Third Circuit Rules That Employer-Friendly 'But For' Causation Standard Applies To False Claims Act Retaliation Claims

Author:Mr David Barmak and Donald C. Davis
Profession:Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

In the case of DiFiore v. CSL Behring, LLC, the Third Circuit ruled for the first time that the more demanding "but for" causation standard applies to retaliation claims under the False Claims Act ("FCA"), rejecting the lower "motivating factor" (also commonly known as the "mixed-motive") standard. The Third Circuit's ruling is a welcome result, especially for employers who deal with the federal government and may, therefore, be exposed to FCA retaliation claims. But, employers need to be mindful that different causes of action have different causation standards. For example, the more stringent "but for" standard applied by the Third Circuit to FCA retaliation claims also applies in Title VII retaliation and ADEA cases, but the lower "mixed motive" standard applies in other cases, including "status based" Title VII and ADA discrimination claims. So, employers are left with a mishmash of different causation standards to consider when assessing risk around employment decisions and defending cases.

At trial, the District Court in DiFiore had instructed the jury to use the "but for" standard when analyzing whether the employer took adverse action against DiFiore because she blew the whistle on the company. The jury returned a verdict for the defendant employer.

In deciding that the District Court's application of the "but for" standard was correct, the Third Circuit relied on the Supreme Court's opinions in two cases, Gross v. FBL Financial Services, Inc. (an ADEA age discrimination case) and University of Texas Southwestern Medical Center v. Nassar (a Title VII retaliation case). In those cases - involving two different statutory contexts involving similar statutory language - the Court analyzed the applicable statute's proscriptions against taking adverse action against an employee "because of" that employee's membership in a protected class or engagement in protected activity. In both cases, the Court decided that "because of" means . . . well . . . because. That is, but for the protected activity (in the Title VII retaliation context) or but for the employee's age (in the ADEA context), the employee would still be employed. In DiFiore, the Third Circuit concluded that the FCA's proscription against retaliation "because of" the employee's whistleblowing also served to establish a "but for" standard. Other circuits and district courts have also recently applied the "but for" standard to False Claims Act retaliation claims, either by explicitly ruling...

To continue reading