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Liability Under FCA Depends On Whether Defendants Believe They Lied

If you have information about violations of The False Claims Act contact an attorney for information about Whistleblower protection and rewards.

Liability Under FCA Depends On Whether Defendants Believe They Lied

United States et al. ex rel. Schutte et al. v. Supervalu Inc. et al., 2023 WL 3742577 (2023)

The False Claims Act imposes liability on anyone who “knowingly” submits a “false” claim to the Government. 31 U. S. C. §3729(a). In some cases, that rule is straightforward: If a law authorized payment of $100 for “each” medical test, and a doctor knows that he did five tests but submits a claim for ten, then he has knowingly submitted a false claim. But sometimes, the rule is less clear. If a law authorized payment for only “customary” medical tests, some doctors might be confused when it came time for billing. And, while some doctors might honestly mistake what that term means, others might correctly understand whatever “customary” meant in this context—and submit claims that were inaccurate anyway. The cases before the Supreme Court involved a legal standard similar to that latter example: In certain circumstances, pharmacies are required to bill Medicare and Medicaid for their “usual and customary” drug prices. And, critically, these cases involved defendants who may have correctly understood the relevant standard and submitted inaccurate claims anyway. The question presented is thus whether the defendants could have the scienter required by the FCA if they correctly understood that standard and thought that their claims were inaccurate.

In a unanimous decision authored by Justice Thomas, the Supreme Court held that the answer is yes: What matters for an FCA case is whether the defendant knew the claim was false. Thus, if defendants correctly interpreted the relevant phrase and believed their claims were false, then they could have known their claims were false.

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Whistleblowers Protected from Retaliation Covered by Labor Code 1102.5(b).

Whistleblower protection lawyers in Beverly Hills - Helmer Friedman LLP.

Labor Code Section 1102.5(b) Encompasses A Report Of Unlawful Activities Made To An Employer Or Agency That Already Knew About The Violation

People ex rel. Garcia-Brower v. Kolla’s, Inc., 2023 WL 3575254 (2023)

In Mize-Kurzman v. Marin Community College Dist., 202 Cal.App.4th 832, 858 (2012), the Court of Appeal oddly held that whistleblower protections are not available for employees who disclose illegal conduct to the employer or to a government or law enforcement agency if the employer or government or law enforcement agency was already aware of the illegal conduct. In Kolla’s, the California Supreme Court rejected the reasoning in Mize-Kurzman and held that the Labor Code whistleblower retaliation statute does not require that a reported violation be unknown to the recipient.

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$20,000 Sexual Harassment / Retaliation Case Settlement with Bojangles Restaurants, Inc

Sexual harassment causes long term damage to the victims psyche.

U.S. Equal Employment Opportunity Commission Settles Federal Charges Female Employee Was Sexually Harassed, Then Transferred and Denied Promotional Opportunity Because She Complained

Bojangles’ Restaurants, Inc., a Delaware corporation operating in Greensboro, North Carolina, has been ordered to pay $20,000.00 and provide other relief as part of a settlement agreement with the U.S. Equal Employment Opportunity Commission (EEOC) to resolve a sexual harassment and retaliation lawsuit.

The EEOC’s lawsuit alleges that a female team member at a Bojangles fast food restaurant in Greensboro was subjected to severe sexual harassment from March 2020 to June 2020 by the restaurant’s general manager, who made numerous sexual remarks and inappropriately touched and grabbed her. The employee was then denied the opportunity to participate in a management training program and was transferred to a different location as retaliation after complaining about the general manager’s conduct.

This type of alleged behavior is in violation of Title VII of the Civil Rights Act of 1964, which prohibits sexual harassment in the workplace and prohibits retaliation against employees who oppose sexual harassment.


Employees have a right to be free from sexual harassment in the workplace. Employers cannot tolerate such conduct or allow managers to retaliate against employees for reporting the harassment.

