“But-For” Causation Is Now Required In False Claims Act Retaliation Cases

In a bit of good news for employers, the U.S. Court of Appeals for the Third Circuit, which covers New Jersey, Pennsylvania, Delaware and the Virgin Islands, held that employees claiming that their employers retaliated against them because they made a complaint under the False Claims Act (“FCA”), 31 U.S.C. § 3730(h), must prove that the adverse action would not have occurred “but-for” the complaint. DiFiore v. CSL Behring, LLC, No. 16-4297 (3d Cir. Jan. 3, 2018). 

In DiFiore, the plaintiff claimed that she was forced to resign after she complained about the employer’s use of off-label marketing for certain pharmaceutical drugs. In dismissing the case, the district court rejected the former employee’s argument that under the FCA she was required to prove only that her protected activity was a “motivating factor” in the employer’s adverse employment actions. Instead, it instructed the jury that the “but-for” causation standard applied. After a jury found in the employer’s favor, the former employee appealed arguing, among other things, that the district court should have instructed the jury on the “motivating factor” standard. 

The Third Circuit affirmed. Citing Gross v. FBL Fin. Servs., Inc., 557 U.S. 167, 176 (2009) and Univ. of Tex. Sw. Med. Ctr. v. Nassar, 133 S.Ct. 2517, 2533 (2013), the Court wrote, “[t]he district court correctly applied Supreme Court case law when it instructed the jury using the ‘but-for’ causation standard for DiFiore’s FCA retaliation claim.” It rejected the employee’s reliance on the Court’s decision in Egan v. Delaware River Port Authority, 851 F.3d 263 (3d Cir. 2017), which held that the “mixed motive” standard applied to cases involving Family and Medical Leave Act (“FMLA”) retaliation claims, relying on the controlling statutory language. In distinguishing Egan, the Court observed that “[u]nlike the language of the FMLA anti-retaliation regulation, the language of the FCA anti-retaliation provision uses the same ‘because of’ language that compelled the Supreme Court to require ‘but-for’ causation in Nasser and Gross.” For this reason, the Court held retaliation claims under the FCA require “but-for” causation and affirmed the District Court’s instruction to the jury that used the more stringent standard. 

The Bottom Line
The “but-for” causation standard set forth by the Third Circuit requires employees to prove the unlawful retaliation would not have occurred in the absence of an employer’s alleged wrongful actions. This opinion is encouraging for employers that continue to face increasing numbers of retaliation claims. Nevertheless, the best solution to a problem is preventing it in the first place, which is why we continue to recommend employers work with experienced employment law attorneys before disciplining or discharging employees who have engaged in what might be considered protected activity.