Federal Contractors Should be Aware of “Whistleblower” Laws

Two important federal “whistleblower” laws exist that directly apply to, and can impact, federal contractors’ relationships with their employees.  They specifically relate to a company’s performance under a contract with the federal Government: the federal False Claims Act and legislation entitled “Contractor employees: protection from reprisal for disclosure of certain information.”

The federal False Claims Act, codified at 31 U.S.C. § 3729, et seq., was the first statute to protect whistleblowers in the United States.  For employees of federal contractors who exercise rights or participate in proceedings under the False Claims Act, there are numerous “whistleblower” protections, codified at 31 U.S.C. § 3730 (h).  An important False Claims Act case in the employment law context is United States (Richard Sutton) v. Double Day Office Services, Inc., 121 F.3d 531 (9th Cir. 1997).  In Double Day, the court concluded, notwithstanding the fact that there is no private right of action under the Service Contract Act, that the employee was entitled to pursue his False Claims Act suit on behalf of the Government for monies allegedly owed to other employees and him under the Service Contract Act. 

“Contractor employees: protection from reprisal for disclosure of certain information” is codified at 41 U.S.C. § 265, and it is directly applicable to prime federal contractors doing business with “non-military” executive agencies.  There exists a corollary law applicable to contractors doing business with military agencies, found at 10 U.S.C. § 2409. 41 U.S.C. § 265 offers employees protection from retaliation based on disclosures to certain Government officials about violations of laws in connection with a federal contract.  The law explains that there are a variety of remedies ifthe head of an executive agency determines that a contractor has subjected a person to a reprisal.

These laws should prompt federal contractors to ensure, where applicable, strict compliance with the Service Contract Act and other employment-related requirements in their Government contracts.  Moreover, if alleged non-compliance is brought to the attention of the company by an employee, the “whistleblower” protections noted above should be closely observed.