Whistleblowers Who Report Fraud in Federal Contractor and State Contractor Work Are Protected by Law

Fraudsters seem to find federal and state contracts especially tempting because of the size of the potential payoff and the scale of federal or state contracts, making tight oversight seem almost impossible. Defense contractors, highway contractors, and contractors working on oil and gas leases are no exception. Employees who see federal and state contract fraud and raise the alarm are the taxpayer’s first defense. Being a whistleblower is a perilous endeavor. Whistleblowers risk being fired, blackballed, sued, harassed, and may experience retaliation. Fortunately, whistleblowers have many protections provided by federal and state law.

The federal False Claims Act (FCA) does more than protect employee rights. In recognition of the essential role whistleblowers play, whistleblowers may sometimes share in the government’s financial recovery. A successful FCA claim may take painstaking and meticulous work, however.

Whistleblower Lawyers Can Explain Federal and State Whistleblower Procedures

In 1983, the Texas Whistleblower Act was passed for employees of state and local governments. It protects public employees from retaliation, termination, or other adverse actions by their employers. Our whistleblower lawyers help employees who may wish to be whistleblowers assert claims under whistleblower protection laws including the FCA and the Texas Whistleblower Act. Click here to read more about Whistleblower Protection. If you believe your employer is engaged in federal or state contract fraud, reach out to us using this link Contact Kilgore Law.

Fraudsters Find Many Ways to Cheat

It may help to take a clinical eye to shady practices, especially if they happen where you make your living. Federal contract and state contactor fraud can take a variety of forms, as described in part below.

Contractors or subcontractors may deliberately deliver substandard goods or services that are not what is called for in the contract.

One of the most common violations of the FCA involves overbilling the government for the cost of services and goods or charging the government for labor and materials that were not delivered.

At the beginning of the contracting process, contractors may engage in fraud by providing false information about their or their subcontractors’ qualifications or misrepresenting other critical information to win a contract. This practice is commonly known as false certification. It involves deliberately failing to disclose noncompliance with a material statutory, regulatory, or contractual requirement.

Falsely certifying compliance with certain labor standards is a closely related problem. This may involve failing to pay construction workers at least the prevailing wage in the same locality. Contractors are also responsible for submitting wage certifications of payroll for all their subcontractors, commonly known as payroll certification.

Bid rigging and price-fixing involve schemes between ostensible competitors to manipulate the bidding process. These generally involve unlawful agreements not to compete for government contracts or to limit the price on the bids submitted.

Whistleblowers Often Feel the Risk is Worth It

Many whistleblowers embrace the risk to their employment out of a sense of altruism. Their sense of self-sacrifice may be considered unselfishness. Whistleblowers sometimes share in the fines paid by government contractors who were found guilty, but a financial reward may not be a motivating factor.

These types of contractor claims are sometimes referred to as qui tam claims, which is the shortened version of the Latin phrase, “qui tam pro domino rege quam pro se ipso in hac parte sequitur,” meaning “[he] who sues in this matter for the king as well as for himself.” The whistleblower essentially acts on behalf of the government because he or she is often the only person in a position to know about the fraud.

As another oddity of language, the whistleblower is technically known as the relator, as in the one who can tell or relate the facts.

An FCA claim must involve knowing fraud on the part of the contractor or subcontractor. The accidental delivery of nonconforming goods or a good-faith mistake about a subcontractor’s pay scale might give rise to a breach of contract or some other lawsuit, but it would not qualify as an FCA claim. A variety of federal and Texas laws may apply to facts initially brought forward as a potential FCA claim. Even if an FCA claim proves unworkable, that is not necessarily the end of legal options available to an employee who has taken on the task of reporting wrongdoing.

When a whistleblower decides to proceed, a qui tam claim must be filed with the court under seal. The complaint and disclosure of all relevant information about the claim are initially served on the U.S. Attorney for the judicial district where the qui tam claim was filed and on the Attorney General of the United States. The complaint is sealed for a period of 60 days. This means that the identity of the whistleblower is protected. It also protects the alleged fraudster from public disclosure in the event the government decides not to proceed.

During that 60-day period, the government investigates the allegations in the complaint; thereafter, it will notify the court whether it has decided to proceed or not. If the government chooses to intervene in the claim, it takes over the primary responsibility for prosecuting the action. It can dismiss or settle the action even if the whistleblower objects, as long as the whistleblower has a hearing and the court determines that the settlement is fair. If the government chooses not to proceed, the whistleblower may continue alone in the pursuit of justice.

If the government intervenes, the whistleblower can receive between 15 and 25 percent of the amount recovered by the government. If the government declines to intervene in the action, the whistleblower’s share may be larger, but there are also circumstances in which the share may be reduced. If a qui tam action is successful, the whistleblower may also recover legal fees and other expenses.

Other Texas Laws Protect Whistleblowers from Retaliation

Even if the situation an employee brings forward for investigation does not ultimately qualify as an FCA claim, many Texas laws protect whistleblowers from retaliation, including unjust termination of employment. The best recourse for someone who is troubled by questionable workplace practices, especially those involving federal contractors and Texas state contractors, is to reach out to a whistleblower lawyer for a confidential consultation.

Potential Whistleblowers Should Contact Us Before They Take the First Step

Our Texas whistleblower lawyers can help you assess your legal situation and advise on the best strategy for tackling this and related situations. If you would like to know more about whistleblower protection laws, please click this link Dallas Whistleblower Protection Attorney. Here is another article that may be useful to your understanding of whistleblower and retaliation law that you may find interesting, just click here Sabine Pilot Rule Expands Whistleblower Causes of Action. We offer a free evaluation of the facts of your case. To get this started, use this link Contact Us to reach us.

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