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Qui tam actions and how North Carolina protects employees

On Behalf of | Aug 23, 2022 | Employment Law

As an employee, finding out that your employer is engaging in fraudulent conduct can be a nerve-wracking experience. Should you do something about it? Will you lose your job if you do? When that fraud is committed against the state, North Carolina gives you both an option and protection.

What is a qui tam action?

Governments have an interest in preventing fraud, especially when it’s committed against the government itself. However, fraud can be difficult to identify, so North Carolina provides employees a means to address it for the employee’s own benefits. This is a way of encouraging employees to come forward about fraud they can see, but the state cannot.

North Carolina’s False Claims Act allows employees to file a qui tam action, where the employee literally files a fraud lawsuit against the employer, on behalf of the state. North Carolina can choose to join the lawsuit or allow the employee to pursue it on their own.

Protection against retaliation

The False Claims Act specifically bars an employer from retaliating in any way against an employee who brings a qui tam action. This includes termination, demotion, suspension, threats, harassment and any other form of discrimination. Should an employer violate this provision, the act also gives the employee the right to sue.

If the worker is successful in their lawsuit, the court may award anywhere from 15% to 30% of the proceeds, depending upon whether the state joins in the lawsuit. These aspects of the act give the employee both a powerful incentive to come forward and protection when they do.