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New law: Workplace sexual harassment victims can’t be silenced

New landmark legislation ensures workplace victims of sexual harassment or sexual assault can have their days in court — regardless of whatever clauses may be folded into their employment contracts.

During Sexual Assault Awareness Month, we wanted to highlight this new federal protection for workers.

Last month, President Joe Biden signed into law the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021, which passed with bipartisan support. In a nutshell, when there are allegations of sexual assault or harassment, any forced arbitration clauses (often included in employment contracts) are unenforceable. That means victims can pursue litigation, and companies can’t sweep misconduct under the rug in private arbitration. Of course, a victim still has the option to choose arbitration.

A figurehead of the legislation has been Gretchen Carlson, a former Fox News host who sued the cable news network’s then-CEO for sexual harassment in 2016. Before her lawyer came up with the strategy of suing Roger Ailes personally, Carlson’s hands had been tied by a forced arbitration clause that prevented legal action against the network.

Carlson settled her case for $20 million, and a nondisclosure agreement keeps her from sharing details. But Carlson’s suit unleashed a wave of other sexual harassment allegations at Fox News and throughout the media, and Ailes — who denied all claims against him — ultimately was ousted as chairman and CEO.  

The new amendment to the Federal Arbitration Act covers any arbitration or joint-action waiver, whenever it was signed and under whatever level of law (federal, tribal or state).

The act even went so far as to specify that any disputes about whether the new law applies will be settled under federal law by a court, not by an arbitrator.

While business groups laud the speed and cost-efficiency of arbitration, victims often find that it ties their hands and gives the employer the upper hand. They can’t get their days in court — and they have no way to appeal poor arbitration outcomes. California has been battling mandatory arbitration clauses on a broad basis.

At the act’s signing, Vice President Kamala Harris praised the legislation, emphasizing that it applies retroactively to invalidate every forced arbitration agreement in cases of sexual assault.

“Forced arbitration silences survivors of sexual assault and harassment,” she said. “It shields predators instead of holding them accountable and gives corporations a powerful tool to hide abuse and misconduct.  And it compels the people of our nation — and most often the women of our nation — to sign away one of their most fundamental rights: the right to seek justice in court.”

If you’ve faced sexual harassment or sexual assault at work, the experienced employment lawyers at Keller Grover can help. We offer free consultations to help you understand your rights, protections and options. In more than 25 years litigating fraud and employment cases, we have recovered hundreds of millions of dollars for clients and class members.

Sutter Health settlement part of record year for whistleblower recoveries

A record $90 million False Claims Act settlement for the government as a result of a whistleblower lawsuit by a Keller Grover client was among the cases highlighted by the U.S. Department of Justice in a recent announcement touting its 2021 recoveries under the Act. 

On Feb. 1, Acting Assistant Attorney General Brian M. Boynton announced DOJ had recovered more than $5.6 billion from False Claims Act settlements and judgments in the 2021 fiscal year, the largest amount since 2014 and the second-largest amount recorded in the Act’s history.  

The False Claims Act was originally signed into law in 1863 to help combat fraud by suppliers to the U.S. government during the Civil War. It incentivizes whistleblowers to report a fraud on the government by rewarding them a percentage of the amount the government successfully recovers because of the whistleblower’s FCA case. The law also provides protection against retaliation. 

“Ensuring that citizens’ tax dollars are protected from fraud and abuse is among the department’s top priorities,” Boynton said. “The False Claims Act is one of the most important tools available to the department both to deter and to hold accountable those who seek to misuse public funds.”

The vast majority of 2021 recoveries — $5 billion — stems from fraud in the health care industry, DOJ said. Defendants in these cases included drug and medical device manufacturers, managed care providers, hospitals, pharmacies, hospice organizations, laboratories and physicians. 

In its announcement, DOJ highlighted the case of Kathy Ormsby, Keller Grover’s whistleblower client who, together  with the government, settled False Claims Act allegations against Sutter Health for $90 million in August of 2021. 

The settlement marked the largest False Claims Act settlement against a hospital system involving allegations of fraud on the Medicare Advantage Program and the second-largest Medicare Advantage fraud settlement ever.

Ormsby alleged that Sutter Health knowingly submitted inaccurate and unsupported medical diagnosis codes to the Centers for Medicare & Medicaid Services, or CMS, which inflated its Medicare Advantage reimbursements. 

Under the Medicare Advantage Program, CMS pays insurers on a per member, per month or capitated basis. CMS then calculates and increases payments to insurers through a risk adjustment system in which payment increases are based in part on the beneficiaries’ health status, paying more for sicker members and members with costlier health conditions. As such, insurers are required to submit accurate, properly documented diagnosis codes. 

In his comments on the DOJ’s 2021 recoveries, Boynton reaffirmed that Medicare Advantage Program (Medicare Part C) fraud remains an “important priority” for the DOJ.

Boynton also said the government has recovered more than $70 billion since 1986, when Congress passed key whistleblower provisions to the False Claims Act. Congressional leaders are considering another update to the law, the False Claims Amendments Act of 2021, which would be the first amendment to the Act since 2009.   

