The False Claims Act prohibits employers from discriminating against an employee “because of” his or her protected conduct. In a case of first impression recently decided, Lestage v. Coloplast Corp., the First Circuit explained the meaning of “because of.” Lestage, a salesperson, sued Coloplast alleging that, after it learned she had filed a qui tam action against it and against one of its customers, Coloplast retaliated against her in violation of the False Claims Act by placing her on leave and then assigning her inferior accounts when she returned. A jury trial awarded Lestage $762,525 in compensatory damages. Coloplast unsuccessfully moved for judgment as a matter of law and new trial, and then appealed. The First Circuit affirmed the judgment.
In a 2004 decision, U.S. ex rel. Karvelas v. Melrose-Wakefield Hosp., this circuit had stated, in passing only, that an employee making a retaliation claim under the False Claims Act must show that the retaliation was motivated, at least in part, by the employee’s engaging in protected activity. Since then, in two cases involving the Age Discrimination Act, Gross v. FBL Financial Services, Inc. and University of Texas Southwestern Medical Center v. Nassar, the Supreme Court held that the employee must show that age was the but-for cause for the employer’s adverse employment action. The Age Discrimination Act forbids employers from discrimination against individuals “because of such individual’s age,” language materially identical to that in the False Claims Act.
Given the nearly identical statutory language between the two statutes, the First Circuit reasoned that the but-for standard also applies to retaliation claims under the False Claims Act. In doing so, the First Circuit joins several circuits (the Third, Fourth, Fifth and Elevenths Circuits) that have applied that standard.
The Court also rejected the employer’s argument that the jury trial instructions, which used the “substantial motivating factor” standard rather than “but for” standard for causation, was plain error. It held that the instructions were error but they were not plain error simply because this circuit had never decided this question. The Court also noted that it is difficult to fault the district court judge when the employer’s counsel had not objected to that instruction at trial.