Preventing False Claims Act Retaliation Claims: What Every Company Should Know — EnforceMintz

False Claims Act (FCA) retaliation claims pose a unique challenge for health care employers. Unlike FCA fraud cases, these claims are easier to prove and often survive even when the underlying FCA allegations fail. With Rule 9(b)’s heightened pleading standard out of the picture, employers face real exposure if they lack strong documentation and a culture that supports compliance. This article outlines practical steps, such as consistent recordkeeping and clear non-retaliation policies, to help organizations mitigate risk and protect against costly litigation.

KEY POINTS:

• FCA retaliation claims are easy to bring and hard to defend. Employees need only show minimal evidence to establish a retaliation claim, and these claims can survive even if the underlying FCA allegation fails.
• Proper documentation is critical. Consistent, contemporaneous documentation of performance issues and disciplinary actions is one of the strongest defenses against retaliation claims. Clear protocols and uniform application across employees are essential.
• A strong compliance culture is important. Companies should embed non-retaliation policies in their Code of Conduct, provide confidential reporting channels, and reinforce compliance through regular training and communication to reduce whistleblower risk.
• Privilege should be managed carefully. Dual roles for in-house counsel can complicate privilege protections. Separate investigations from employment decisions, engage outside counsel early when FCA exposure is possible, and train stakeholders on privilege best practices.

This article is part of EnforceMintz: Healthcare Enforcement Trends in 2025 & 2026 Outlook, a series exploring key developments and practical strategies for health care organizations navigating enforcement risks. Read more articles from EnforceMintz to stay current on enforcement trends and compliance strategies.

Why FCA Retaliation Claims Are Hard to Avoid in Health Care

FCA settlements and judgments result in billions of dollars a year in annual recoveries. Health care companies — particularly managed care organizations, hospitals, and other medical facilities — face FCA cases more often than any other sector. Most FCA lawsuits are initiated by qui tam whistleblowers who are overwhelmingly current or former employees, which means that many FCA cases pose additional risk presented by retaliation claims.

Minimal Showing Required

FCA retaliation claims are especially challenging to avoid given the minimal showing a plaintiff must make to establish a claim. A current or former employee need only show that:

• They engaged in protected conduct
• The employer knew about it
• The employer took an alleged adverse action because of that conduct

Once an employee makes this initial showing, the burden shifts to the employer to articulate a legitimate, non-retaliatory reason for the action. The burden then returns to the employee to prove that the employer’s stated reason was a pretext for retaliation.

Lower Pleading Standards

Unlike in typical FCA lawsuits, Rule 9(b)’s heightened pleading standards do not apply to retaliation claims. And retaliation claims can survive even if the company ultimately prevails against an FCA claim. For example, in United States ex rel. Kini v. Tata Consultancy Services, Ltd., the US Court of Appeals for the DC Circuit recently affirmed the dismissal of an FCA claim in which a whistleblower alleged that the company had evaded obligations to pay higher payroll taxes and visa fees but reversed the dismissal of the whistleblower’s FCA retaliation claim. The court determined that the whistleblower plausibly alleged that he engaged in protected conduct by submitting detailed reports of suspected fraud to the company’s CEO and vice president of human resources, and that the company retaliated against him.

Why This Matters

Against this backdrop, what may seem to an employer like a routine or well-founded personnel decision can quickly spiral into costly litigation if not handled properly. The good news is that employers can take concrete, proactive steps to mitigate these risks. This article outlines practical strategies to help employers proactively manage risk and be prepared to defend against a claim of retaliation under the FCA.

Tip 1: Document Early, Often, and Consistently

Why Documentation Matters

Solid documentation is one of the most powerful tools a company has to defend against FCA retaliation claims. These claims often arise years later, long after key supervisors and human resources, legal, or compliance personnel have moved on. Without strong, contemporaneous documentation, an employer risks facing a “he said / he said” situation should a judge or jury need to weigh the credibility of competing narratives.

