, P.A.