In a recent False Claims Act case, a whistleblower obtained a favorable ruling on the remedies available for False Claims Act whistleblowers. In Mooney v. Americare, the whistleblower alleged retaliation for disclosing kickbacks from fraudulent referrals and the fraudulent alteration of documents submitted to Medicaid and Medicare. In particular, Judge Block held that back pay is doubled before the court offsets the value of interim earnings (also known as mitigation).

False Claims Act Whistleblower Protection Remedies

Under the False Claims Act’s whistleblower protection provision, a prevailing whistleblower is entitled to “all relief necessary to make that employee, contractor, or agent whole,” which includes reinstatement, double back pay, interest on the back pay, special damages, and attorney’s fees and costs.  In Mooney, the court addressed the issue of whether the whistleblower’s back pay (lost wages and benefits that Mooney would have been paid absent the retaliation) should be reduced by the amount of her interim earnings before the back pay is doubled, or whether instead back pay should be doubled before the court applies an offset for mitigation.

Judge Block held that back pay damages should be doubled prior to subtracting any mitigation income because such an interpretation:

• comports with congressional intent that an employee who suffered retaliation is best made whole by recovering double back pay;

• prevents defendants from benefitting from the whistleblower’s successful mitigation efforts; and

• prevents defendants from avoiding the double-damages provision by tendering the undoubled amount in mitigation prior to judgment. 

Implications for Whistleblowers

This decision highlights the significant potential exposure for employers in False Claims Act whistleblower cases.  Double back pay and special damages (damages for emotional distress and harm to reputation) can yield large jury verdicts.