Restrictive Covenant Clauses and False Claims Act Cases

Some employees with information about fraud are reluctant to start a False Claims Act case due to fear of retaliation. In some cases, employees fear they will face legal difficulties due to non-disclosure agreements with their employer.

If you have information about fraud against the government and are interested in being a whistleblower, you should consult with an experienced DC attorney. They could explain how restrictive covenant clauses impact False Claims Act cases and determine how they could apply to your situation.

Non-Disclosure Agreements

It usually not the case that a non-disclosure agreement signed as part of an employment contract can prevent a whistleblower from having the right to file a False Claims Act case. A specific waiver of a general release of lawsuits, however, is a much more complicated analysis. For example, if a whistleblower signs a release pursuant to another employment law case, jurisdictions differ as to how much, when, or whether such a release can interfere with this process.

One thing to remember when it comes to restrictive covenant clauses and False Claims Act cases is that when an individual is reporting information to the government, they are not taking a trade secret and giving it to a competitor. It is a different action in kind to pursue a matter on behalf of the government, and the right to do so is a bit harder to waive and more restricted.

The defense will typically do everything they can to fight that and find a way to enforce these kinds of things. However, a non-compete or non-disclosure agreement is ordinarily not going to infringe upon a person’s right to go to the government with evidence of fraud against the government. Obviously, these kinds of issues are appropriate to raise with counsel and determine prior to filing a case.

NDA Affects on Filing

Generally, an NDA shouldn’t affect filing a False Claims Act case very much, depending, of course, on what and whom they were reporting. Reporting fraud to the government is usually considered to be protected by public policy, it is supposed to be something that people cannot just sign away easily. So, an NDA on its own could probably not accomplish that. Obviously, though, it depends on the circumstances and the specific agreement.  One thing to remember is that reporting to the government is a little different than taking intellectual property to a commercial competitor, for which there would not be the same kind of public policy issue.

NDA and Exposure to Liability

Almost anything can expose you to liability, and since anything can expose anyone to liability at any given time, the smart thing to do with an NDA would be to keep a copy of it and show it to your attorney before taking any action to blow the whistle. Generally, the right to blow the whistle to the government is going to be difficult to restrain under a non-disclosure agreement depending on the terms.

However, there may be issues with respect to restrictive covenant clauses and False Claims Act cases that may expose you, or there may be specific issues with respect to certain kinds of information as well. There are always circumstances that can give rise to new kinds of liabilities, so obviously you are going to want to talk to your lawyer about this in as much detail as possible.

Difficulty Filing a False Claims Act Case

If a federal government employee has a job to investigate fraud, and they are a factor in the area of their inspection, they might not be an appropriate person to bring  a case. One has to bring information to the government voluntarily. If a person is already convicted of a crime related to the fraudulent activity they want to report, or if they planned and initiated the fraud, they may have a bit of a problem bringing the case.

Alternatives to a False Claims Act Lawsuit

Almost any other alternative will not have the same power and weight as bringing a case under the Federal False Claims Act would. However, individuals may have other options. The first thing a person needs to do is determine if there is a precedent to bring that case.

When a person brings a case, there might be no better way to get the government to sit up and take notice of that activity conducted by a company than if they can make a good-faith allegation that a person or company is committing fraud against the United States. The Department of Justice does investigate these cases and has pursued them in the past. While there may be other alternatives, the fact of the matter is that the first alternative to look at if someone wants to report fraud against the government is the False Claims Act.

Consult with an Attorney About Restrictive Covenant Clauses and False Claims Act Cases

Even if you are bound by restrictive covenant clauses in your employment contract, you may be eligible to bring a False Claims Act lawsuit. The first step, though, is to sit down with a whistleblower lawyer and discuss your case.

An attorney in Washington, D.C. could explain your legal options and provide expert guidance through every step of the case. Call today to set up a consultation.