Federal Court Rejects Higher Notice Standard for ‘Fraud-Alert' Employees

In a case with implications for compliance officers, the U.S. District Court for the Southern District of New York has definitively rejected the heightened-notice requirement that some jurisdictions had imposed on certain plaintiffs in False Claims Act (FCA) cases, but it has adopted the “but-for” causation standard in these cases.

At issue in Malanga v. New York University was whether an employee, Michelle Malanga, was terminated by the university because she reported the university’s alleged improper billings to the federal government. The FCA protects whistleblowers from retaliatory discharge if the whistleblower establishes that (1) the conduct was protected under the statute, (2) he or she made the employer aware of the conduct, and (3) he or she was terminated in retaliation for the conduct.

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