The EEOC filed suit in U.S. District Court for the Middle District of North Carolina (Equal Employment Opportunity Commission v. Bojangles’ Restaurants, Inc., Civil Action No.: 1:22-cv-00739) after first attempting to reach a pre-litigation settlement through its voluntary conciliation process.

As part of the two-year consent decree, which applies to specific restaurants, Bojangles is required to pay $20,000.00 in damages to the affected employee, train managers and employees on sexual harassment, refrain from discriminating against employees on the basis of sex, including in the administration of management training programs, and refrain from retaliating against employees who complain of sexual harassment.

Bojangles has also agreed not to rehire the offending manager. “Employees have a right to be free from sexual harassment in the workplace,” said Melinda C. Dugas, regional attorney for the Charlotte District. “Employers cannot tolerate such conduct or allow managers to retaliate against employees for reporting the harassment.”

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Race, National Origin, Age Discrimination and Retaliation lawsuit filed against HCA Healthcare

Age discrimination is illegal, intentionally inflicts emotional distress. Contact the Age Discrimination Lawyers Helmer Friedman LLP for help.

A federal agency has charged that a for-profit graduate medical education provider in Nashville terminated an employee for filing a discrimination complaint.

HCA Healthcare, Inc. (along with its divisions Tennessee Healthcare Management, Inc. and GME Overhead), a for-profit healthcare corporation based in Nashville that provides graduate medical education in over 2,300 facilities, is facing a lawsuit. The U.S. Equal Employment Opportunity Commission (EEOC) has accused HCA Healthcare of violating federal law by denying a promotion to an employee based on his age, race, and national origin and subsequently firing him in retaliation for complaining about the discrimination.

The employee, who is Asian American, has claimed that despite meeting all necessary qualifications, HCA Healthcare selected an underqualified white candidate for the promotion over him. The Equal Employment Opportunity Commission (EEOC) is seeking injunctive and monetary relief against HCA Healthcare for violating Title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act.

Race and national origin discrimination is illegal and harmful, intentionally inflicting emotional and financial distress. Contact the National Origin Discrimination attorneys Beverly Hills Helmer Friedman LLP for help.

It is imperative to abide by state and federal laws that prohibit any form of discrimination based on race or nationality in the workplace. The Civil Rights Act of 1964, specifically Title VII, is a critical law that unequivocally prohibits racial discrimination in every aspect of employment. Employers are legally bound to ensure they do not engage in discriminatory practices such as refusing to hire or promote someone or treating them unfairly regarding compensation or job benefits due to their race or national origin.

Age discrimination and harassment are strictly prohibited by both California and Federal law. It is important to note that the Age Discrimination in Employment Act of 1967 (“ADEA”) is a federal law that provides extensive protection to individuals aged 40 or above from age-based discrimination in employment. Any form of discrimination against a person due to their age with respect to any employment term, condition, or privilege, including but not limited to hiring, firing, layoff, compensation, promotion, or job assignments, is considered illegal under the Age Discrimination in Employment Act.

It is worth noting that HCA Healthcare owns and operates over 100 hospitals and employs over 275,000 people in multiple states and the United Kingdom.

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Employer’s Retaliation Verdict Reversed – Court Allowed Evidence that Pre-dated Protected Activity

Employment Law Attorneys Helmer Friedman LLP.

Retaliation Verdict In Favor Of Employee Reversed Where Trial Court Allowed Into Evidence Actions That The Employer Took Before The Plaintiff Engaged In The Protected Activity

Kourounian v. California Department of Tax and Fee Administration, 2023 WL 3612540 (2023)

Rafi Kourounian obtained a $425,562 jury verdict in his favor on his claim that the California Department of Tax and Fee Administration retaliated against him for filing an internal complaint with its Equal Opportunity Office (EEO). The Department appealed, contending that the trial court erred in admitting evidence of allegedly retaliatory conduct, which pre-dated the filing of his internal complaint. The Court of Appeal reversed, holding that the trial court erred in admitting evidence about activity that occurred before the filing of his EEO complaints:

As a matter of both logic and law, acts of retaliation must occur after the protected activity. To establish a prima facie case of retaliation, a plaintiff must show that she engaged in protected activity, that she was thereafter subjected to adverse employment action by her employer, and there was a causal link between the two. Because retaliation under FEHA requires the plaintiff to show that the employer was motivated to retaliate by the plaintiff’s protected activity, actions the employer took before the plaintiff engaged in the protected activity necessarily are irrelevant.

