George B. Breen, Chair of the firm's National Health Care and Life Sciences Practice Steering Committee, in the Washington, DC, office, and Stuart Gerson, a Member of the Firm in the Litigation and Health Care & Life Sciences practices in the Washington and New York offices, were quoted in an article titled "3 Tips for Workable FCA Release Programs." (Read the full version – subscription required.)
Following is an excerpt:
As qui tam False Claims Act lawsuits continue to rise, health care companies and their attorneys are working to bolster internal compliance programs and eyeing employee litigation releases as a way to limit exposure. But those agreements require some careful handling.
In 2013, qui tam relators filed a record-breaking 752 complaints — 100 more than in the previous year. But in the steady 25 percent of FCA cases the U.S. Department of Justice does intervene in, it secures settlements or trial victories 90 percent of the time.
But companies need to be careful that their qui tam protections don't deter employees from bringing alleged wrongdoing to the government's attention. They should focus on buoying their internal compliance programs rather than hiding FCA violations with their litigation releases, and they should conduct extensive training on how to properly report suspected wrongdoing, attorneys say. Many companies are already doing this, according to Epstein Becker & Green PC's George B. Breen: "These are folks trying to create a culture of compliance from the top down."
Although relators can't break FCA seals, Epstein Becker & Green PC's Stuart Gerson noted that companies can still ask outgoing employees if they know about any potential FCA violations and receive honest, binding answers that could add to an FCA defense.
"The question you're asking is not whether the individual has brought a qui tam suit but whether the individual knows about any misconduct," Gerson told Law360. "It makes you look good because you can argue legitimately that you were looking to find out if there was anything you needed to be worried about."
If the outgoing employee denies knowledge of any wrongdoing despite having filed a qui tam case in the past, Gerson says, that representation violates the separation agreement and could prevent the case from moving forward.
