In U.S. ex rel. Wildhirt v. AARS Forever, respiratory therapists brought a qui tam lawsuit against their employer under the False Claims Act and alleged their employer was breaching contracts with the Veteran’s Administration. The whistle-blowers had little first hand knowledge about the practices at issue, and instead of alerting their employer of the issues, the employees took documents containing protected health information home without authorization, in violation of HIPAA, to pursue their case.
The employer brought counterclaims against the employees, as both of the therapists who brought the qui tam suit had signed HIPAA confidentiality agreements, which included language that said the employees would report any suspect practices to their employer before pursuing a qui tam suit. The agreement also said the employees would indemnify their employer for any attorneys’ fees the employer was forced to incur as the result of a qui tam suit where confidential employer information was improperly disclosed, according to the report.
The court ruled employer counterclaims that do not solely seek to indemnify the employer for losses as a result of the lawsuit are permissible in qui tam cases and denied the plaintiffs’ request to dismiss the employers’ counterclaims.
There have been other recent decisions allowing employers to bring counterclaims based on an employee whistle-blower improperly disclosing confidential information, according to the report.
Although the cases provide employers in the healthcare industry with a new way to help defend against qui tam cases, employers must have signed employee agreements in place with language that requires employees to first notify the employer of suspect activity and also allows the employer to recover attorneys’ fees when confidential information is improperly disclosed or taken without authorization.
More Articles on the False Claims Act:
Government Intervenes in False Claims Act Lawsuit Against IPC The Hospitalist
50 Healthcare Industry Lawsuits, Settlements
Shands HealthCare to Pay Additional $3.25M in Whistle-Blower Case Settlement
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