U.S. Supreme Court Restricts Whistleblower Protections
Yesterday, the U.S. Supreme Court voted unanimously in favor of restricting the whistleblower provisions of the U.S. False Claims Act. Now, the Court ruled, a whistleblower needs to prove that there was more than just a false statement involved in any sort of government fund or contract. Instead, an employee must prove that the company “intended that the false statement is ‘material’”, according to a report posted on the United Press International.
The ruling stems from a case involving Navy subcontractors tasked with building destroyers. According to the story on the UPI, the Navy contracted with two different shipyards, which needed generators. The shipyards subcontracted with a company called General Tool Co. to assemble the generators, and GTC in turn subcontracted with another group to build the generator’s bases and enclosures. All of the subcontracts reportedly included clauses that require products to have a “certificate of performance,” guaranteeing they met Navy standards.
Two GTC employees blew the whistle on Allison, the subcontractor that built the bases and enclosures, for allegedly issuing certificates of performance under false pretenses. According to the report, a federal appeals court sided with the two employees, but the Supreme Court overturned that decision.
While those two employees can get some satisfaction out of the fact that they discovered allegedly illegal activity, and stopped it in its tracks, they’re probably more concerned with the fact that whistleblowers generally get a cut of any fine levied against a company because of their tip. Now their potentially large payday is in limbo, as they have to wait for the case to be sent through the appellate system once again.
Print This Post



