What could be more uncomfortable than discovering your employer is breaking the law or defrauding the government? Knowing that your employer is involved in behavior such as upcoding patients, falsifying earnings records, covering up injuries to residents of a care facility, or turning in false invoices to the government puts an employee in an impossible position.

Do I report it internally and risk being fired?

Do I keep quiet and become complicit in a possible crime?

If I want to do the right thing and report it to the government, who do I contact?

Blowing the whistle on corporate or government malfeasance or fraud is an incredibly difficult thing to do. All of your options may initially seem bad. You know the issue is important and you don't want to be a part of it. But you know that reporting the wrongdoing may put your career at risk. 

Other times employees might not even intend to be a “whistleblower.” They were just reporting a problem they found internally to their boss with every expectation that it would be fixed by the company. And then their attempt to help the company is rewarded with termination.

Now what?

What legal protection does Texas provide employees in regard to whistleblowing and retaliation?

The general rule in Texas is that most employees may be fired at any time for any reason or for no reason at all under what is known as the at-will employment doctrine. However, there are exceptions to this rule where whistleblowers may be protected from wrongful termination. These protections come from two sources: (1) courts, or (2) the legislature.  

Court-Created Protections
Texas recognizes only one public policy exception to the at-will employment doctrine. This exception is a very narrow one. An employee must demonstrate that the sole reason for the employee's discharge was because the employee refused to perform an illegal act that carries criminal penalties. To sue for wrongful discharge, an employee must therefore locate a specific criminal statute that the employer requested the employee to violate.

State Legislative Protections
In addition, the Texas Legislature has adopted narrow statutory protections for certain activities. Employees who engage in protected activities under laws in the following subject areas are protected from retaliation: discrimination, general public evacuation, hazardous substances, health care employees, occupational safety and health, and workers' compensation.

Federal Legislative Protections
In addition to the above state protections, federal law provides workers with additional protections. Furthermore, a private contract or collective bargaining agreement may also protect employees from certain forms of retaliation.

What activities does The law protect?

Court-Created Protections
An employee may not be discharged for a reason that violates public policy. Texas courts have declared that this exception is narrow and only extends to employees who refuse to perform an illegal act. Furthermore, the illegal act must be under a state or federal law that carries criminal penalties. Thus, if an employee refuses to perform an illegal act, but the only punishment is a civil penalty, the employee is out of luck.

An employee may be protected while the employee attempts to ascertain whether a requested action is criminal conduct. So, if the employer fires the employee for attempting to find out whether a requested act is criminal (such as by talking with a government agency), the employee may be able to sue for wrongful discharge.

State and Federal Legislative Protections
Child Abuse: An employee may not be retaliated against (or discriminated against) for reporting suspected child abuse. Tex. Fam. Code § 261.110.

Discrimination: An employee may not be retaliated against (or discriminated against) for opposing a discriminatory practice, making a discrimination charge, filing a discrimination complaint, or testifying, assisting, or participating in an investigation, proceeding, or hearing of discrimination. Texas law prohibits discrimination on the basis of race, color, disability, religion, sex, national origin, or age. Tex. Lab. Code Ann. § 21.055. You can learn more about this type of retaliation here.

General Public Evacuation: An employee may not be discharged (or discriminated against) in retaliation for leaving the employee's place of employment to participate in a general public evacuation ordered under an emergency evacuation order. Tex. Lab. Code Ann. § 22.002.

Hazardous Substances: An employee may not be discharged (or discriminated against) in retaliation for filing a complaint, assisting an inspector, instituting a proceeding, testifying, or exercising a right under the Hazard Communication Act. The Hazard Communication Act requires employers to provide employees with information regarding hazardous chemicals in the workplace. Tex. Health & Safety Code Ann. § 502.017(c).

Health Care Employees: Employees in the healthcare profession are protected under numerous statutes:

• Assisted Living Facilities: An employer who is licensed under Texas's Assisted Living Facilities laws may not retaliate against an employee for filing a complaint, presenting a grievance, or providing in good faith information relating to personal care services. Tex. Health & Safety Code Ann. § 247.068(a).

• Hospice & Home Care: An employer who is licensed under Texas's Home and Community Support laws may not retaliate against an employee for filing a complaint, presenting a grievance, or providing in good faith information relating to home health, hospice, or personal assistance. Tex. Health & Safety Code Ann. § 142.0093(a). Additionally, a provider of home or community-based services may not retaliated against for reporting suspected abuse, neglect, or exploitation of the individual requiring home services. Tex. Hum. Res. Code § 48.257.

• Hospitals: A hospital, mental health facility, or treatment facility may not discharge (or discriminate against) an employee for reporting violations of law. The report may be made internally to a supervisor or to a state regulatory of law enforcement agency. Tex. Health & Safety Code Ann. § 161.134(a).

