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Hargrove's State Bar of Texas article for the 2011 Advanced Labor and Employment Law Course

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Whistleblowers in the Age of Stimulus

Chapter 9

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Whistleblowers in the Age of Stimulus

Dan Hargrove Hargrove & Rea, P.C. Historic One Ten Broadway 110 Broadway, Suite 550 San Antonio, Texas 78205 (210) 223-9700 dh@hargroverea.com www.Govtfraudlawyer.com

State Bar of Texas Advanced Employment Law Course 2011 January 13-14, 2011 Austin, Texas CHAPTER 9" !"

Whistleblowers in the Age of Stimulus

Chapter 9

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DAN HARGROVEMr. Hargrove represents businesses and individuals in matters involving federal government contracts, the FALSE CLAIMS ACT (qui tam), whistleblower actions, and health care fraud. Mr. Hargrove was named The 2004 San Antonio Young Lawyer of the Year by the San Antonio Young Lawyers Association, a Rising Star for 2004 & 2005 by TEXAS MONTHLY, and has been named as one of San Antonios best employment attorneys by SCENE IN SA MONTHLY.PROFESSIONAL AFFILIATIONS Admitted: Supreme Court of the United States U.S. Court of Appeals, Fifth Circuit All U.S. District Courts in Texas Court of Federal Claims Court of Appeals for the Armed Forces All Texas courts Organizations: Taxpayers Against Fraud Federal Bar Association (San Antonio chapter Board Member) Society of American Military Engineers (Board Member) Southwest Foundation for Biomedical Research, Founders Council Reserve Officers Association San Antonio Trial Lawyers Association

PRACTICE AREAS

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FALSE CLAIMS ACT (qui tam) Health Care Fraud Federal Government Contracts Whistleblower Actions

BACKGROUND Mr. Hargrove focuses his practice on the FALSE CLAIMS ACT (whistleblower and qui tam litigation), federal government contracts, and health care fraud. Before forming Hargrove & Rea, P.C., Mr. Hargrove practiced with Jenkens & Gilchrist, P.C. and served for six years on active duty with the U.S. Army JAG Corps (10th Mountain Division (Light Infantry) and the 82nd Airborne Division) and deployed to the Middle East. He continues to serve in the Army Reserves, with the rank of Lieutenant Colonel, and is an Assistant Professor of Law at the U.S. Army JAG School. EDUCATION ! ! ! ! U.S. Army JAG School, LL.M. (Federal Procurement Law) 2003 St. Marys University School of Law, J.D. 1994 Texas A&M University, B.S. 1991 (Honors Program; Corps of Cadets; ROTC Scholarship) Rotary International Exchange Student (Sweden) 1986

NOTABLE PUBLICATION Daniel L. Hargrove, Soldiers of Qui Tam FortuneAre Servicemembers Proper Plaintiffs Under the False Claims Act, 34 GEORGE WASH. U. SCHOOL OF LAW PUBLIC CONTRACT LAW JOURNAL 45 (2004) CONTACT INFORMATION Hargrove & Rea, PC Historic One Ten Broadway, Suite 550 San Antonio, Texas 78205 (210) 223-9700 (o) (210) 223-9708 (f) dh@hargroverea.com www.govtfraudlawyer.com www.govtfraudlawyer.blogspot.com

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Whistleblowers in the Age of Stimulus

Chapter 9

! TABLE OF CONTENTS I. INTRODUCTION ............................................................................................................................................1 II. THE DODD-FRANK ACT OF 2010 ..............................................................................................................2 A. Overview of the DODD-FRANK ACTS Bounty Programs and Protections for Whistleblowers Against Reprisal ..........................................................................................................2 B. The SEC Whistleblower (Bounty) Incentive Program ............................................................................2 1. Introduction to the SEC Incentive Program (Section 922) ...........................................................2 2. Who may File an SEC Bounty Claim ...........................................................................................3 3. Who is Precluded from being Paid an Award...............................................................................4 4. Statute of Limitations to File a Bounty Claim ..............................................................................4 5. The SECs Administrative Process...............................................................................................4 6. No Right to Judicially Appeal an SEC Bounty Determination ....................................................4 C. New Reprisal Cause of Action for SEC Whistleblowers that can be Filed in U.S. District Court (no exhaustion of administrative remedies required)...........................................5 D. Resources DODD-FRANK ACTS SEC Bounty Programs and Protections for Whistleblowers Against Reprisal ............................................................................................................6 E. The Commodity Futures Trading Commission Whistleblower Bounty Program and Anti-Reprisal Protections for Whistleblowers ........................................................................................6 1. Introduction to the CFTC Incentive (Bounty) Program (Section 748).........................................7 2. Who may File a CFTC Bounty Claim ..........................................................................................7 3. Who is Precluded from being Paid a CFTC Bounty Claim ..........................................................8 4. Statute of Limitations....................................................................................................................8 5. The CFTC Administrative Process ...............................................................................................8 6. Whistleblower can Judicially Appeal the Commissions Bounty Determination ........................9 F. New Reprisal Cause of Action for CFTC Whistleblowers ......................................................................9 1. Whistleblowers Protected Against Reprisal (no exhaustion of administrative remedies required) .......................................................................................................................9 2. Arbitration Agreements Void .......................................................................................................9 G. Resources DODD-FRANK ACTS CFTC Bounty Programs and Protections for Whistleblowers Against Reprisal ............................................................................................................9 H. New Reprisal Cause of Action for Whistleblowers in the Financial Services Industry (Section 1059 of the Dodd-Frank Act)..................................................................................................10 1. Introduction to Section 1057 of the DODD-FRANK ACT.............................................................10 2. Who is Covered...........................................................................................................................10 a. Emlpoyee .........................................................................................................................10 b. Employer .........................................................................................................................10 3. What is Protected ........................................................................................................................10 4. The Process (employee must exhaust administrative remedies before filing lawsuit) ...............10 a. Administrative .................................................................................................................11 b. Judicial ............................................................................................................................11 c. Burden of Proof ...............................................................................................................11 5. Remedies.....................................................................................................................................11 6. Arbitration Agreements Void .....................................................................................................11 I. Strengthening the SARBANES-OXLEY ACTS Whistleblower Protections ..............................................11 1. Introduction to the Existing SOX Whistleblower Protections....................................................11 2. Sections 922 and 929A of the DODD-FRANK ACT clarify the SOX

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Whistleblowers in the Age of Stimulus

Chapter 9

! Whistleblower Claim ......................................................................................................................12 III. THE PATIENT PROTECTION AND AFFORDABLE CARE ACT OF 2009 ..........................................12 A. Overview of the HEALTH CARE ACT ....................................................................................................12 B. Section 1558 Protections for Whistleblowers ....................................................................................12 1. Introduction to Section 1558 - Scope of Coverage and Protections ...........................................12 2. Procedure and Limitations ..........................................................................................................13 3. Remedies.....................................................................................................................................13 4. Arbitration Agreements Void .....................................................................................................13 C. Reporting Requirements for Federally Funded Long-Term Care Facilities The ELDER JUSTICE ACT .......................................................................................................................13 1. Timing.........................................................................................................................................13 2. Penalties ......................................................................