Kourounian v. California Department of Tax and Fee Administration, 2023 WL 3612540 * 8 (2023)(cleaned up).

The Court of Appeal also held that the trial court should not have admitted the plaintiff’s EEO complaint because it was hearsay:

Hearsay may be briefly understood as an out-of-court statement offered for the truth of its content. Evidence Code section 1200, subdivision (a) formally defines hearsay as evidence of a statement that was made other than by a witness while testifying at the hearing and that is offered to prove the truth of the matter stated. A ‘statement’ is oral or written verbal expression or the nonverbal conduct of a person intended by him as a substitute for oral or written verbal expression. Documents like letters, reports, and memoranda are often hearsay because they are prepared by a person outside the courtroom and are usually offered to prove the truth of the information they contain. Documents may also contain multiple levels of hearsay. An emergency room report, for example, may record the observations made by the writer, along with statements made by the patient. If offered for its truth, the report itself is a hearsay statement made by the person who wrote it. Statements of others, related by the report writer, are a second level of hearsay. Multiple hearsay may not be admitted unless there is an exception for each level.

There is no doubt that the EEO complaints were prepared outside the courtroom. Thus, like an emergency room report, Kourounian’s written complaints, if offered for its truth, is a hearsay statement made by Kourounian, the person who wrote it.

The fact that Kourounian was available for cross-examination does not transform his statements in the complaints into non-hearsay or provide an exception to the hearsay rule. Hearsay is generally excluded because the out-of-court declarant is not under oath and cannot be cross-examined to test perception, memory, clarity of expression, and veracity and because the jury (or other trier of fact) is unable to observe the declarant’s demeanor. To challenge a testifying witness’s own prior, out-of-court statement as inadmissible hearsay is unusual, but we agree with the defendant that the testifying witness’s own statement to his wife constituted hearsay evidence, for it was an out-of-court statement that was offered for its truth. We are not free to disregard this holding by the Supreme Court and contrary to Kourounian’s claim, neither was the trial court.

The fact that Kourounian is a party, not merely a witness, does not make his out-of-court statements admissible. The Evidence Code provides only limited exceptions to the hearsay rule for the out-of-court statements of a party, and Kourounian has not identified any of them as applicable.

Finally, by way of analogy, federal caselaw is abundant that EEOC charges are inadmissible hearsay, as is the narrative attached to the charge.

Kourounian v. California Department of Tax and Fee Administration, 2023 WL 3612540 * 9 (2023)(cleaned up).

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Good Faith Is A Defense To Labor Code’s “Knowing And Intentional” Standard

Wage and hour violations employment law attorneys Los Angeles Helmer Friedman LLP.

On Remand From California Supreme Court, Court Of Appeal Holds That Good Faith Is A Defense To Labor Code’s “Knowing And Intentional” Standard

Naranjo v. Spectrum Sec. Servs., Inc., 88 Cal.App.5th 937 (2023), review granted Naranjo v. Spectrum Security Services, 2023 WL 3745105, at *1 (Cal., 2023)

In California, if an employer unlawfully makes an employee work during all or part of a meal or rest period, the employer must pay the employee an additional hour of pay. Labor Code § 226.7(c). In Naranjo v. Spectrum Security Services, Inc., 40 Cal.App.5th 444 (2019), the Court of Appeal held that this extra pay for missed breaks (commonly referred to as “premium pay”) does not constitute “wages” that must be reported on statutorily required wage statements during employment (§ 226) and paid within statutory deadlines when an employee leaves the job (§ 203).

