» Read the court’s opinion here

A U.S. appeals court ruled on Monday that a Las Vegas-based children’s therapy service could not force a former employee to arbitrate a whistleblower lawsuit alleging that it defrauded federal healthcare programs.

The 9th U.S. Circuit Court of Appeals in San Francisco ruled that the plain text of Mary Kaye Welch’s arbitration agreement with My Left Foot Children’s Therapy LLC did not encompass her lawsuit.

U.S. District Judge Miranda Du in Reno, Nevada had in June 2016 denied the motion on the grounds that because her lawsuit was brought on behalf of the United States and Nevada, which had not agreed to arbitrate the claims.

The three-judge 9th Circuit panel affirmed the decision but on different grounds, citing the language in Welch’s arbitration agreement itself, which said it did not cover a False Claims Act lawsuit.

“Though the question of the enforceability of a relator’s agreement to arbitrate FCA claims is interesting, our holding rests on a rather unremarkable textual analysis,” U.S. Circuit Judge Raymond Fisher wrote.

R. Scott Oswald, a lawyer for Welch at Employment Law Group, in a statement said although the ruling was based on her specific contract, Fisher also made clear the court would have nullified an agreement that covered False Claims Act claims.

“With this ruling, the Ninth Circuit puts a stop to employers’ inappropriate efforts to push False Claims Act cases into arbitration,” he said.

Rex Heinke, a lawyer for My Left Foot at Akin Gump Strauss Hauer & Feld, did not respond to a request for comment.

Welch, who is a speech therapist, filed the lawsuit in 2014 under the False Claims Act, which allows whistleblowers to sue companies on the government’s behalf to recover taxpayer money paid out based on fraudulent claims.

The government may intervene in the cases. If successful, whistleblowers receive a percentage of the recovery.

In her case, the Justice Department did not, leaving Welch to litigate on her own claims that My Left Foot and its co-owners violate the False Claims Act and a similar Nevada law by presenting fraudulent claims to Medicaid and Tricare, which provides benefits to military service members.

She claims that My Left Foot treated patients who could not benefit from therapy and billed for those unnecessary services, leading to false claims for reimbursement to be submitted to government healthcare programs.

In October 2015, My Left Foot and its co-owners, Ann Marie and Jonathan Gottlieb, moved to compel Welch to arbitrate her claims pursuant to an agreement she signed during the course of applying for a job with the company in 2013.

On appeal, My Left Foot had cited a clause broadly covering “all disputes, whether they be based on the state employment statutes, Title VII of the Civil Rights Act of 1964, as amended, or any other state or federal law or regulation.”

But Fisher wrote that section was “irrelevant” and said only a separate section of the contract that the court held limited the disputes to being related to her employment or association with My Left Foot.

» Read the court’s opinion here

(Introduction posted by 1A)

A Google engineer was fired this week over a memo he wrote about what he saw as the company’s “politically correct monoculture” and questioning policies aimed at hiring more women.

He argued that women were biologically less suited for certain jobs in tech, drawing outrage over both his opinions and over his firing.

Healthy organizations thrive on different opinions and perspectives — but what is out of bounds? Who gets to decide what words cross the line and when they should cost you your job?

—–

(Excerpt of show transcribed by The Employment Law Group)

John Donvan (host): Let me go first to David Scher. As we’ve mentioned, this gentleman, James Damore, has decided now to try to sue Google for — I’m assuming the broad category would be some kind of unfair dismissal. Does he have legal protection in this situation?

David Scher: You know, it’s interesting: I’m a civil rights lawyer and I represent whistleblowers, but I find myself on the side of Google in this case. And I also find it interesting because I’ve heard many conservative media, you hear on the conservative side, support for this whistleblower — which I would have thought would be the opposite, that conservatives would be in support of the employer. So — and I think the reason, and I know you didn’t want to talk about the content [of Damore’s memo], but I think we have to —

Donvan: We can allude to it. We just didn’t want to spend a lot time debating whether women are as capable as men in the workplace, because that is a separate conversation.

Scher: Whether that statement is true or not really isn’t the point. It’s the point that he made that statement, and I think that’s where he crosses the line. I think employees are protected, from all kinds of protected conduct, making all kinds of statements in the workplace. The First Amendment is limited in the workplace, and there are a number of laws to protect an employee, but you can’t violate a company’s policy against discrimination. Even though Google has its own problems in this area, here [Damore] specifically comes out and says the problem is with — that gender disparity in the workplace is biology, not sexism. And not only is that statement false — and we don’t have to go there — but that statement is inherently discriminatory because it buckets a whole group of people.

Donvan: Under the law, you’re saying, that’s the case then?

Scher: Yes, under the law.

Donvan: So it’s not simply about how Google’s management might feel about him, or about that issue, but you’re saying under the law [Damore] crossed a line legally.

Scher: Yes, exactly. And Google didn’t have to fire him, but my view is that it was entitled to do so. Now we don’t have all the facts. There may be other factors playing into this, other complaints he made. He may have engaged in other protected conduct where he might have a claim. But based on the information that I have, and the facts that are before me, he’s not going to win.

Scott Oswald, managing principal of The Employment Law Group P.C. in Washington, D.C., will visit Buffalo next month to moderate a CLE titled “The False Claims Act Today” at the U.S. Courthouse in Niagara Square.

The Sept. 19 event will run 11:30 a.m.-2 p.m. and will feature a panel of local judges, attorneys and government officials.

Oswald said the CLE is designed to be an overview on the ins and outs of the False Claims Act, based on how the various U.S. Attorney offices are set up.

“What we’re trying to do is shed a light on how this is being investigated and how the U.S. Attorney’s Office in Buffalo is structured,” he said.

The False Claims Act stems from the Civil War and was enacted in 1863. According to Oswald, President Abraham Lincoln would visit the battlefields and wonder why the troops were given substandard rations and uniforms. The generals would explain to Lincoln that they were goods provided for the war effort and there wasn’t a tool to stop it and ensure there were consequences for those profiting from the war. He said Lincoln decided that the government didn’t have an adequate auditing agency and wanted to create an incentive for people who knew about fraudulent activity to come forward.

“It’s a statute that allows a private citizen, through the proper procedure, to notify the government that there has been fraud on the government,” he said. “To the extent that the government agrees and then collects monies from the fraudsters, the individual who comes forward can be rewarded. It incentivizes integrity. The reward can be as much as 30 percent of what the government receives.”