The Dos and Don’ts of Obtaining and Disclosing Company Documents when Filing a Whistleblower Case

Under the False Claims Act, whistleblowers are required to provide the government with “substantially all material evidence and information” in their possession upon filing a qui tam lawsuit.  This assists the government in performing an early analysis of the merits of the case.  As one would expect, the more compelling evidence of wrongdoing a whistleblower provides to the government, the more likely it is that the case will be successful.

A practical issue confronting whistleblowers who witness fraud by their employer is whether the whistleblower is permitted to gather workplace documents and electronic evidence of the fraud.  Many whistleblowers are still employed by the defendant when they blow the whistle, and they have access to this evidence.  So the question arises: May a whistleblower disclose otherwise confidential business information to his attorney and to the government?

Many defendants accused of defrauding the government believe their best defense is a good offense.  And that “offense” often consists of attacking the whistleblower.  Defendants frequently try to turn the tables on the whistleblower–and in the meantime shift the focus of the case away from their own fraudulent conduct–by accusing the whistleblower of “stealing” company documents and information.  Some even resort to suing the whistleblower once they learn of the lawsuit.

It is true that employees generally owe a duty of loyalty to their employers to keep proprietary business information confidential.  Fortunately, courts have recognized that there is an exception to this duty that permits an employee to gather and retain evidence when the employee has a good faith reason to believe his employer is engaged in fraudulent or illegal conduct.

Whistleblowers must be careful, however, in obtaining evidence to provide to the government.  Some general guidelines have developed over the years concerning to what extent an employee may gather evidence of fraud from his employer.

Whistleblowers should generally avoid obtaining and disclosing any of the following:

Privileged documents.  Communications between a client and his lawyers are considered privileged.  That means those communications are confidential and cannot be used as evidence.  (There are some exceptions to this privilege, such as when the privileged communications are used in furtherance of committing a crime or perpetrating a fraud.)  If the employer asks a lawyer for legal advice, or if the lawyer provides legal advice to the employer, those communications are privileged.  Even if a whistleblower has access to privileged communications in the regular course of his job, the whistleblower generally should not disclose those privileged communications to his lawyer or to the government.  Such a disclosure could torpedo the whistleblower’s case.

Documents and evidence accessed without authority.  Many times whistleblowers, by virtue of their position within a company, have the means to access all sorts of information even though the information is not generally available to them or used by them in the normal course of their job.  Rooting around in files or databases that are outside the scope of the employee’s ordinary duties can lead to problems for the whistleblower and possibly hurt his case.

Random documents and evidence.  A whistleblower is not doing himself any favors by downloading or copying massive amounts of data or documents that have nothing to do with the fraud.  The government wants quality, not quantity, and won’t be impressed simply because a whistleblower shows he is capable of accessing the employer’s databases or document files.

Recorded conversations.  Obviously a recorded conversation where an employee or even officer of a company makes incriminating statements can be a smoking gun.  However, many states (including Florida) do not permit conversations to be recorded unless everyone participating in the conversation consents to the recording.  This applies to phone calls as well as face-to-face conversations.

Whistleblowers should talk to an experienced qui tam lawyer before recording anything or the whistleblower runs a risk of ruining his potential case by illegally obtaining evidence, not to mention the risk of committing a crime.  In some qui tam cases, the government will “wire” a whistleblower who is still employed by the defendant in order to capture spoken evidence of the fraud.  But that is completely different—the government can do certain things that Joe Citizen cannot.  The Reporters Committee for the Freedom of the Press has a helpful overview of the various laws in this area at their website.

Gathering workplace evidence is an important part of successfully prosecuting a qui tam lawsuit, but it is also a potential minefield for whistleblowers.  Anyone who suspects that their employer is committing fraud against the government should promptly seek the advice of a lawyer experienced in qui tam litigation under the False Claims Act before taking any steps that could compromise their case and lead to legal troubles.