The California Supreme Court this month ruled that employees who report labor law violations to an employer or agency that already knew about the violation is a protected disclosure under state whistleblower law.

The ruling in a case brought by the state’s Labor Commissioner means that whistleblowers who report “already known” violations are subject to anti-retaliation protection. The state’s Labor Code prohibits employers from retaliating against employees for “disclosing information” concerning suspected violations of the law either internally or to government or law enforcement agencies.

But in this case, the state Court of Appeals initially ruled in favor of the defendant, a nightclub that terminated the employment of a bartender and threatened to report her to immigration authorities after she told the owner she hadn’t been paid for her last three shifts. 

The appeals court ruled the bartender had not made a “disclosure,” and thus was afforded whistleblower protection, because the term “disclose” means “the revelation of something new, or at least believed by the discloser to be new, to the person or agency to whom the disclosure is made.” The appeals court explained that the owner of the nightclub, “was at least aware of — if not responsible for — the non-payment of wages” and that an “employee’s report to the employee’s supervisor about the supervisor’s own wrongdoing is not a ‘disclosure’ and is not protected whistleblowing activity, because the employer already knows about his or her wrongdoing.”

In a unanimous decision, the Supreme Court overturned the appeals court ruling, concluding that the word “disclose” should not be so narrowly interpreted and that the bartender made a protected disclosure under the state Labor Code and was wrongfully retaliated against as a whistleblower.

The Supreme Court ruling comes with some limitations. While the nightclub did not participate in the case, amicus curiae contended that the Court’s new reading of “disclose” threatens “to convert everyday workplace disputes into whistleblower cases.” The Court responded that the Labor Code protections apply only where the disclosing employee “has reasonable cause to believe that the information discloses a [legal] violation. … This clause imposes a requirement of objective reasonableness and excludes from whistleblower protection disclosures that involve only disagreements over discretionary decisions, policy choices, interpersonal dynamics, or other nonactionable issues.”

The court also noted that employers accused of whistleblower retaliation can rebut the charge by “demonstrat[ing] by clear and convincing evidence that the alleged [retaliatory] action would have occurred for legitimate, independent reasons even if the employee had not” made a protected disclosure.

If you believe you’ve been retaliated against by your employer for making a whistleblower disclosure by reporting a violation of law to your company or a regulatory agency, we can help you better understand your rights, protections and options.

Keller Grover’s labor attorneys pursue justice for workers who have been treated unfairly by their employers, advocating for clients whose issues may pertain to wage theft, discrimination, harassment, and wrongful termination matters. Our attorneys are also experienced and knowledgeable about state and federal whistleblower laws and protections. This combination makes us uniquely qualified to represent whistleblowers. Contact us today for a free, confidential consultation.

 

We’ve told you before about the potential for fraud in government programs intended to protect the “Blue Economy” and how the False Claims Act enables whistleblowers to report wasteful spending on federal programs designed to protect the environment. 

However, other whistleblower programs besides the FCA can help safeguard the environment, even if the individuals or corporations involved aren’t contracted by the federal government.

Blowing the whistle on shipping pollution

The International Convention for the Prevention of Pollution from Ships (MARPOL) is the main international convention covering marine pollution by ships. The United States in 1980 passed the Act to Prevent Pollution from Ships (APPS), which makes it a crime to knowingly violate provisions of MARPOL. 

Much like the FCA, APPS includes whistleblower provisions that give workers incentives to report shipping pollution. In fact, the law states that an amount up to 50% of the fine issued to violators of the MARPOL protocol can be paid to whistleblowers who gave information leading to conviction.

Whistleblowers were responsible for more than three-fourths of APPS prosecutions during 1993-2017, according to a law firm analysis of 100 cases that was published by Whistleblower Network News. In those cases, the United States obtained over $270 million in sanctions from polluters and paid 206 whistleblowers more than $33 million in rewards,

Given the nature of shipping pollution – for example, only a handful of employees would be aware of illegal dumping of hazardous waste such as oily bilge water in an open body of water, miles from shore – it’s not surprising how many cases involved whistleblower information. In addition to cargo ships and crude oil tankers, cruise ships are also susceptible to violating MARPOL through discharges of sewage or other wastewater.

Ship workers who have witnessed or have knowledge of illegal practices at sea that lead to pollution can become APPS whistleblowers, even if they aren’t U.S. citizens.

