After the Whistle Blows: What Constitutes Retaliation?
It is illegal to retaliate against a whistleblower, but what is retaliation? Clues may emerge following developments late last month in two unrelated cases: the first involving the termination of a pharmaceutical company’s senior director of quality assurance, and the second involving the ouster of PepsiCo Inc.’s general counsel.
In July, a three judge panel of the Ninth Circuit reversed a lower court’s dismissal of Jeff Campie’s claims against Gilead Sciences, Inc., his former employer. The case involves Campie’s allegations under the False Claims Act that Gilead made false statements about its compliance with FDA regulations regarding certain HIV drugs, resulting in Gilead’s fraudulent receipt of billions of dollars from the government. The panel held that Campie adequately pled a claim for retaliation because his complaint alleged that he “had an objectively reasonable, good faith belief that Gilead was possibly committing fraud against the government,” and that Gilead terminated Campie because he engaged in protected whistleblowing activity. Gilead petitioned the court for a rehearing which, despite being supported by the U.S. Chamber of Commerce, was denied by the court on September 27.
Also on September 27, The Wall Street Journal reported that the SEC is investigating allegations that Maura Abeln Smith, a former general counsel of PepsiCo, was pushed out of the company in June 2012 because she had voiced concerns about compliance problems at an acquisition target. The resolution of this matter, like the Gilead case, should help define what is—and is not—considered to be retaliation.