Factual background of the case
A sales manager for Cardiovascular Systems Inc., Steven Babyak filed internal complaints about violations of the federal Food and Drug Administration’s rules, violations of the Sarbanes-Oxley Act and illegal kickbacks that the company paid to doctors. Babyak had worked at the company from Oct. 2012 until June 2015. Babyak complained to the company’s upper management. After he did so, his immediate supervisor engaged in a retaliatory campaign against him by reassigning some jobs to others, raising his sales quota by 41 percent and doing things to make the work environment hostile. After he complained about the retaliation to the upper management, it conducted an investigation, finding no wrongdoing despite corroborating statements made by two other employees. Babyak was subsequently reassigned, and he then formally reported violations under the Sarbanes-Oxley Act. Following that, he was terminated by the company.
Babyak asserted that his complaints were protected whistleblowing activities. He also argued that each of the company’s actions towards him constituted unlawful retaliation. He argued that his termination was wrongful and that a former supervisor had stated that he would have been able to work with him again, but the company simply fired him because of his complaints of violations.
The defendant argued that Babyak was fired because he could not get along with others in the workplace. The company also argued that it had done nothing wrong and that it had no other choice than to fire Babyak.
Demands and offers
Before trial, the plaintiff made a demand of $1.5 million. The defendant made a §998 of $275,000, which was not accepted. The parties then proceeded to jury trial.
The trial lasted for five days, and the jury then deliberated for one day concerning the compensatory damages and two days for the punitive phase of deliberations. The jury returned a verdict in the plaintiff’s favor in a gross award amount of $25,142,120. Of that amount, $2,742,120 for the plaintiff’s past and future lost earnings. The remaining award amount of $22,400,000 was for punitive damages to punish the defendant for its behavior and to deter other companies from engaging in similar acts.
Whistleblower protections under California law
Whistleblowers are protected under multiple federal and state laws in California. A whistleblower is an employee who files complaints about his or her employer violating the law. This could include reporting an employer for committing OSHA violations, Medicaid or Medicare fraud or any other illegal activity. In California, the state prohibits employers from making rules forbidding employees from reporting them for violations or for participating in investigations by the government into allegedly illegal activities. Employers are also prohibited from engaging in any retaliatory job actions against whistleblower employees, including wrongfully terminating them. When employers violate California’s whistleblower protection statute, they may be liable to pay compensatory and punitive damages to the workers as well as civil fines to the state.
Federal whistleblower protections also exist. Under federal law, employees who report their employers for engaging in certain illegal activities are protected under the False Claims Act. Under that law, they may file qui tam lawsuits against their employers. In a qui tam action, an individual sues an entity on the government’s behalf. The government may choose to step in and take over the lawsuit or may allow the individual to proceed alone. When a qui tam lawsuit is successful, whistleblowers may be awarded a percentage of the total amount the government recovers, which may be around 30 percent. In addition to recovering through qui tam federal lawsuits, whistleblowers who are retaliated against may also be able to file separate wrongful termination or retaliation claims against their employers.
Why are whistleblowers protected?
Whistleblowers are protected under the state laws of California and the federal government to encourage workers to report companies that are violating the law. The government is often not able to identify companies that are engaging in unlawful activities. The actions of whistleblowers have helped the state and the federal government to recover millions of dollars of taxpayer money that otherwise might not have been recovered.
Contact an attorney
If you have reported your employer for engaging in illegal activity and have been wrongfully terminated as a result, you might want to seek legal help. An experienced lawyer in Los Angeles may assist you with recovering damages for the retaliatory actions of your employer. If you are aware of illegal activities and want to initiate a qui tam lawsuit, you might also want to talk to your attorney about doing so.