• Intermediate Care Facilities for the Mentally Retarded: An intermediate care facility for the mentally retarded may not discharge (or discriminate against) an employee for reporting violations of law, including violations of laws pertaining to such facilities. The report may be made to a supervisor, a state regulatory agency, or law enforcement agency. Also, employees who initiate or cooperate in an investigation or proceeding pertaining to the facility's care, services, or conditions are protected. Tex. Health & Safety Code Ann. § 252.132. 

• Nursing Homes: A nursing home or related institution may not discharge (or discriminate against) an employee for reporting violations of laws pertaining to nursing homes and related institutions, including reports of abuse and neglect. Also, employees who initiate or cooperate in an investigation or proceeding are protected. Tex. Health & Safety Code Ann. § 242.133.

In addition, nurses receive additional protection when reporting certain violations required by law. Tex. Occ. Code Ann. § 301.413(b).

Medicaid: An employee may not be discharged (or discriminated against) for reporting fraud or falsification of a Medicaid claim. Tex. Hum. Res. Code § 36.115.

Occupational Health and Safety: An employee may not be suspended or discharged in retaliation for reporting an alleged violation of an occupational health or safety law via the Safety Violations Hotline (through the Texas Department of Insurance, Workers' Compensation Division). The report must be made in good faith. Tex. Lab. Code Ann. § 411.082.

Public Employees: An employee may not be discharged (or discriminated against) in retaliation for reporting a violation of the law by their employing government entity or another public employee to a law enforcement authority. Tex. Gov't Code Ann. § 554.002. Additionally, neither public employees nor their supervisors or managers may be subject to retaliation for using the local government grievance process or for reporting a violation of the local government ethics code. Tex. Local Gov't Code Ann. § 160.006, § 161.157.

Workers' Compensation: An employee may not be discharged (or discriminated against) in retaliation for filing a workers' compensation claim in good faith. An employee is also protected if she has hired a lawyer to represent her in a claim, instituted a workers' compensation proceeding in good faith, or has testified in a proceeding. Tex. Lab. Code Ann. § 451.001.

You are right to be concerned. Being a whistleblower is a tricky business. You have to be smart and you need to know exactly what your rights are as soon as possible and preferably before you take any action. 

Employees of Publicly Traded Companies: The Sarbanes Oxley Act of 2002, also known as SOX, protects employees of publicly traded companies and affiliates who participate in whistleblowing activities involving accounting, earnings reporting, and the duties and responsibilities of corporate officers. SOX makes it illegal for your employer to take action against you because you have been involved in protected activity.

The Sarbanes-Oxley Act prohibits an employer from discharging, demoting, suspending, threatening, harassing, or discriminating against a whistleblower. SOX protects whistleblowers for making internal or external reports of information about:

• Bank Fraud

• Mail Fraud

• SEC violations

• Securities Fraud

• Shareholder Fraud

• Wire Fraud

Employees of Federal Contractors: The False Claims Act is a federal law that allows people who are not affiliated with the government to file actions against federal contractors claiming fraud against the government. The act of filing such actions is informally called "whistleblowing." Persons filing under the Act stand to receive a portion (usually about 15-25 percent) of any recovered damages. The Act provides a legal tool to counteract fraudulent billings turned in to the Federal Government. Claims under the law have been filed by persons with insider knowledge of false claims which have typically involved health care, military, or other government spending programs.

The provision allows a private person to bring a lawsuit on behalf of the United States, where the private person has information that the named defendant as knowingly submitted or caused the submission of false or fraudulent claims to the United States.  The False Claims Act, passed by Congress on March 2, 1863, was an effort by the government to respond to entrenched fraud where the official Justice Department was reluctant to prosecute fraud cases. Importantly, a reward was offered in what is called the "qui tam" provision, which permits citizens to sue on behalf of the government and be paid a percentage of the recovery. The False Claims Act provides incentive to relators by granting them between 15% and 25% of any award or settlement amount.  

Fraud Claims Act/qui tam claims result from fraud in a number of different areas, including:

• Procurement fraud

• HUD fraud

• Medicaid fraud

• Airport Construction

• Medicare / Tricare fraud

• Energy contract fraud

• Defense Contractor fraud

• Government Health Insurance fraud

• Building and Roadway Construction

• Public works projects and federal government construction

One area in which qui tam claims are growing is the health care industry. Claims involving false billing or “up coding” bills to Medicare or Medicaid are increasingly common.

Final Thoughts

Whether you intended to be a whistleblower or not, the results of being termination for making a protected report can be devastating to a career. Get educated on the issue so that you can protect yourself and your family. If you feel you have been wrongfully terminated as a whistleblower, please feel free to contact us.