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3d Circuit Clarifies Standard in FCA Retaliation Cases

On February 26, 2018 by Schnader in Labor and Employment

By Jo Bennett

In a precedential decision, the Third Circuit Court of Appeals held that the “but-for” standard applies in retaliation cases filed under the False Claims Act (FCA).

The False Claims Act prohibits retaliation against employee whistleblowers who engage in protected activity.  Under the FCA, the Third Circuit noted, an employee is entitled to relief if she was “discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment because of lawful acts.”

In Difiore v. CSL Behring, LLC, decided in January, Marie Difiore claimed that CSL retaliated against her for voicing concerns that the company was marketing drugs for off-label use. At trial, the judge instructed the jury that the protected activity must be the “but-for” cause of adverse actions against DiFiore.  The jury found for CSL. On appeal, the question was which causation standard applies to the “because of” language in the statute. DiFiore argued that the FCA required only that her protected activity be a motivating factor in the adverse action.

To resolve the case, the Third Circuit looked to two Supreme Court cases: Gross v. FBL Fin. Servs., Inc. which held that the words “because of” in the Age Discrimination in Employment Act required the “but-for” standard, and Nassar v. University of Texas Southwestern Medical Center, which held that the word “because” in Title VII of the Civil Rights Act also required the “but-for” standard in Title VII retaliation cases.  Following this precedent, as well as its own cases interpreting Gross and Nassar in the context of FMLA retaliation claims, the Third Circuit concluded that to find retaliation, the protected conduct must be the “but-for” cause of the adverse employment action.