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One of the most tricky questions to surface — routinely–in the representation of False Claims Act whistleblowers is the extent to which the whistleblower or “relator” may make use of company documents, including confidential or even privileged documents. We are often asked this question and wish that there were a simple answer. There is not. There are some general guidelines based on the case law and positions the U.S. Department of Justice has taken in cases, but this is one of those questions where the lawyer’s response should not include the words “always” or “never.”
Let’s take the paradigm case. Employee starts with a company and as part of the orientation process typically gets a number of packages to review and/or sign. Here’s the 401(k) plan, here’s the health insurance list of choices, here’s the key to the men’s room, here’s the phone directory, and oh yes, here’s our confidentiality agreement which you should review and sign and get back to us… Let us know if you have any questions. Of course, it’s a bit of a buzzkill to start your first day at this great new job saying “Ah, excuse me, but this document is a bit one-sided and I don’t think I’m comfortable with it.” So employees routinely sign these employer-drafted confidentiality agreements with about as much review as you would give to the fine print on the back of a ski ticket.
It’s only later, if a problem ensues, that the employee takes a hard look at what he’s agreed to. Usually, these agreements state explicitly that all documents, in whatever form, are the property of the company and are not to be removed from the premises except with permission, and may not be retained for any purpose after the employee leaves employment at the company. Many such agreements go on to say that the employee understands he may be sued and agrees to draconian penalties if he does take documents.
Most qui tam whistleblowers go through an evolutionary process before deciding to sue their employer or former employer. Usually, these people had no plan whatsoever to cause trouble for their company; they were just normal people trying to do their jobs. But somewhere things went awry, and the employee started to notice a problem that might be fraud-related. All too often, the company doesn’t like the message he is delivering. We don’t hear about the cases where companies take action to make things right (we’re sure they’re out there). All too frequently, companies punish the messenger rather than correcting the problem. Even then, employees who know of wrongdoing often are undecided about what to do.
Coming back to the question of documents, the reality is that a potential whistleblower typically has had access throughout his employment to massive amounts of data (email, presentations, company memos, and the like). The worried employee usually starts to make a mental inventory or list of problematic documents as he sorts through his options. Ultimately, if the employee decides to become a False Claims Act whistleblower, he has a statutory obligation to turn over to the government (the real party in interest) everything he knows about the fraud, including documents. So he copies the key documents onto a thumb drive and turns it over to the feds, right?
Probably. But there are some important caveats.
You can’t bring a qui tam suit without an attorney, and one of the first things you should do is to go over with your attorney what you have in your possession (a) that you think is relevant to the fraud and (b) that the company would consider to be its property. Some sorting needs to be done and should not be done without the advice of an attorney.
As you can see below, this is a complicated issue. Do not try to navigate this thicket without the advice of a whistleblower lawyer.
It’s best for whistleblowers to limit copying to documents that were appropriately accessible during the course of their employment. Courts tend to react very differently to situations where the employee has gone on a widespread search throughout the company than where the employee simply made copies of things coming through his inbox. Compare, for example, U.S. ex rel. Cafasso v. General Dynamics, in which the court allowed the defendants’ counterclaims to proceed and condemned the whistleblower’s “wholesale” collection of documents, with U.S. ex rel. Grandeau v. Cancer Treatment Centers of America, in which the government robustly defended the relator’s right to bring to its attention all the evidence of fraud she had come across. So while there’s no problem considering “how broad might this problem be?” or even talking to other people about that question, there may be a risk in searching for files beyond your scope of employment. (And note: companies can and do routinely check the computers of departing employees to determine forensically what documents have been forwarded or copied to thumb drives.)
Understand that attorney-client privileged documents, trade secret documents, and patient privacy (HIPAA)-implicating documents represent special situations–even if they are directly relevant to fraud. Some documents, quite appropriately, deserve the utmost care. The last thing the government or your attorney wants is to taint the government team or cause unintended consequences to a third party that could have been avoided. So before turning anything over to the government, your legal team has to go through the documents with care, flagging these categories of documents, withholding some, and redacting others. It’s painstaking work, but the government will greatly appreciate your team’s careful approach and you will have saved yourself from major headaches down the line.
Caveat Four: If you are an attorney and thinking of being a relator against your client or your former client (e.g., former in-house counsel), understand that courts can’t stand this fact pattern. Judges typically view your exalted status as an attorney as carrying with it certain key obligations of secrecy, confidentiality and privilege, and they will in most instance find a way to bar you from trading on the client’s confidences. See, e.g., U.S. ex rel. Fair Laboratory Practices Associates v. Quest Diagnostics and Unilab Corp.
Generally, the whistleblower’s statutory obligation to produce relevant information to law enforcement trumps the company’s interest in keeping documents confidential. See e.g., Town of Newton v. Rumery, 480 U.S. 386, 392 (1987) (a promise is unenforceable if the interest in its enforcement is outweighed in the circumstances by a public policy harmed by enforcement of the agreement.) See also XCorp. v. John Doe, 805 F. Supp. 1298, 1310 n.24 (E.D.Va. 1992) (observing in an FCA case brought by defendant’s attorney that confidentiality agreements that prevent an individual from disclosing evidence of fraud to the government are void as against public policy). So you’re on solid ground to start.
The tricky part comes if the government declines the case and you decide to go forward anyway. As surely as night follows day, counterclaims will come, asserting breach of contract, conversion, misappropriation, and the like. In discovery, the company will learn what documents were turned over to the government and anything else that was taken from the premises. See e.g., U.S. ex rel. Wildhirt v. AARS Forever, Inc., 2013 WL 5304092 (N.D. Ill. 2012) (sorting through counterclaims and categories of documents and determining which were relevant to an FCA prosecution and which were not and therefore unprotected).
If the case settles, these issues almost always go away. The case is over, and defendants usually don’t want to look retaliatory by suing the relator afterwards for doing something the law protects. However, if there’s no settlement and the employee goes forward anyway, the gloves will come off.
A whistleblower should anticipate a future battle with his employer over documents and take steps to protect himself. Step one is to consult with an attorney. In addition, we recommend that employees:
• Copy only what they reasonably had access to
• Take only copies, not originals, of documents
• Review with their attorney prior to disclosure all of the issues shown in the documents
• Stay away from privileged and trade secret documents, or segregating them
• Redact, as necessary, patient information protected by privacy laws
With these basic guidelines in place, a whistleblower stands a much better chance of defending a claim that company documents were improperly turned over to the government.