Articles Tagged with whistleblower lawsuits

800px-Cubicle_landIt can be perilous for a single individual to expose a company’s illegal acts. Whistleblowers, as these courageous people as called, risk losing their jobs, damaging their reputations, being ostracized by coworkers and neighbors, and other detriments by daring to speak up.

Federal and state legislatures recognize the dangers and have enacted whistleblower laws, which protect those who come forward from retaliation by the persons or businesses they identify as engaging in illegal conduct. False Claim statutes also provide whistleblowers with legal recourse. These laws allow for qui tam lawsuits, which allow a person to sue an individual or business believed to have defrauded the government of public funds to recover the illegally obtained money. The person bringing suit is referred to as a “qui tam plaintiff,” and can possibly receive a large percentage of the funds collected from the wrongdoers.

By allowing whistleblowers to bring a civil action, governments acknowledge the public service whistleblowers fulfill and the hardships they endure as a consequence of their exposing fraud.

800px-Cyber_Security_at_the_Ministry_of_Defence_MOD_45153617Your San Francisco qui tam lawsuit and whistleblowers’ lawsuit attorney understands and appreciates the important role whistleblowers play in American society. Whistleblowers are instrumental in exposing fraud, waste, dangerous or hazardous conditions, and other instances of “bad behavior” that put people’s health and wellbeing in jeopardy or unreasonably threatens property or taxpayer money. Whistleblower actions and lawsuits have, for example:

  • Uncovered unsafe working conditions on job sites;
  • Exposed contaminants and dangerous chemicals present in the food and/or water supply;

784px-Fox40-black-whistleIt is no secret that employers are not particularly fond of whistleblower laws. These laws not only provide financial incentives for those employees or stakeholders who know of a company’s wrongdoing to come forward, but they also prevent an employer from discouraging whistleblowers through the use or threat of retaliation. Despite the existence of these laws, however, companies may still try to find ways to dissuade potential whistleblowers from making reports to government agencies and/or filing suits under the False Claims Act. That, at least, is what one California company is accused of doing recently.

A (Failed) Preemptive Strike Against Whistleblowers

As opposed to retaliating against employees who had filed whistleblower claims against the company or reported the company’s activities to government authorities, California-based Health Net allegedly tried to accomplish this goal before any claim had been filed. Allegations made against the company state that Health Net made employees sign an agreement in which they acknowledged that they would not receive any severance from the company if they reported the company to a governmental agency and/or participated in a whistleblower lawsuit against the company. In other words, any employee that wished to obtain any sort of severance pay or benefits from the company needed to keep quiet about any illegal or unethical behavior in which they observed the company engaged.

Haircut 8The insurance carrier for the for-profit Marinello Schools of Beauty has agreed to pay over eight million dollars to settle a qui tam (whistleblower) lawsuit filed against the school’s operator by six former employees. According to the suit, B & H Education, Inc. – which operates the Marinello Schools of Beauty in various locations throughout Southern California – allegedly assisted students without a high school diploma in obtaining invalid diplomas. These students would then enroll in the school and obtain federal financial aid for which the students were not eligible (federal regulations require recipients of federal student aid to have obtained a valid high school diploma). As part of the settlement, B & H Education, Inc. has admitted to no wrongdoing.

Details of the Qui Tam Lawsuit and Allegations

The lawsuit was brought by six former employees of B & H Education, Inc. against the insurer after the education company went out of business in early 2016. According to the allegations of the plaintiffs (who filed the suit on behalf of the United States), B & H would assist students in obtaining a high school diploma by allowing them to take unproctored tests, use aids like cellphones while taking tests, and enabling students to retake the same tests over and over until they were successful. Upon “successfully” completing their high school diploma in this manner, the students would then enroll at the beauty school and obtain federal student aid. The company’s schools were allegedly kept in business through the federal student loan monies that students would receive (and then pay to the school for tuition expenses and other educational costs).