September 12, 2018

FCA Does Not Prohibit Compelled Arbitration of Retaliation Claims

By: Joel Androphy, Rachel Grier, and Stephanie Gutheinz

A district court in the Southern District of Texas recently held that nothing in the text of the FCA or its legislative history prevents employment-related retaliation claims from being arbitrated under a valid and enforceable arbitration agreement.

Under the Federal Arbitration Act, a valid agreement to arbitrate certain disputes is valid and enforceable unless Congress has precluded arbitration of the statutory right at issue.

The relator argued that the FCA precludes arbitration of retaliation claims because arbitration of such claims would allow defendants to immunize themselves against relator-initiated claims of FCA violations, undermining the purpose of the FCA to protect whistleblowers.

The relator further argued that such arbitration proceedings could constitute public disclosures, thereby unfairly triggering the public disclosure bar.

The court reasoned, however, that relators can avoid this issue by filing their retaliation claims with or after the qui tam claims. The case is United States ex rel. Cassaday v. KBR, Inc.

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