U.S. Tenth Circuit - The FindLaw 10th Circuit Court of Appeals Opinion Summaries Blog

Post-Employment Retaliation Not Covered by False Claims Act

Some ex-workers may wish they could start over, but the False Claims Act doesn't work that way.

In Potts v. Center for Excellence in Higher Education, the U.S. Tenth Circuit Court of Appeals said the Act doesn't protect employees from discriminatory retaliation after their jobs end. The unanimous panel said the law "unambiguously" does not protect workers post-employment.

In other words, an employer can't really retaliate against employees at the job if they aren't there. If they are going to blow the whistle, they better do it on the job.

False Claims

Debbie Potts worked as a campus director at CollegeAmerica Denver, which later became the Center for Excellence in Higher Education. She resigned, claiming the institution "actively deceived" its accreditor to maintain accreditation.

She settled her claim for $7,000 and unemployment benefits. In exchange, she promised not to file any complaints against CollegeAmerica and not to disparage it.

Potts then sent a disparaging email to another former employee, and the institution sued her for breaching the agreement. She responded by sued under the False Claims Act in federal court, alleging the breach of contract case was retaliation.

On a motion, a district court dismissed her case. The judge said there is no whistleblower protection for an employer's acts that happen after employment ends.

"What Matters"

The Tenth Circuit affirmed, saying "what matters is the employee's employment status when the employment ends." Allegedly retaliatory acts "must" occur during the employment.

"Obviously, a former employer cannot discharge, suspend, or demote a former employee," Judge Gregory A. Phillips wrote for the unanimous panel. "Nor can a former employer discriminate against a former employee in the terms and conditions of employment."

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