Waive Whistleblowers Away

Signed waivers are one of the best ways to avoid turning departed personnel into whistleblowers who report a home care company’s alleged wrongdoings to the government. A signed waiver is a document in which a departing employee agrees to waive all of his or her legal rights against the employer in exchange for certain severance benefits.

Benefits might include continued salary, one-time severance pay, continued health benefits for a period of time, pension vesting for the current year, etc. The point of the waiver is to arm the home care company with something contractual to use for fighting back when confronted with a whistleblower claim by a terminated employee.

Waivers are certainly not without controversy, and home care companies can learn valuable lessons from existing federal law. The “Older Workers Benefit Protection Act” addresses specific requirements for waivers:

• The employee must be given no less than 21 days to consider whether to sign the waiver. Of course, severance benefits can be put “on hold” during this period.
• The employee should be encouraged to consult with counsel regarding the waiver.
• The employee has a period of not less than seven days to revoke his or her acceptance of the waiver.
• The waiver should specify the employment-related legal rights being waived by the employee.

The waiver should additionally include language providing the employer with a general waiver of all of the employee’s legal rights against the employer, ‘whether arising under federal or state statute, common law, regulation or local ordinance.” While there may be other statutory requirements depending on the circumstances of the termination, these principles can serve us well as a background to address waivers in the context of health care fraud and abuse exposures.

Here are a few benefits from utilizing this strategy of waivers. First, the waiver is seen by the employee and the employer as a “deal” regarding the employee’s smooth exit. The psychological perception of the “deal” is important. Second, if the provider has conditioned severance on whether the waiver is signed — if, for instance, company policy provides no severance unless the waiver is executed and not revoked — the employee has incentive to sign the waiver and sign it quickly. Third, because employees at all levels of the company are required to sign waivers to receive severance, the program has the perception of even-handedness.

Finally, under the terms of the waiver, if the employee later sues for any reason, he or she is liable to the company for the full amount of the payment made under the waiver. The practical effect of this provision is to give the company a counterclaim against the employee that can later be traded in negotiations with the employee.

There are also practical downsides and issues. First, if the compliance program is seen as a joke at worst or ineffective at best, the waiver may be perceived in certain company cultures as simply a way to shut people up while threatening their “right” to severance. Second, just because the waiver might not specify that the employee is waiving claims under the False Claims Act does not mean that the employees won’t notice the omission.

Third, employees may just stay in their jobs and file their whistleblower actions. If the provider moves against the employee who stays in his or her job for filing the qui tam, the employee may have additional claims against the company for retaliation under federal employment and whistleblower laws.

Finally, since the Older Workers Benefits Protection Act requires that the waiver advise the employee to consult with counsel, perhaps anti-fraud waivers could result in more and not less claims or threats of claims. If the employee actually consults counsel, he or she may see False Claims Act opportunities they would not otherwise consider.

Neil Caesar is president of the Health Law Center (Neil B. Caesar Law Associates, PA), a national health law practice in Greenville, S.C. He also is a principal with Caesar Cohen Ltd., which offers compliance training, outsourcing and consulting and the author of the Home Care Compliance Answer Book. He can be reached by e-mail at [email protected] or by telephone at 864/676-9075.