The Supreme Court reversed that portion of the Court of Appeal’s holding, concluding: “Although the extra pay is designed to compensate for the unlawful deprivation of a guaranteed break, it also compensates for the work the employee performed during the break period. The extra pay thus constitutes wages subject to the same timing and reporting rules as other forms of compensation for work.” Naranjo v. Spectrum Security Services, Inc., 13 Cal.5th 93, 102(2022).

The Supreme Court then remanded the matter to the Court of Appeal to resolve two issues that the parties addressed in their respective appeals but that the Court of Appeal did not reach based on its conclusion about the nature of missed-break premium pay: (1) whether the trial court erred in finding that Spectrum Security Services, Inc. had not acted “willfully” in failing to timely pay employees premium pay (which barred recovery under § 203); and (2) whether Spectrum’s failure to report missed-break premium pay on wage statements was “knowing and intentional,” as is necessary for recovery under section 226.

After receiving supplemental briefing following remand, the Court of Appeal concluded as follows: (1) substantial evidence supports the trial court’s finding that Spectrum presented defenses at trial—in good faith—for its failure to pay meal premiums to departing employees and, therefore, Spectrum’s failure to pay meal premiums was not “willful” under section 203; and (2) because an employer’s good faith belief that it is in compliance with section 226 precludes a finding of a knowing and intentional violation of that statute, the trial court erred by awarding penalties, and the associated attorneys’ fees, under section 226.

The California Supreme Court has granted review.

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Employees Lose Labor Claim for Not Performing Labor Within Usual Course of Business

Your workplace should be free of discrimination and harassment. Contact the attorneys of Helmer Friedman LLP for information.

Employees Lose Labor Code § 2810.3 Claim Where They Were Not Performing Labor Within The “Usual Course Of Business” Of The “Client Employer”

Morales-Garcia v. Better Produce, Inc., 2023 WL 3749314 (9th Cir. 2023)

In 2014, California enacted Labor Code § 2810.3 to protect workers whose labor has been outsourced to a labor provider. Under the statute, the outsourcing entity, known as a “client employer,” is liable for the laborers’ wages if the laborers’ work is within the outsourcers’ “usual course of business.”

In the present case, the plaintiffs are agricultural workers hired by strawberry growers (“the Growers”) to pick the fruit that was then turned over to the defendants – Red Blossom Sales, Inc. and Better Produce, Inc. (“the Marketers”) for distribution. The Marketers cooled and sold the berries principally to large retail grocery chains. The Marketers conducted their cooling and distribution operations on premises that were close to but separate from the farms.

As happens quite frequently with agricultural workers (and, hence, the need for Labor Code § 2810.3) the Growers stopped paying the plaintiffs and later filed for bankruptcy. The plaintiffs sued the Growers and the Marketers as joint employers under California and federal law. The plaintiffs also sued the Marketers as client employers under California Labor Code § 2810.3. The district court ruled for the Marketers on all theories. The plaintiffs appealed only with respect to the Marketers’ liability under § 2810.3.

On appeal, the Ninth Circuit affirmed, explaining that because the plaintiffs were not performing labor within the Marketers’ “usual course of business” – which is defined as “the regular and customary work of a business, performed within or upon the premises or worksite of the client employer Labor Code § 2810.3(a)(6) – the Marketers were not liable as client employers under California Labor Code § 2810.3.

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Over Lawyering Renders Arbitration Agreement Unenforceable

Forced arbitration, Sexual harassment and discrimination lawyers. Non-compete agreements something akin to indentured servitude.

