Court Enforces Arbitration Agreement, Requiring Employees to Arbitrate Whistleblower Claims


We’ve frequently discussed the growing likelihood that courts will enforce arbitration contracts to solve an extensive selection of issues arising from the employment relationship. (See here, for instance.) Lately, a federal court provided another example it compelled the arbitration of three nurses’ False Claims Act (FCA) retaliation claims from the hospital that employed them. But, a legal court went one step further by also requiring the nurses arbitrate their underlying declare that a healthcare facility had defrauded Medicare, therefore supplying an essential precedent for healthcare companies, government contractors along with other employers who work with the us government and, therefore, could be targets of FCA claims.The situation was introduced by three nurses who’d labored at Evercare Hospital in Ohio and alleged the hospital had involved in Medicare fraud in breach from the FCA. They sued a healthcare facility as “relators” trying to recover damages with respect to the U.S. government (a so-known as “qui tam” claim.) Additionally, the nurses claimed the hospital had retaliated against them to be whistleblowers, therefore violating the anti-retaliation provisions from the FCA. However, the nurses were parties to arbitration contracts using the hospital that needed these to arbitrate “any dispute …which arises or pertains to employment” including “whistleblower and retaliation claims.” Counting on this agreement, a healthcare facility gone to live in compel arbitration from the nurses’ retaliation claims as well as their qui tam claims.

Requiring the nurses to arbitrate the retaliation claims would be a no-brainer. In the end, the arbitration agreement clearly needed arbitration, and also the Federal Arbitration Act and established situation law generally require that valid arbitration contracts be enforced. Much trickier, however, was the nurses’ qui tam claim, since claiming really “belongs” towards the government and it was being went after through the nurses around the government’s account within the nurses’ capacity as “relators.” Importantly, a legal court ruled the arbitration agreement needed arbitration from the qui tam claims because the agreement clearly put on whistleblower claims. But, arbitration won’t always finish the qui tam part of the situation. Because the government includes a stake within the outcome and isn’t bound through the arbitration agreement between your hospital and also the nurses, a legal court ruled that following a arbitration award the parties must either ask that the federal government accept to the arbitrator’s award or resume litigation from the qui tam claims. So, time will inform if the arbitration achieves your final resolution from the qui tam claims.

For employers, this situation is yet another indication from the natural part arbitration contracts and policies can enjoy included in a wider dispute resolution technique for worker claims, and underscores the significance of considering the scope and benefits and drawbacks of the well-drafted arbitration agreement or policy. This is particularly so for businesses who cope with the us government and also have an chance to pressure employees to arbitrate FCA whistleblower claims.


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