The False Claims Act is an important federal law that creates consequences for businesses that improperly bill the federal government for services rendered. Most people will think of health care providers who accept Medicare or Medicaid when they think about illegal or fraudulent billing activity. However, the companies that work on and operate railroads in the United States also bill the federal government for their services.
It would be impossible for the government to manage enough agencies to oversee all of the billing activity involving federal funds for the railroads. As such, there are also certain times when those who work for railroads will need to bring a claim against their employer under the False Claims Act.
How does the False Claims Act work?
Under the False Claims Act, an employee who has knowledge of company misconduct can file a civil suit against their employer. In doing so, they take some degree of career risk. Although retaliation for being a whistleblower is illegal, that doesn’t stop companies from lashing out at those who report misconduct.
The threat of retaliation has a chilling effect on reporting, which the False Claims Act counters with financial compensation. Someone who files suit against a company may receive a portion of the money recovered after a successful claim. How much do railroad workers stand to earn from bringing a lawsuit on behalf of the government?
The False Claims Act empowers individual employees
The False Claims Act creates consequences for those who engage in fraudulent billing activity involving the federal government and also creates an incentive for individual workers to report employer misconduct.
By gathering evidence and initiating legal proceedings, the person filing becomes entitled to a certain percentage of any recovered money. Depending on the circumstances, a worker may receive between 15% and 30% of the bill amounts recovered as a result of their qui tam lawsuit.
How much money do qui tam lawsuits recover for the government?
Although 2020 did see a downturn in qui tam actions compared with 2019, there were still more than $2.2 billion recovered by such lawsuits. That figure was over $3 billion in 2019, but overall economic slowdown combined with many court closures likely reduced the 2020 figure.
There were 672 qui tam lawsuits filed in 2020, and the employees who filed suit on behalf of the federal government received between 15% and 30% of the amount recovered through their actions. If you are aware of improper billing activity at the railroad where you work, you may need to consider taking legal action.