See 31 U.S.C. § 3729

See 31 U.S.C. § 3730

The False Claims Act rewards and protects people who blow the whistle on someone trying to steal from the federal government. (In some states, laws also protect employees who blow the whistle on someone stealing from the state government.) The act applies to any entity that does business with the federal government, ranging from hospitals and doctors who bill Medicaid and Medicare, to defense contractors, to highway construction contractors.
By statute the whistleblower actually brings the lawsuit. The suit is called a qui tam suit, and the person who brings the suit is called the relator. The lawsuit is filed under seal, and the U.S. government is given time to decide whether it wants to pursue the case.

If the wrongdoer is found liable, the wrongdoer is fined and required to pay three times the government’s damages.

If the United States government pursues the case, the whistleblower is entitled to receive between 15% and 25% of what the government collects. The recovery is limited to 10% if the whistleblower’s action is based primarily on disclosures related to allegations or transactions in court hearings, government hearings or reports, or from the media. Qui tam suits cannot be based on public disclosures in court, government hearings, or from the media, unless the person bringing the suit is the Attorney General, or was an original source of the information.

If the government decides not to pursue the case, then the whistleblower is entitled to pursue the case. If he wins, he will get between 25% and 30% of the recovery, plus costs and attorneys’ fees.
The law allows the court to reduce the percentage paid to someone who planned and initiated the bad conduct. And if the whistleblower is criminally convicted for the theft, the law provides he does not get any percentage of the recovery at all.

If an employee is discriminated against, demoted or fired because he helps with a whistleblower suit, the employee has the right to be made whole. He can be reinstated, and get 2 times the amount of back pay with interest, plus any special damages.

A person may not bring a suit “which is based upon allegations or transactions which are the subject of a civil suit or an administrative civil money penalty proceeding in which the Government is already a party.” 37 U.S.C. § 3730 (e)(3).

See 18 U.S.C. 1514A

Federal law also protects employees who blow the whistle on publicly-traded companies that are defrauding their shareholders or violating the rules of the Securities & Exchange Commission – the SEC. Under the Sarbanes-Oxley Act, it is illegal to “discharge, demote, suspend, threaten, harass, or in any other manner discriminate against” an employee because he reported corporate fraud. 18 U.S.C. 1514A (a).

The law is quite limited, however. Employees are only protected when they provide information about “conduct which the employee reasonably believes constitutes a violation” of federal statutes or SEC regulations governing publicly-traded corporations. 18 U.S.C. 1514A (a)(1). Furthermore, employees are only protected:

* when they provide information about corporate fraud to:

“(A) a Federal regulatory or law enforcement agency;

(B) any Member of Congress or any committee of Congress; or

(C) a person with supervisory authority over the employee (or such other person working for the employer who has the authority to investigate, discover, or terminate misconduct)”,

* or when they file, testify, participate in or otherwise assist in proceedings that have been filed or are about to be filed “with any knowledge of the employer.”

In other words, Sarbanes-Oxley does not cover employee statements to the media or news reporters.

Employees have to act quickly. The statute of limitations is only 90 days from the time the violation occurred. 18 U.S.C. 1514A (B)(2)(D).

Under the Act, an employee who wins the suit is entitled to be made whole. He can be reinstated to his job, get back pay with interest, and receive any special damages such as litigation costs, expert witness fees, and attorneys’ fees.

Although the Sarbanes-Oxley law is limited, it does not preempt state law, which means that the employee also may have state law claims.