Laws Employers Fear Most
Two Federal statutes strike fear in the hearts of employers. Fortunately, both laws protect employees from retaliation.
The Fair Labor Standards Act (FLSA)
Most employers are subject to the FLSA and larger employers can be in danger of a class action for overtime by dozens or even hundreds of employees. Under the FLSA, double the wages due is routinely awarded to employees in addition to their attorney’s fees and court costs. For willful violations, an employee can get double back pay (at the rate of time and one-half) for up to three years. The employer must pay their own attorney, of course, plus the employee’s attorney if the employee wins.
Overtime rules can be complicated and it’s up to the employer to get it right. Not only do employers need to worry about the FLSA, but they also need to be aware of state overtime rules. Nowadays, an employee can combine both a Federal overtime complaint and a state overtime complaint. In Illinois, employers are liable for overtime violations for up to ten years. Class actions, called “collective” actions under the FLSA, can be devastating to an employer because they often drag on for years and interfere with the day to day operations of their business.
Sometimes employers try to say that their employees are “independent contractors” rather than employees but that argument is not usually successful. Likewise, employers who maintain that their employees are “exempt” from overtime rules under the so-called “white-collar exemptions” must be able to prove it in court. Unlike most employment laws, the employer’s intent is usually not an issue so overtime cases are fairly easy for the employee to prove just by their own sworn testimony that they worked overtime without being paid according to the law.
Normally, at least for class or collective actions, your attorney will advance the costs for wage and hour litigation and accept a contingency fee, or percentage of your recovery.
The False Claims Act (FCA)
Do you have knowledge that your employer committed fraud against the government?
The FCA, like the FLSA, is a Federal statute with a state law counterpart that can be combined into one lawsuit, if appropriate to the facts. The FCA is even more complicated than the FLSA but it only involves certain employers who do business with Federal or State government. Like overtime cases, FCA lawsuits can drag on for years. Unfortunately for the employer, FCA complaints are filed under seal and kept secret from them for months, and maybe even years, while law enforcement authorities investigate the employee’s allegations of false claims against the government.
FCA lawsuits (sometimes called “Qui Tam”-pronounced either “kwee” or “kee”) can mean a very big recovery for an employee, called a “relator.” If the FCA lawsuit is successful, the government may recover three times its damages plus civil penalties of up to $11,000 for each false claim against the government. You, as the relator, may recover as much as 30 percent of the total amount.
Healthcare fraud against Medicare and Medicaid accounts for more settlements and more dollars than any other types of fraud. So those who work in the healthcare industry ought to become familiar with the FCA. It’s not easy to prove a case under the FCA, in part, because many healthcare organizations build firewalls around their billings to Medicare and Medicaid so those on the operational side can’t identify specific false billings even if they are convinced that the false billings exist. Because a relator sues on behalf of the United States of America, the Attorney General has an opportunity to intervene in the case or to decline the case. Although your share of the recovery will be somewhat less if the Attorney General intervenes, their assistance is extremely important to the success of a FCA lawsuit.
Some potential whistleblowers are concerned that they themselves can be prosecuted for participating in the false claims. This concern can be addressed by the government granting the whistleblower immunity, sometimes called a “proffer” letter.
Again, the FCA is quite complicated but you should feel free to discuss your potential allegations with a knowledgeable attorney who will keep strictly confidential whatever information you might reveal during your consultation. Normally, the relator’s attorney will advance the costs of FCA litigation and accept a contingency fee, or a percentage of your recovery.
The most important thing to keep in mind about FCA cases is the “first to file” rule—so don’t talk about your case or potential case to anybody because they might file their FCA lawsuit before yours.