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Federal Contractor Whistleblowers Now Permanently Protected from Retaliation

December 20, 2016. Congress recently passed legislation extending and making permanent certain protections from retaliation for government contractors that blow the whistle on a host of problem areas relating to federal contracts and funds. This is good news for federal contractors and the public at large as the law is broad both in terms of the type of employees covered (including subcontractors and direct personal service contractors), as well as types of disclosures protected (ranging from waste of federal funds to public health and safety dangers). Specifically, employees of a “contractor, subcontractor, grantee, or subgrantee, or personal services contractor” are protected from reprisal for reporting gross mismanagement, an abuse of authority, substantial public health and safety dangers, or violations of any laws, rules, or regulations related to Federal contracts or grants. The law also protects these same whistleblowers against reprisal for reporting gross waste of federal funds. See 10 U.S.C. § 2049, 41 U.S.C. § 4712.

The bulk of these protections were first implemented in the 2013 National Defense Authorization Act (“NDAA”), which protected civilian contractors as part of a four-year pilot program that has now been extended indefinitely. The recent amendments also extend protections to personal services contractors, who contract their services directly with the Government, but had not previously been covered. Finally, the legislation extends to subcontractors the prohibition against Federal Government reimbursement of contractor litigation costs incurred in defending against whistleblower retaliation claims.

The Senate Report’s stated purpose of the bill was to “improve the whistleblower rights of Federal contractors working on Federal contracts, grants and other programs.” Those who report waste, fraud, or abuse of federal funds cannot be demoted, discharged, or discriminated against as a result. To be protected, however, the report must be made to an appropriate person or entity denominated in the statute, namely a Congressional representative, the Inspector General, the Government Accountability Office, the Department of Justice or law enforcement agency, a court or grand jury, or an employee responsible for contract oversight, management, or addressing misconduct.

The Federal Circuit has defined gross mismanagement as “a management action or inaction which creates a substantial risk of significant adverse impact upon the agency’s ability to accomplish its mission.” Kavanagh v. M.S.P.B., 176 F. App’x 133, 135 (Fed. Cir. 2006). The Federal Circuit has also explained that “[a]n abuse of authority requires an `arbitrary or capricious exercise of power by a federal official or employee that adversely affects the rights of any person or that results in personal gain or advantage to himself or to preferred other persons.’” Elkassir v. Gen. Servs. Admin., 257 F. App’x 326, 329 (Fed. Cir. 2007).

Whistleblower claims that are brought under the NDAA enjoy a favorable burden of proof and causation standard, which requires a whistleblower to show only that his or her reporting was a contributing factor to the personnel action taken. This can be demonstrated through a showing of knowledge and temporal proximity. And NDAA whistleblowers enjoy a full panoply of legal remedies, including fee shifting.

Because the NDAA’s scope is broader than that of the False Claims Act (“FCA”), whistleblowers who are considering bringing a claim under the FCA and who have also experienced retaliation should consider using the two statutes in tandem to take advantage of the NDAA’s additional protections. Unlike the FCA, however, the NDAA includes an administrative exhaustion provision, requiring claims to be filed initially with the Office of Inspector General. Expert legal counsel is thus helpful to navigate these statutes and ensure their whistleblower protections are triggered.

If you have information about federal contractor fraud or have experienced retaliation in connection with reporting waste, abuse, or dangers related to federal contracts or grants and would like to discuss your options with an attorney, please contact the experienced whistleblower lawyers at Tycko & Zavareei LLP.

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