Why Become a Whistleblower?
When confronted with qui tam whistleblowers who are corporate employees, corporations can all too easily demonize them. Disgruntled. Vengeful. Greedy. Opportunistic. Many misguided whistleblower "containment" strategies have been based on such mischaracterizations. The most common of these strategies is a routine waiver of the right to bring a lawsuit against the company in a separation agreement. (In fact, in many cases such pre-existing agreement does not preclude a subsequent qui tam case.) Other, more exotic strategies that have been floated or applied include requiring employees to sign agreements that they will donate the proceeds of any qui tam suit to charity, "psychological screening" of potential job applicants to identify those with "whistleblowing tendencies," and exit interviews that routinely question departing employees about whether they are aware of any wrongdoing. One objective apparently is to provide some basis upon which to later undermine the employee's credibility in the event of a qui tam suit.
A constructive analysis of the qui tam phenomenon starts with understanding whistleblowers and what motivates them. The following analysis does not attempt to be scientific, but rather to share the benefit of our experience as lawyers representing whistleblowers for more than a decade.
First, qui tam whistleblowers are not primarily driven by greed. This is not to say that money is not an important factor in the decision to file a qui tam lawsuit. The qui tam law was designed to provide people with an incentive to take the risks to career and personal stability that becoming a whistleblower can entail. To many, the potential recovery provides a comfort factor that renders the possibility of damage to or loss of a career a risk worth taking -- a way to explain to a spouse, for example, why filing a qui tam lawsuit is the best course of action.
The potential for a financial recovery is a lure. It is intended to be. However, it is rarely, if ever, the primary motivation upon which a successful qui tam suit is ultimately built.
Likewise, revenge is a factor but rarely the driving force. Most people certainly seek vindication, and some are tenacious to the point of obsession. This is usually understandable. Many have fought long and hard to bring their concerns to the attention of corporate management through internal means, only to be ignored, spurned, marginalized, harassed, and/or terminated.
Similarly, others have tried, and failed, to have law enforcement authorities address their concerns by calling government fraud reporting hotlines. Most of these hotlines field a high volume of calls. It is hardly surprising, therefore, that whistleblowers often have been met with answer machines and/or the appearance of indifference. And hotline reports, of course, carry no guarantee that there will be follow-up or that the whistleblower will ever be informed if any such follow-up occurs.
In our experience, the single factor that is almost always present is this: moral outrage. Most people who are committed enough and strong enough to blow the whistle simply believe that what they observed is wrong. They believe that reporting it is the right thing to do. For many, a qui tam case is the last resort after efforts to get the company to address the problem have failed. As Dr. Harris Berman, chairman and CEO of the health maintenance organization Tufts, reported about his employee whistleblower Dr. Joseph Gerstein, "[t]his is vintage Joe Gerstein. He saw a wrong and kept going until he righted it. He's a very principled guy who feels passionately about his principles." Much the same can be said about Douglas Durand, a former Vice President of Sales for the pharmaceutical company TAP. Discussing his upbringing, Durand stated, "I was raised to do the right thing. You don't lie. You don't cheat. You don't steal. And you tell the truth."
In cross-examination during his deposition in 2002, George Couto, a former Bayer marketing executive represented by Getnick & Getnick LLP explained what led him to file his qui tam suit:
"I continuously got more uneasy as the private labeling program expanded, as more people learned about it, as Bayer began to use it almost as a routine marketing practice. It was one drug and then it was two drugs and now it's three drugs . . . I attended a compliance training program in February of , I'm told by Joe D'Arco, our lead counsel, and I'm told by [CEO] Helge Wehmeier on video to not only follow the letter of the law but the spirit of the law as well. So here I am, a market manager with full knowledge and awareness of a program that clearly is not within the spirit of the law at a minimum . . . It's the only ethical thing to do."
In most cases, of course, qui tam whistleblowers are motivated by a combination of factors. More recently, corporate executives, management level employees and others in positions of responsibility have become a distinct category of qui tam whistleblowers. This has led to the filing of qui tam suits as a means of self-protection.
As the experience of decades has shown, the highly competitive nature of industry and commerce renders it susceptible to borderline practices. In order to defend their market share, many companies are driven to adopt what they might term "gray area" practices -- conduct that isn't strictly legal but that people live with because it isn't flagrantly illegal. Often, this is conduct that other companies have initiated to gain a competitive advantage. Ultimately, all companies in the industry have to do it in order to stay in the game, and the conduct acquires a veneer of acceptability because "everyone does it." One example is the conduct in the clinical laboratory industry during the 1990s that led to the federal government's Operation Labscam, which led to criminal charges of executives and civil recoveries of more than $1 billion. The Department of Justice, however, has no tolerance for the "everyone does it" defense.
In this climate, employees with managerial roles are especially vulnerable. A corporate decision-maker who is aware of conduct that he or she thinks may be viewed by prosecutors as fraudulent, and who may be perceived as having been involved in such conduct, or who may have adopted an "ostrich" approach to it, has a limited range of options, all of which are far from enviable. Such a person could, and in an ideal world should, report the conduct internally and urge that it be corrected. This assumes, however, that the company has a truly effective compliance program and procedures to protect whistleblowers from retaliation. In the absence of such a program, fear of being punished, shunned, or even fired is likely to be all too real -- particularly if senior management is part of the problem. Nor could such a person count on the corporation to come to his or her aid if and when the conduct is exposed - potentially by another whistleblower. When corporate scandals erupt, corporations look for scapegoats.
Faced with such a situation, a qui tam action can be the only reasonable option. For example, Douglas Durand, who brought a qui tam case against TAP that netted him around $90 million, joined TAP as the Vice President of Sales. He was immediately troubled by what he saw as TAP's "cowboy" culture. He told People magazine that after he heard about an alleged kickback plan involving sales of the drug Lupron, he realized the extent of his personal exposure. "The sales force was my responsibility," he told the magazine. "I could have been the one to get hung out to dry."
Corporate higher-ups like Douglas Durand bring immense value to the government's anti-fraud effort. Their sophistication, knowledge and access to information are such that they have often been able to provide prosecutors with a virtual road map to the alleged wrongdoing. In the past decade,
executives, managers and professionals in corporate positions have brought billions of dollars back to the taxpayersthrough their whistleblowing efforts.
In our experience real whistleblowers are rarely motivated purely or even primarily by money or revenge. Most simply want to do the right thing. Others also act from a desire to protect themselves, lest the finger of blame be pointed at them some day. If there is a whistleblower archetype, it may well be this: the corporate insider who is unable to have his or her concerns addressed via internal means and who, in fear and/or frustration, turns to the qui tam law as a last resort.
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