Establish Clear Protocols

To avoid litigation hinging on a credibility battle, an employer should start by developing and enforcing clear and consistently applied protocols for documenting performance issues, disciplinary actions, and workplace misconduct. Records that predate any alleged whistleblowing activity can be especially persuasive in proving that a termination or other adverse action was based on legitimate, non-retaliatory reasons.

Standardize Performance Reviews

Companies also should standardize how they evaluate employee performance and investigate behavior or disciplinary issues. Use consistent review cycles, such as annual or semi-annual evaluations, and clearly document the reasons for performance ratings, any corrective actions, and follow-up steps. Just as importantly, apply these procedures uniformly across similarly situated employees.

Avoid Inconsistencies

Inconsistent treatment or vague, undocumented justifications give plaintiffs potential grounds to challenge the action. A clear, consistent, and well-documented process makes it significantly harder for an employee to claim that an employer’s stated reason for termination was not legitimate.

Tip 2: Foster a Culture of Compliance

Create a Safe Environment for Reporting

Creating a culture where employees feel safe speaking up starts with transparent leadership and clearly communicated compliance standards accompanied by protocols. When those standards and protocols are clearly communicated and reinforced, it becomes much harder for an employee to claim that the company ignored compliance or discouraged reporting.

Embed Non-Retaliation Policies

Embed explicit non-retaliation policies in the Code of Conduct and employee handbook and include compliance reporting procedures in those same documents. These documents should be written in plain language and easily accessible to all employees.

Provide Accessible Reporting Channels

Companies should offer clear, accessible channels for reporting concerns confidentially or anonymously, such as hotlines or secure online portals, and communicate how those reports will be handled. Employers also should reinforce that all reports are taken seriously and investigated promptly, and that retaliation will not be tolerated.

Reinforce Through Training and Communication

Repetition helps, too. Regular touchpoints — such as onboarding, periodic training, bulletins, and team meetings — should be implemented. Repetition builds awareness, signals that leadership takes compliance seriously, and helps foster a culture where employees feel safe reporting concerns without fear of retaliation.

Respond Carefully to Civil Investigative Demands

Receipt of a Civil Investigative Demand (CID) from the Department of Justice could signal the presence of a whistleblower, though the company may not know the individual’s identity. In such a situation, a company should prioritize maintaining the confidentiality of any internal investigations and ensure strict adherence to established procedures.

Tip 3: Beware of the Two-Hat Role of In-House Counsel

Many companies rely on in-house counsel to serve in dual legal and compliance roles. While such an approach has its advantages, it can complicate the ability to preserve attorney-client privilege and to clearly delineate legal versus compliance functions when litigation arises. To navigate these challenges, companies should implement practical protocols around privilege protections, information flow, and the separation of legal and compliance responsibilities. Keep in mind these key strategies:

• Separate investigations from employment decisions. Avoid delegating responsibility for investigating a compliance-related complaint and making employment decisions about the complaining employee to the same individual, such as the general counsel or chief compliance officer. Assign factual investigations to compliance or human resources personnel.
• Engage outside counsel when legal exposure is foreseeable. If a complaint raises potential FCA liability or whistleblower risks, bring in external counsel early. Outside counsel can lead privileged investigations and help structure legally protected communications from the start.
• Be clear about the purpose of communications. Document whether a communication is intended to provide legal advice (and thus is privileged) or is for business or compliance purposes (and likely discoverable). Set clear expectations for meetings, emails, and reports, and avoid mixing privileged and non-privileged content.
• Train key stakeholders. Educate executives and human resources, compliance, and legal personnel on how privilege works, when it applies, and how to avoid inadvertent waiver.

Conclusion

A company can — and should — confidently take appropriate employment actions when justified. At the same time, the risk of an FCA retaliation claim remains a real and growing concern. The guidance above is intended to help mitigate that risk and preserve critical defenses should a claim arise.

Get early access to Part 2 of EnforceMintz

The next edition of EnforceMintz — our annual False Claims Act Statistical Year In Review — will analyze trends in FCA cases using data from DOJ’s recently released annual report on FCA settlements and judgments.

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