Your company’s compliance officer — the person to whom you entrusted your confidential business information — alleges you wrongfully terminated her after she tried to prevent you from violating a federal law.
This 8th Circuit opinion rules against the whistleblower in a case that is a fine example of internal breakdown handling a compliance complaint, and sparks an important business question:
Who is a whistleblower?
- A person who is just a fingerpointer and a troublemaker just trying to deflect criticism at times when they’re not doing their job well?
- Or is it somebody who’s objecting to something in your corporate culture that tolerates — even promotes – unethical behavior to enrich the company, like fraud, theft or wiretapping (a la News of the World?)
The case also shows the importance of not assigning roles to compliance officers that are at cross purposes to each other — such as expanding the company while being the compliance brake on violations and deficiencies.
Julie Mahony, the VP of Nursing for a home-health provider (heavily dependent on billing Medicaid) insisted a new office in Sheldon, Iowa, could not open until Medicaid-related paperwork was done. Compliance with Medicaid rules was one of her responsibilities, but she was also in charge of opening the new branch office under corporate timeframes.
A heated exchange ensued with the president/CEO S. Tucker Anderson, and he fired Mahoney, saying she failed in her task of opening the new branch office, which had been assigned months before — and part of that process was having CMS process the CMS-855 form. The company had set June 1 as the target date to open the office, and when June 1 rolled around, the CMS-855 form still needed to be submitted.
Mahony contended that Anderson fired her to get her out of the way, so the unaccredited facility could start billing Medicaid fraudulently, and prepared a state-law wrongful termination suit, the basis of which was her whistleblower allegations under the Federal False Claims Act.
The employer took this seriously: it immediately closed the office and took six weeks to get the requisite paperwork done, before opening the new branch.
This 8th Circuit opinion, as you can see, sides with the company, saying the dismissal was justified, and that Mahony was not protecting the public interest with her compliance complaint. There were no false claims submitted and no fraud occurred, the appeals court said. One judge, however, wrote a dissenting opinion.