On August 26, the U.S. Court of Appeals for the Third Circuit issued an order reaffirming that potential False Claims Act (FCA) whistleblowers are not immune from being fired for workplace misconduct, especially where that misconduct involves “oinking” at co-workers.

The plaintiff in Crosbie v. Highmark Inc. worked as a fraud investigator for the defendant health insurance companies. After an audit in early 2017, he discovered that several doctors in the defendants’ network had felony convictions and that others lacked necessary Medicaid licenses. He reported his concerns to his manager on multiple occasions, but the defendants never took any action.

However, just over a year later, one of the plaintiff’s co-workers complained that the plaintiff “oinked” at her and called her “Miss Piggy.” The defendants’ human resource team investigated the complaint and substantiated the allegations after the manager told the investigators that the plaintiff had coughed and snorted at him earlier that day. The plaintiff was fired a few days later and he filed a lawsuit alleging retaliation under the FCA soon after. See 31 U.S.C. § 3730(h). The defendants responded that they had valid reasons to fire the plaintiff and, in any event, the investigator who decided to fire him did not know about the fraud reports. The district court agreed and granted summary judgment for the defendants.

On appeal, the plaintiff argued that he was fired for reporting fraud—and not for oinking—because (1) the defendants’ investigation was a sham and (2) regardless, the manager helped substantiate the oinking allegations because he wanted the plaintiff fired, i.e., a cat’s paw. The Third Circuit rejected both arguments and affirmed the district court’s decision. First, the Third Circuit held that the plaintiff could not show that the investigator knew about the plaintiff’s reported fraud and thus could not have fired him in retaliation.  Second, the Third Circuit held that the plaintiff’s cat’s paw argument required him to show both that the manager wanted him fired for reporting fraud and that the manager was able to influence the investigation. The plaintiff could do neither.

The Third Circuit’s rejection of the plaintiff’s retaliation claims shows that courts may defer to the findings of an independent and legitimate internal investigation into a potential whistleblower’s misconduct. As the Third Circuit succinctly put it: “Whistleblowing does not insulate an employee from being fired for misconduct.” Going forward, the Third Circuit’s reasoning may serve as a blueprint for how to conduct investigations into complaints about workplace conduct.

If you have any questions about the False Claims Act, including its anti-retaliation provision, please contact a member of Bass, Berry & Sims’ Healthcare Fraud & Abuse team. Please also check out other posts on this blog where we dive deeper into other specific aspects of the False Claims Act.