Illinois Court Sets Elements for Retaliatory Discharge Under False Claims Act in Partnership Dispute

A recent case in the Northern District of Illinois, Helfer v. Associated Anesthesiologists of Springfield (2016 WL 183501, addressed what a plaintiff must show to sustain a claim for retaliatory termination under the False Claims Act.

Donald H. was an anesthesiologist and partner at Associated Anesthesiologists of Springfield, Ltd. in Springfield, Ill., which provides anesthesia services for Memorial Medical Center. Donald’s employment agreement gave Associated the right to terminate him with 90 days’ notice.

Donald’s fellow partners had expressed their displeasure with him for taking it upon himself on several occasions to contact third parties, such as Memorial and the Internal Revenue Service, to discuss billing and other matters concerning Associated, without the authorization of the other partners. These communications had resulted in Associated being audited. Some time thereafter, in June 2009, Donald raised concerns with other partners and shareholders about Associated’s billing of Medicare. When his concerns went unresolved, he emailed the Center for Medicare & Medicaid Services directly, again without authorization from the partners.

After learning of this communication, several partners drafted a motion to remove Donald which was signed by the rest of the partners. Shortly afterward, Donald was notified of his termination. Donald received no prior warnings nor was he given 90-day written notice, but he was paid salary and benefits for 90 days after being informed of his termination. Donald filed a retaliation claim against Associated, claiming he was illegally terminated for contacting Medicare in violation of the False Claims Act.

To win, Donald must prove that he contacted Medicare “in furtherance of an action” under FCA and that his conduct was “connected to” Associated’s decision to terminate him (Halasa v. ITT Educ. Serv. Inc., 690 F.3d 844 (7th Cir. 2012)). In its motion for summary judgment, Associated argued that Donald could not show he was terminated “because of” his email to Medicare, an act protected by FCA.

U.S. District Court Judge Sue Meyerscough denied Associated’s motion on the grounds that Donald had presented a genuine issue of material fact as to the reasons for his termination. Based on the Seventh Circuit’s holding in Serafinn v. Local 722 Int’l Bhd. Of Teamsters, 597 F.3d 908 (2010), the judge ruled the pivotal issue was whether Donald’s communication with Medicare was the “but for” cause of his termination.

In depositions, the partners claimed the Medicare contact was part of an ongoing issue with Donald’s behavior and not the exclusive reason they signed off on his termination. Further, Associated insisted it was Donald’s violation of his confidentiality agreement, not his inquiry about fraud, that precipitated the motion to terminate.

However, the judge wrote in her opinion that a confidentiality agreement cannot trump the FCA’s policy of protecting whistleblowers. Further, the “salient act” was not the signing of the motion but the decision to create and circulate it, and an act need not be the only cause in order to be the but-for cause. The partners’ testimony “does not foreclose the possibility that a jury could reasonably find for [Donald] because ‘but-for’ cause does not mean … ‘exclusive cause’” the judge wrote.

Noting that the partners created the motion to terminate only hours or days after learning of Donald’s contact of Medicare, Meyerscough found that “sufficient evidence exists for a reasonable jury to find that [Donald] would not have been terminated if he had not contacted Medicare.”The consumer and tax payer rights law firm of Lubin Austermuehle represents whistleblowers who are pursing qui tam lawsuits at any level of government or for violations of the securities laws and IRS code, including claims under the Illinois Whistleblower Act, the Chicago whistleblower ordinance, the Dodd-Frank Act and the federal False Claims Act. Based in Chicago and Oak Brook, Ill., our Cicero and Aurora area qui tam and False Claims Act lawyers stand ready to represent whistleblowers throughout the United States — regardless of whether prosecutors have decided to join the lawsuit. If you know about fraud against a government agency and you’re ready to speak up, you can learn more about whistleblower lawsuits at a free, confidential consultation. To set one up, please contact Lubin Austermuehle online or call 630-333-0333 today.

Lubin Austermuehle also handles partnership disputes and ownership disputes between owners in closely held companies including doctors and physician partnerships.  We have handled many cases involving ownership disputes with breach of fiduciary duty and other claims.

Contact Information