Arbitration Agreement’s Impermissible Waiver Of Employee’s PAGA Claims Invalidated The Entire Agreement Under Its Unambiguous “Savings Clause And Conformity Clause” – Over Lawyering Renders Arbitration Agreement Unenforceable

Westmoreland v. Kindercare Education LLC, 90 Cal.App.5th 967 (2023)

Rochelle Westmoreland was employed by Kindercare Education LLC. As a condition of employment, when Westmoreland was hired, Westmoreland electronically signed a “Mutual Arbitration Agreement Regarding Wages and Hours.” Although the agreement expressly excludes any claims that cannot be required to be arbitrated as a matter of law, it also contains a provision described as a “Waiver of Class and Collective Claims” providing that covered claims will be arbitrated only on an individual basis and that the arbitrator may not adjudicate form of a class, collective, or representative claims. Complicating matters further, the arbitration agreement also contains a so-called “Savings Clause & Conformity Clause” requiring that if any provision of the agreement is determined to be unenforceable or in conflict with a mandatory provision of applicable law, it shall be construed to incorporate the mandatory provision of law, and/or the unenforceable or conflicting provision shall be automatically severed and the remainder of the agreement shall not be affected unless the Waiver of Class and Collective Claims is found to be unenforceable in which case the entire agreement is rendered invalid and any claim brought on a class, collective, or representative action basis must be filed in court of competent jurisdiction. This “Savings Clause & Conformity Clause” is referred to as the “Poison Pill.”

When Westmoreland was fired, she filed a representation action under PAGA. Kindercare moved to compel arbitration of Westmoreland’s individual non-PAGA claims and to stay her PAGA claim. The trial court granted the motion. Westmoreland sought a writ of mandate. The Court of Appeal held that the unenforceable PAGA waiver was not severable from the rest of the agreement and, therefore, it rendered the entire agreement unenforceable. The California Supreme Court and then the United States Supreme Court rejected Kindercare’s subsequent petitions for review and for certiorari.

Kindercare filed a renewed motion to compel arbitration and then, following Viking River, argued that Viking River compelled a finding that Westmoreland’s PAGA claims must be divided: the “individual” PAGA claim sent to arbitration and the “representative” PAGA claim pursued in court. The Court of Appeal would have agreed but for Kindercare’s Poison Pill:

Had Kindercare simply included a waiver of representative claims in its arbitration agreement and not included the poison pill at the end of the agreement, the result here could have been substantially similar to that in Viking River – the PAGA claims could be divided: the “individual” PAGA claim sent to arbitration and the “representative” PAGA claim pursued in court.
 
Ironically, the language and structure of Kindercare’s arbitration agreement necessitates a result similar to the “claim joinder” rule in PAGA that Viking River deemed problematic when imposed by state law. The poison pill effectively prevents us from sending Westmoreland’s “individual” claims under PAGA (representing the State of California but pursuing “individual” remedies based on the plaintiff’s status as a former employee) to arbitration while allowing litigation in court of her “representative” claims under PAGA, which involve the rights of other “aggrieved employees.”
 
The arbitration agreement, in this case, sought to address the uncertainty in the law in 2016 concerning the waiver of representative claims under PAGA by using the poison pill provision to prevent litigation on parallel tracks if it ever became clear that even one of Westmoreland’s potential class or representative claims could not be waived and would have to be pursued in court. The provision is unambiguous and “presents an all-or-nothing proposition.” The provision leaves no room for Kindercare to choose to bifurcate Westmoreland’s claims between arbitration and court; it instead invalidates the agreement.
 
In sum, having exercised our discretion to hear Kindercare’s appeal as a writ of mandate, we conclude that the arbitration agreement is invalid by operation of the unambiguous “Savings Clause and Conformity Clause.” As a consequence of Kindercare’s drafting decisions, and absent further stipulation between the parties, the arbitration agreement is “invalid” and so Kindercare must litigate all of Westmoreland’s claims in court.