Whistleblowers play an important role in reporting fraud against the government. With more than 30 years of experience litigating fraud and employment cases, Keller Grover is uniquely positioned to represent whistleblower clients. The firm has recovered billions for its clients.

We are here to help those who want to report wrongdoing. For advice about how to handle suspected fraud, contact Keller Grover for a free and confidential consultation.  

Whistleblowers ‘eyes and ears’ to combat taxpayer fraud

Increases in government spending to address the COVID-19 pandemic “have led to an unprecedented level of theft of federal funds,” Sen. Chuck Grassley (R-Iowa) warned in recent remarks commemorating the 159th anniversary of the False Claims Act on March 2.

In a broadcast by the National Whistleblower Center, Sen. Grassley said such spending has made the law, which is designed to combat fraud of taxpayer dollars, “more important than ever.” 

The False Claims Act, also known as the FCA, was originally signed into law in 1863 to help combat fraud by suppliers to the U.S. government during the Civil War. Sen. Grassley was the driving force behind the 1986 amendments that ushered in a modern era of fraud fighting using the FCA’s so-called qui tam provisions, which incentivize whistleblowers to report a fraud against the government by rewarding them with a percentage of the amount the government successfully recovers because of the whistleblower’s FCA case. 

The FCA has not had a substantial change since 2009, however, Sen. Grassley is now one of the co-sponsors of the False Claims Amendments Act of 2021, which boasts bipartisan support in the Senate. 

The pending amendments are a legislative fix made necessary because of judicial interpretations of dicta (language that is not binding or precedent-setting) in the 2016 U.S. Supreme Court decision in United Health Services v. United States ex rel. Escobar that are inconsistent with what Congress intended in the law’s materiality standard. 

The sponsors of the Amendments Act say that judicial interpretations of a single example in the Escobar decision (that the government’s conduct after a claim is submitted is “strong evidence” that a requirement of the FCA is not material to the government) have made it more difficult for the government and whistleblowers to expose fraud against the government. 

Companies accused of defrauding the government have conducted fishing expeditions to determine if anyone in the government was aware of the alleged fraud, and then argued that if the government was aware, the alleged fraud was not material because the government did not act to stop it. 

Sen. Grassley was critical of this interpretation of the law in his recent remarks. 

“We all know that is not how things work in the real world,” he said. “There are many reasons why the government would continue paying a claim despite knowledge of fraud, such as national security concerns, fear of creating a drug scarcity or simply that they don’t have the legal authority to cease payments.”

He said his legislation would allow the government to continue to hold fraudsters accountable even in situations in which the government continues payment. The law would also make it harder for the Department of Justice to dismiss a whistleblower’s claims and extend whistleblower retaliation protections post-employment, he added.

Sen. Grassley highlighted the $5.6 billion in taxpayer money recouped in 2021 through the FCA, which the Department of Justice recently announced. Among the cases making up the $5.6 billion recouped in 2021 and specifically highlighted in DOJ’s announcement was a $90 Million Medicare Advantage fraud case where Keller Grover represented the whistleblower, Kathy Ormsby. Since its 1986 update, the FCA has helped the government recover more than $70 billion. 

Sen. Grassley ended his remarks by calling the FCA “the most powerful tool the government has to combat fraud,” and praised the whistleblowers who have come forward under it. 

“It’s the brave whistleblowers who make the law successful,” he said. “Whistleblowers are the government’s eyes and ears for uncovering and deterring fraud. Without whistleblowers the False Claims Act would simply not work.”

Keller Grover is committed to helping whistleblowers navigate the process of reporting fraud to the government. 

With over 30 years of experience litigating fraud and employment cases and billions in recoveries for its clients, Keller Grover is uniquely positioned to represent whistleblowers. 

If you want to report wrongdoing in your organization, we are here to help. For advice about how to handle suspected fraud, contact Keller Grover for a free and confidential consultation. 

U.S. Supreme Court to consider California employment law

A California employment law that gives workers more leverage when they’re mistreated by employers has caught the attention of the U.S. Supreme Court, and the docket reflects a flurry of arguments filed by many interested parties — often representing businesses. 

As advocates for California workers, we’re following the issue closely. The high court is expected to make a decision by the summer.

At issue: The California Private Attorneys General Act, better known as PAGA, which provides a way for wronged employees to recover civil penalties — even if they had signed an employment contract with a mandatory arbitration clause. 

Such clauses, popular among employers, force workers to bring up individual claims privately with an employer and an arbitrator — not in courts, and not as a group representing multiple mistreated employees. The Federal Arbitration Act broadly supports arbitration agreements as a way to keep potentially lengthy employment disputes out of the courts — but its application has broadened over the past few decades. Mandatory arbitration tends to stack the deck in favor of businesses, with no venue for employees appealing poor outcomes, and such clauses are present in so many take-it-or-leave-it contracts that people often don’t realize all the rights they’ve waived. Mandatory arbitration also may involve significant up-front costs, and it denies people the right to seek justice through the courts, among other flaws.

