One of the questions we deal with most frequently from our whistleblower clients is: what documents can I take out of my place of employment? What can I show you? And for us as lawyers the question is (and we’ve written about it before): Is there anything in this pile of paper (or in these thumb-drives) that we can’t even look at all?
For any lawyer unfamiliar with the False Claims Act or the SEC and IRS whistleblower programs, these questions can be daunting. The wrong answer can subject a relator with otherwise valid claims to dismissal and expose the client and lawyer to substantial sanctions: You don’t want to mess up a potential case before it even begins.
Fortunately, there’s fairly clear guidance that emerges from an examination of how courts typically deal with these kinds of problems — in litigated cases where employers and their former employees are duking it out over who took what, whether they had the right to, and whether anyone’s going to pay for the removal of documents.
The basic framework is this (leaving aside just for the moment the special issue of privileged documents):
- Companies have a legitimate property interest in the emails, papers, and other documents generated by their employees.
- These property interests are routinely recognized by courts, particularly in the context of former employees trying to use these materials to start up a new business or work for a competitor, for example. (Think trade secrets.)
- But the property interests only go so far, and they can collide with other interests, as they do in the case of statutorily protected whistle-blowing activity.
- The government has a right to use its powers to collect evidence of criminal wrong-doing, e.g., by subpoena or search warrant, and no company can use their property rights argument to defeat that interest.
- Similarly, the FCA empowers relators (acting on behalf of government interests) to pass along company documents as evidence of fraud. Indeed, the statute creates an obligation on the part of relators to convey to the government everything they know about the problem, including any supportive documentation. So a relator could actually get some heat from the government if he/she came in and told the story but did not produce relevant documents from the employer.
- So you have a competition between competing values. This sometimes plays out when companies file counterclaims against relators (e.g., for the theft of property) in non-intervened unsealed cases. These are where the interesting written opinions are.
- You’ll see in the cases that where relators keep copies of selected relevant documents that they would normally have seen in the ordinary course of their business, courts generally say that’s o.k. and protected by your statutory rights under the FCA or other similar law.
- Often an employer will argue that the removal of documents violates an express confidentiality agreement or a common-law duty of loyalty. Neither of these arguments trump whistleblower protections when a court determines that an employee is acting reasonably.
- Courts generally do not approve, however, of relators who go snooping around the company looking for evidence that they normally wouldn’t have the right to see.
- They also do not approve, generally, of a whistleblower who takes the only copy of a document from the premises (e.g., an original where there are no copies). (This is rare in the electronic age, but is still possible.)
- This dividing line makes sense from a “rough justice” sense, even if it may be hard to square with the general purposes of the FCA. It’s a reflection of the human reaction of judges to the notion of whistleblowers as internal spies as opposed to do-gooders, i.e., there must be some limit to how far an employee can go in gathering evidence at his/her place of employment. Courts feel uncomfortable blessing unrestricted licenses to poke around.
So in practical terms, we typically advise clients to give us what they have in their “wingspan” and nothing else. In other words, if it’s a document that you saw or would normally see in the ordinary course of your work, it’s probably o.k. to share that with us.
But — there’s always a “but” in the law — then we have to give clients special care instructions with respect to anything potentially privileged, which could be the subject of a whole additional article. The basic approach is that we quarantine any documents where we think there’s an arguable claim of privilege, and we come back to them only if we need to. If we need to, we will often engage separate “taint” counsel for that purpose, so we don’t run any risk of disqualifying ourselves. The unfortunate corollary to this rule is that it is very risky for in-house counsel to serve as a False Claims Act relator as much of what they work on is privileged.
A recent case out of the 11th Circuit Court of Appeals is consistent with this general pattern described in the bulleted points above. Although it was not a False Claims Act case, the dispute between the former employee and the employer revolved around the employee’s having accessed other employee’s’ email accounts (which did not have personalized passwords). Gaining access using a universal password, the former employee found evidence of wrongdoing which he then reported to compliance. But the tables were turned when ultimately the investigation turned focused on him for having improperly obtained the information. He was fired and the courts upheld the firing. The case is Brown Jordan International et al. v. Carmicle.
So there’s a lot of nuance in this issue. If you’re not sure, err on the conservative side. Or get advice first. Good advice can keep you safely in the zone of “protected activity” under the applicable whistleblower laws, without having to worry about later claims by the employer of document theft and the like.