Background - News & Events (Landing) 2016

Tenth Circuit Enforces Whistleblower’s Release of Retaliatory Discharge Claim

February 17, 2015

Author: Mark R. Troy.

The Tenth Circuit recently affirmed the enforceability of releases of retaliation claims under the False Claims Act (FCA). In VanLandingham v. Grand Junction Regional Airport Authority, plaintiff, who was director of security at the Grand Junction, Colorado airport, alleged that she was demoted and ultimately terminated after refusing to comply with her supervisor’s misrepresentation to the government about the reason why federal funds were needed to build a perimeter fence at the airport. As part of her termination, she signed a separation agreement and general release in return for seven weeks of pay. She later sued the airport authority under the retaliatory discharge provision of the FCA, asserting that the release she had signed violated public policy and was not enforceable. The district court enforced the agreement and dismissed her claim.

In affirming the district court’s decision, the Tenth Circuit rejected plaintiff’s claim that her release was not “knowing and voluntary,” finding: (a) the language of the agreement was clear, and it specifically released all claims relating to her employment; (b) it was broad enough to cover her FCA retaliation claim even if she did not know of that particular cause of action, and (c) she had sufficient time (21 days) to review the agreement and consult with a lawyer even though she chose not to speak with a lawyer. The court also rejected her claim that the FCA’s policy of encouraging whistleblowers to come forward about fraud against the government outweighs a private release. The court held that the FCA does not contain an “affirmative indication of Congress’ intent to preclude waiver.” The court noted the distinction between the personal retaliation claim at issue in this case and a false claims cause of action brought in a qui tam action – a cause of action that may be dismissed only if the court and the Attorney General consent. Here, citing cases from the Second and Fourth Circuits, the court held that no public policy rationale applies to prohibit the release of plaintiff’s retaliatory discharge claim as part of a private severance agreement without prior disclosure to the government.

Mark R. Troy
Senior Counsel – Los Angeles
Phone: +1 213.443.5576