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Individual But Not Representative Claims Compelled To Arbitration

In-N-Out Burgers

Piplack v. In-N-Out Burgers, 88 Cal.App.5th 1281 (2023)

Former employees of In-N-Out Burgers, on their own behalf and on behalf of similarly aggrieved employees, brought an action against In-N-Out Burgers seeking civil penalties under the Labor Code Private Attorneys General Act for In-N-Out Burgers’s alleged practices of requiring employees, without reimbursement, to purchase and wear certain articles of clothing and to purchase and use special cleaning products to maintain the clothes. In reliance on Viking River Cruises, Inc. v. Moriana, ––– U.S. ––––, 142 S.Ct. 1906 (2022), In-N-Out Burgers filed a motion to compel arbitration, arguing that Viking River requires plaintiffs’ individual PAGA claims to be arbitrated and all remaining representative claims dismissed for lack of standing. The trial court summarily denied In-N-Out Burgers’ motion to compel arbitration. In-N-Out Burgers appealed.

The Court of Appeal concluded that the arbitration agreements required individual PAGA claims to be arbitrated and that In-N-Out Burgers did not waive its right to compel arbitration through its litigation conduct. The Court of Appeal also held that Viking River’s requirement that the plaintiff’s individual claims under PAGA be compelled to arbitration did not necessarily deprive the plaintiff of standing to pursue representative claims as an aggrieved employee.

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Jury Could Find Termination Substantially Motivated by Disability

Disability Discrimination Lawyers of Helmer Friedman LLP have extensive knowledge in this area of law.

Although Employer Had Tentatively Placed Employee RIF List Before Becoming Aware of Her Disability, It Did Not Terminate Her Employment Until After It Was Aware Of Her Disability – A Reasonable Jury Could Find That Employee’s Ultimate Termination Was Substantially Motivated By Her Disability

Lin v. Kaiser Found. Hosps., 88 Cal.App.5th 712 (2023)

Suchin I. Lin was employed by Kaiser as an IT Engineer. Lin became disabled as a result of a fall in the workplace which caused her to suffer an injury to her left shoulder. A doctor issued a work status report placing Lin on modified duty with restrictions requiring Lin to use a sling and to limit the use of her left arm. The doctor also indicated that surgery might be necessary. As part of a round of employee layoffs Kaiser planned, at least tentatively, to terminate Lin before Lin became disabled. Following her disability, Kaiser went forward with her layoff. Lin sued for disability discrimination. Kaiser filed a motion for summary judgment, arguing that it was entitled to summary adjudication of Lin’s disability discrimination and retaliation claims because the decision-maker had made the decision to eliminate Lin’s position in a RIF before Lin sustained her disability. Lin opposed the motion arguing that, while her name was selected for the initial RIF list prior to her disability, this “proposed” list was “subject to further review,” as reflected in the list’s gradual reduction from 31 employees to the 17 who were ultimately laid off. She further argued that her ultimate termination was a result of the decision-maker’s reliance on her supervisor’s post-disability assessment of her, particularly a post-disability email to the decision-maker rating her performance much lower than that of her teammates. The trial court granted Kaiser’s motion.

On appeal, the Court of Appeal reversed. The Court of Appeal held that Kaiser’s plan to terminate Lin before she became disabled, by itself, was (of course) not discrimination against Lin because of her disability. But Kaiser did not complete its layoff plans—or, a reasonable jury could find, make its final determination to terminate Lin—until after Lin had become disabled. The Court of Appeal found that there was evidence from which a reasonable jury could conclude that Kaiser’s ultimate decision to terminate Lin was motivated, at least in substantial part, by concerns Kaiser had about Lin’s disability. The Court of Appeal found the following facts important in its decision:

  • Before Lin sustained her disability, neither her then-current supervisor nor any prior supervisor had given her a negative performance evaluation.
  • After Lin sustained her disability, her then-current supervisor began giving her negative feedback and a poor performance evaluation.
  • Lin’s then-current supervisor’s criticisms, in large part, revolved around his concerns about her “slow delivery” and her “pace of execution” – concerns that a jury could find stemmed directly from her disability.

Lin’s then-current supervisor agreed to Lin’s request for light-duty work as a form of accommodation for her disability (but he never actually provided her with light-duty work). His agreement to assign Lin lighter tasks supported a reasonable inference that he believed her disability prevented her from handling her usual workload.