A financial angle to climate change

Interestingly, the Securities and Exchange Commission’s whistleblower program could indirectly help counteract climate change. Here’s how:

The SEC has proposed rule changes that would require publicly traded companies to include certain climate-related disclosures in their registration statements and periodic reports, including information about climate-related risks that are reasonably likely to have a material impact on their business and disclosure of their greenhouse gas emissions.

If a corporation isn’t disclosing accurate information about climate risks to their business, or how much greenhouse gas it’s releasing, investors aren’t only misled, but the public lacks a true picture of how the company is contributing to climate change.

If the rule changes are approved, false climate disclosures would violate securities law. Whistleblowers can report violations to the SEC through its whistleblower program, which awards 10% to 30% of the money collected by the government in a successful prosecution.

What do I do if I have information about fraud?

Consulting with a whistleblower attorney is important to ensure your rights are protected and to determine whether you have a basis for a lawsuit. If you are considering reporting any wrongdoing to the government, it’s critical to consult with a knowledgeable attorney to better understand your rights and the potential outcomes of becoming a whistleblower. 

Keller Grover has decades of experience helping whistleblowers through the process from start to finish. Contact us today for a free, confidential consultation. 

While the Biden administration, Congress and private insurers argue about proposed cuts to Medicare Advantage and ways to shore up its financial future, another law that’s been in place for more than a century has proven to be the most effective way to reduce fraud in the system.

The False Claims Act, which allows whistleblowers, people who’ve witnessed or have information about a fraud upon the federal government who are also known as relators, to sue companies for fraudulent activity. Also: If stolen funds are successfully returned to the government, whistleblowers can receive up to 30% of that money.

Medicare Advantage, also known as Part C or managed care, is an alternative to traditional Medicare that is managed by private insurers. In 2022, the federal government spent $755 billion on the estimated 65 million people enrolled in Medicare, with $339.27 billion going to Part C. In 2023, more people are expected to be enrolled in Part C than traditional Medicare, making Medicare Advantage the largest taxpayer-funded health insurance program.

But Part C spending also includes billions in waste and fraud. According to a New York Times report last year, the Department of Justice and whistleblowers have pursued False Claims Act cases against at least half of the top 10 Medicare Advantage providers. Also, the U.S. Department of Health and Human Services Office of the Inspector General has found at least eight of those 10 private insurers have overbilled Medicare.

There have been other FCA whistleblower cases against private Medicare providers as well. Keller Grover represented whistleblower Kathy Ormsby, whose evidence led to the recovery of $90 million for the federal government in the settlement of a False Claims Act allegations against Sutter Health, the second-largest reported Medicare Advantage fraud settlement ever.

A Times story last month noted that without reforms, taxpayers will spend about $25 billion in 2024 in “excess” payments to Part C, according to the Medicare Payment Advisory Commission, a nonpartisan research group that advises Congress. According to the Centers for Medicare and Medicaid Services, the 2022 Medicare Part C estimated improper payment rate was 5.42%, which includes fraud and billing errors.

So what is the federal government doing to stop wasteful spending and fraud in Medicare Advantage? 

In February, partisan bickering ensued after the Biden administration planned to change Medicare Advantage payment formulas — a cut to a popular constituent program, some Republican senators argued — to tamp down overbilling and fraud by private insurers. Large Medicare Part C insurers UnitedHealth Group and Humana opposed the changes.

Earlier this month, CMS announced a 1.12% average cut in 2024 reimbursement rates for Medicare Advantage providers, less than a proposed 2.3% drop. The lobbying and protests by insurers led to CMS reducing the cut and also phasing in changes aimed at reducing overbilling over three years.

While these moves can help, there is much more fraud in private Medicare to uncover.

An Inspector General report titled “The Inability To Identify Denied Claims in Medicare Advantage Hinders Fraud Oversight” shows how private insurers are exploiting Part C for financial gain. But the OIG also found that without information concerning specifics about the services for which they are denying payment, the office cannot effectively understand, identify and address waste, fraud and abuse.

Whistleblowers can play a crucial role in exposing and stopping Medicare Advantage fraud in situations where the federal government can’t, as Keller Grover’s case with Ms. Ormsby shows. If you have information regarding Medicare Part C fraud, contact us for a confidential, free consultation. Keller Grover can advise potential whistleblowers about the best path forward from the very beginning, helping minimize the impact of reporting, protect rights and achieve the best possible outcome for the situation.