Retaliation Under False Claims Statutes as a Cause of Action in New York

False Claims statutes are designed to prevent fraud against government programs by encouraging insiders—usually employees—to report dishonest behavior. To protect those whistleblowers, both federal and New York State laws include provisions that make it illegal for employers to retaliate against employees who report fraud. If an employee is fired, demoted, or otherwise punished for speaking up, they may have a legal claim for retaliation.

To win this kind of lawsuit in New York, a plaintiff must prove three key elements, each of which is discussed below.

The Employee Engaged in Protected Conduct

The first requirement is that the employee took some action that the law considers “protected.” This means the employee tried to stop, investigate, or report fraud committed against the government. For example, if an employee discovers that their employer is billing Medicaid for services that were never provided, and the employee raises concerns or starts collecting evidence, that activity is protected.

The employee does not need to file a formal lawsuit or report directly to a government agency. Even internal complaints or efforts to stop the fraud can qualify, as long as the activity relates to exposing or preventing fraudulent claims to the government.

The Employer Knew About the Employee’s Conduct

Next, the employer must have known that the employee was engaging in protected conduct. An employer cannot retaliate if it has no idea that the employee was doing something protected. This means the employee’s actions must be noticeable enough—or communicated clearly enough—that a manager or decision-maker becomes aware of them.

For instance, if an employee sends an email to a supervisor questioning suspicious invoices submitted to a government agency, that may be enough to show the employer knew about the whistleblowing.

The Employer Retaliated Because of the Protected Conduct

Finally, the employee must prove that the retaliation happened because of their protected activity. Retaliation can take many forms—termination, pay cuts, job reassignment, or harassment. The key is proving a direct link between the whistleblowing and the negative action. Timing, patterns of behavior, and written records can all help show this connection.

If an employee was performing well but was suddenly fired soon after reporting fraud, that timing may suggest retaliation.

Conclusion

Retaliation under false claims statutes is a serious issue in New York. Employees who help stop fraud against the government deserve protection, and the law gives them a way to seek justice if they are punished for doing the right thing. To win a case, the employee must show they acted to expose fraud, their employer knew it, and they were punished because of it. These cases are about fairness, accountability, and protecting those who speak up when they see wrongdoing.

Find the Law

“To state a claim for retaliation under a false claims statute, a plaintiff must show that ‘(1) the employee engaged in conduct protected under the [statute]; (2) the employer knew that the employee was engaged in such conduct; and (3) the employer discharged, discriminated against or otherwise retaliated against the employee because of the protected conduct’  (McAllan v. Von Essen,517 F.Supp.2d 672, 685 [S.D.N.Y.2007] [internal quotation marks omitted]).” Landfield v. Tamares Real Estate Holdings, Inc., 976 N.Y.S.2d 381, 382 (N.Y. App. Div. 2013)