California offers a way around that through PAGA, which lets an employee bring an action against an employer on the state’s behalf — as a sort of private attorney general. If money is recouped as a result of state labor code violations, the state gets 75 percent and the involved employees get 25 percent. That may sound like a small portion, but often it is the most promising option and yields not-insignificant payments for wronged workers.

The case that finally caught the eye of the U.S. Supreme Court, Viking River Cruises Inc. v. Moriana, involves Angie Moriana, who worked for about a year as a sales representative for Viking, which offers travel in various locations around the globe via its fleet of ships. Moriana says she wasn’t paid everything due to her, didn’t get meal and rest periods, and didn’t receive accurate wage statements. She submitted a PAGA notice to the state Labor and Workforce Development Agency, which didn’t respond within the allotted time, allowing Moriana to pursue the matter in state court.

To summarize the case in broad strokes, Viking wanted the courts to compel Moriana to submit to the arbitration she had agreed to as a condition of employment, but her lawyers argued that doing so would essentially prevent her from pursuing any of the protections offered under PAGA. The lower court said the piece of her contract that prevented all PAGA action was invalid, and the California Supreme Court said it would not review the case.

Viking maintains that California’s PAGA conflicts with the purposes of the FAA

With the U.S. Supreme Court taking up the matter, parties interested in other pending PAGA cases have filed briefs, as well. Notable names include Uber Technologies, Postmates, the California New Car Dealers Association, the U.S. Chamber of Commerce, and the Restaurant Law Center, among others.

Several of those groups also are trying to attack PAGA via the ballot box in November.

It’s a complex issue, with the high court’s decision holding significant ramifications for California workers — and for other states considering legislation similar to PAGA.

If you are in conflict with a current or former employer, the experienced employment lawyers at Keller Grover can help. We offer free consultations to help you understand your rights, protections and options. In more than 25 years litigating fraud and employment cases, we have recovered hundreds of millions of dollars for clients and class members.

Whistleblower plaintiffs score win in California Supreme Court

In a significant ruling for California workers, the California Supreme Court recently clarified that a whistleblower retaliation plaintiff and others like him have a lower bar to sue their employers. 

The high court’s Jan. 27 ruling came after the U.S. Court of Appeals for the Ninth Circuit asked it to clear up California courts’ mixed approach to what evidentiary standard applies in these cases. 

Some courts have applied the McDonnell Douglas test — named for the 1973 U.S. Supreme Court case McDonnell Douglas Corp. v. Green — to employees’ cases, which plaintiffs have argued was contrary to the more relaxed evidentiary standard set out in California Labor Code section 1102.6. 

Under the McDonnell Douglas test, an employee must first establish that they have all the elements necessary for a claim of unlawful discrimination or retaliation. Once established, the burden shifts to the employer to prove they had a legitimate reason for taking an adverse action against the employee. The burden again shifts back to the employee to show that the employer’s given legitimate reason was pretextual – that is, it wasn’t the real reason why the employer discriminated or retaliated against the employee. 

Section 1102.6: A Lower Bar

In comparison to the standard set in McDonnell Douglas, California law sets out a lower bar for plaintiffs to meet in California Labor Code section 1102.6.

First, an employee needs to establish by a preponderance of the evidence that retaliation was a contributing factor in their termination, demotion or other adverse action. In other words, they need to show that it’s more likely true than not that retaliation was a contributing factor for the employer’s action against the employee.  

Next, the employer bears the burden of demonstrating by clear and convincing evidence – a higher standard than a preponderance of the evidence – that the employer would have taken the same action “for legitimate, independent reasons.” 

The California Supreme Court ruled that the latter standard applies. It held that requiring a plaintiff to satisfy the McDonnell Douglas test would place an unnecessary burden on plaintiffs that was inconsistent with the state legislature’s purpose in enacting section 1102.6. 

Court revives whistleblower suit

After the California Supreme Court issued its ruling, on Feb. 9, the 9th Circuit reversed a lower court ruling in the case of Lawson v. PPG Architectural Finishes, Inc., allowing a whistleblower’s retaliation suit to proceed in the U.S. District Court for the Central District of California. 

The whistleblower in the case is Wallen Lawson, who worked as a territory manager for PPG, a paint and coatings manufacturer. Lawson was responsible for stocking and merchandising paint in Southern California Lowe’s stores before he was terminated in 2017.

Lawson alleged he was wrongly terminated after blowing the whistle on his supervisor, whom he said ordered him to intentionally tint slow-selling paint products to the wrong color so that PPG could avoid buying back unsold paint from Lowe’s. 

He accused PPG of violating California Labor Code section 1102.5 by firing him because of his actions as a whistleblower. 

The California Supreme Court’s ruling is good news for plaintiffs, who will not be held to a higher standard to bring their cases forward. 

Want to report wrongdoing?

Whether you’re facing retaliation for reporting wrongdoing in the workplace, or are aware of fraud against the government occurring in your workplace, Keller Grover is here to help. 

With over 30 years of experience litigating fraud and employment cases, and billions recovered for its clients, Keller Grover is in a unique position to represent whistleblower clients. For advice about how to proceed as a whistleblower, contact Keller Grover for a free and confidential consultation.

 

 

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