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The Employment Law Group® Establishes Favorable Precedent in a False Claims Act Retaliation Case

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Today The Employment Law Group® law firm prevailed on a motion to dismiss a claim of retaliation under the False Claims Act (“FCA”) and a defamation action.  Jason Mann alleged that his former employer Heckler & Koch Defense, Inc. (“HKD”) retaliated against him because he investigated and raised concerns about HKD’s submission of a potentially fraudulent bid for the sale of rifles to the U.S. Secret Service.  HKD moved to dismiss, asserting that Mann failed to state a claim under the retaliation provision of the FCA because he did not allege that HKD submitted a false claim to the government.  Relying in part on the Supreme Court’s holding in Graham County Soil & Water Conservation Dist. v. U.S. ex rel. Wilson, 545 U.S. 409 (2005), Judge Cacheris rejected HKD’s narrow construction of the FCA, concluding instead that an FCA retaliation plaintiff need not allege an actual violation of the FCA.  Judge Cacheris also noted that protected activity under the FCA should be interpreted broadly and that FCA retaliation claims are subject to Rule 8(a)’s notice pleading standard, not to the heightened requirements of Rule 9.  The full text of the opinion is available here.

Judge Cacheris also denied HKD’s motion to dismiss Mann’s defamation claims.  HKD asserted that Mann’s defamation claims were deficient because he did not allege the exact defamatory words spoken or written and because one of the alleged defamatory statements was literally true.  Consistent with well-established precedent, Judge Cacheris rejected both assertions, holding that a heightened pleading standard does not apply to defamation claims, and that the meaning of a defamatory statement may come not only from the actual words used, but also from any “inferences fairly attributed to them.”  Judge Cacheris also rejected HKD’s contention that a defamation plaintiff must specifically allege facts demonstrating that a company is vicariously liable for defamatory statements made by an agent of the company.  To the contrary, once an employment relationship is established, the burden is on the employer to prove that the employee was not acting within the scope of his employment when he committed the act.

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