December 22, 2017 - Posts

Can Your Employer Force You to Arbitrate False Claims Act Whistleblower Cases?

Probably not — at least not for now.


Over the past few years, employers have had greater and greater success forcing their workers to accept mandatory, individual arbitration agreements that waive the rights of those workers to pursue their claims in court.


Worker advocates, including our law firm, have fought hard against this trend and have tried to ensure that employees who have been underpaid or discriminated against have their day in court.  But it has been an uphill battle.


It is therefore encouraging to see that in at least one area of the law, courts are drawing a line and saying no to employer efforts to compel arbitration in lieu of court proceedings.


In a recent opinion out of the Ninth Circuit Court of Appeals, U.S. ex rel. Welch v. My Left Foot Children’s Therapy, 871 F.3d 791 (9th Cir. 2017), the defendant attempted to force a whistleblower into arbitration, after the United States and the State of Nevada declined to intervene in the case.  There was no dispute that the whistleblower was covered by an arbitration agreement, but there was a dispute about whether (1) that agreement actually applied to whistleblower claims, and (2) if it did, whether such an agreement was even enforceable.


The trial court initially held that the agreement did apply to the plaintiff’s whistleblower claim, but that such a requirement was legally unenforceable.  On appeal, the Ninth Circuit affirmed, but for a different reason.  It held that the arbitration agreement as written did not actually cover whistleblower actions, as such claims were not sufficiently related to the whistleblower’s employment.


The law in this area is still very much in flux, and the decision in My Left Foot will likely inspire at least some companies to get more creative with the language in their mandatory arbitration agreements.  Moreover, courts have generally held that whistleblower retaliation claims, as compared to the actual fraud claims, can be compelled to arbitration, which leads to potentially tricky questions in a lawsuit that contains both types of claims.


Given these tricky and evolving issues, which touch upon both whistleblower law and more traditional employment law, it is all the more important to find a law firm with experience in both areas.


To learn more about our Whistleblower & Qui Tam practice click here.  Our firm is located in Nashville, Tennessee but we represent whistleblowers all around the country.

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