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Key Takeaways: 

-    Pharmaceutical and healthcare whistleblower cases are among the cases with the largest settlements.
-    New whistleblower laws have been enacted, but it is too early to tell what effect they will have.

The US Department of Justice (DOJ) has seen billions of dollars in settlements stemming from whistleblower claims, and the US Securities and Exchange Commission has seen an increase in whistleblower tips related to cryptocurrency.

This list prepared by the Association of Corporate Counsel is based on the ACC Annual Meeting program, “Recent Developments and Emerging Issues in Whistleblower Litigation” by Sarah Bouchard, Partner, Morgan Lewis & Bockius LLP, Melinda Burrows, Assistant General Counsel & Global Compliance Officer, ICON, and George Washington, Chief Litigation Counsel, Orange Business Services.

US Department of Justice Fiscal Year 2020 Settlements:

-    The DOJ had $2.2 billion in settlements based on whistleblower claims
-    $309 million of the $2.2 billion went to whistleblowers
-    $1.8 billion of the 2020 total was for pharmaceutical/healthcare cases
-    6 of the 12 biggest settlements were for pharmaceutical/healthcare cases

US Securities and Exchange Commission (SEC) Fiscal Year 2020 Whistleblower Enforcement Trends:

-    Insecurities stemming from working remotely and job insecurity lead to an increase in whistleblower tips.
-    Common whistleblower complaints concern corporate disclosures and financials.
-    There has been an increase in whistleblower tips about cryptocurrency. 

New Whistleblower Laws:

-    The Anti-money Laundering Act of 2020 became effective on Jan. 1, 2021, and since the law is new it has not seen any cases yet. The Act applies to financial institutions. 
-    The Criminal Antitrust Anti-Retaliation Act of 2019 covers employees, contractors, subcontractors, and agent of employers for whistleblowing in making a disclosure to the government or to a supervisor at the company. There has not been much activity as the law is new. 

Litigation Trends:

Robertson v. Intratek Computer (5th Cir. 2020): An employee was fired and later brought suit as a whistleblower under the federal whistleblower statute, and the former employer moved to stay the litigation pending arbitration. The employee claimed the whistleblower statute gave him a freestanding right to a jury trial, but the U.S. Court of Appeals for the Fifth Circuit determined there was no such language in the statute, and thus the arbitration agreement prevailed. 

SEC v. Collector’s Coffee Inc. (S.D.N.Y. 2021): The issue was whether whistleblower protection applies to investors. The definition of whistleblower is not limited to persons in the employ of a company, and an investor sued a company for material misrepresentations. The parties settled and the settlement agreement included a provision that prevented the investor from going to agencies such as the SEC with claims against the company. The SEC found out about case and sued the company, which claimed the investors were not employees and could not be whistleblowers. The US District Court for the Southern District of New York held that whistleblower protection extends to anyone, not just a company’s employees.

U.S. ex rel. Felten v. William Beaumont Hospital (6th Cir. 2021): The issue was whether the False Claims Act applies to former employees, and the U.S. Court of Appeals for the Sixth Circuit held that the Act does apply to former employees. 

Learn More:

ReadNeed to Know: Actual Knowledge Key to Invoking Whistleblower Protections,” by Justin McDonnell, Partner, and Andrew Gray, Partner, King & Wood Mallesons (2021).

ReadWhistling at Work: Whistleblowing,” by Selwyn Black and Yue Lucy Han, Carroll & O'Dea, Sydney, Australia, Member of International Society of Primerus Law Firms (2020).

Check out the ACC Resource Library: www.acc.com/resource-library

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Region: United States
Interest Area: Compliance and Ethics
The information in any resource collected in this virtual library should not be construed as legal advice or legal opinion on specific facts and should not be considered representative of the views of its authors, its sponsors, and/or ACC. These resources are not intended as a definitive statement on the subject addressed. Rather, they are intended to serve as a tool providing practical advice and references for the busy in-house practitioner and other readers.
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