Health Law Daily Wrap Up, FALSE CLAIMS ACT—3d. Cir.: ‘Other efforts’ prong of FCA’s anti-retaliation provision required objectively reasonable belief that the employer violated FCA, (Aug 7, 2026)

By Jeffrey H. Brochin, J.D.

Allegations that Olympus violated FDA standards in design and resting of medical device did not satisfy the requirement that the employee’s actions were motivated by objectively reasonable belief that the Olympus had submitted, or would submit, false or fraudulent claims for payment to the federal government.

The United States Court of Appeals for the Third Circuit has affirmed the ruling of the District Court which dismissed an Employee’s FCA retaliation claim. The District Court concluded that the Employee failed to allege that he had engaged in protected conduct under the “other efforts” prong of the FCA’s anti-retaliation provision because his allegations merely pointed to FDA standards violations as to the medical device sold to the federal government, and did not meet the test for “other efforts” protected conduct (Lisenby v. Olympus Corp. of the Americas, No. 25-1480 (3d. Cir. Aug. 4, 2026)).

Concerns over FDA compliance. The employee worked as Global Head of Product Development for Olympus Corporation of the Americas, a subsidiary of a Japanese medical device company. Olympus sells medical devices to the United States government and receives millions of dollars in federal awards every year. Over a two-week period, the employee raised concerns that Olympus had violated U.S. Food and Drug Administration (FDA) regulations with respect to design quality and product testing. He first raised his concerns with the Global Head of Olympus’s Therapeutic Solutions Division, informing her of Olympus’s ‘systemic failures to comply with FDA testing and regulatory standards in its product development process and inadequate training of engineers to follow FDA regulatory and testing standards.’ He also shared his “serious concerns” about “Olympus’ medical devices that had already been launched in the market that did not comply with FDA regulatory standards and had been shown to cause patient harm.”

Throughout his various meetings, he called on Olympus to adopt a design methodology called Design for Six Sigma (DFSS), noting that quality and compliance issues existed in Japan, Europe, and the United States, and he suggested that Olympus could use DFSS to address those systemic issues in product design procedure. A few days later, he discussed the same concerns and suggestions with the Vice President and General Manager of the GI Endo-Therapy Business Unit, and, finally with the Senior Vice President of Regulatory Affairs. The day after meeting with the Senior Vice President of Regulatory Affairs, he was informed that his position had been eliminated, and he filed suit against Olympus asserting a retaliation claim under the False Claims Act.

Retaliation claim dismissal. Congress’s 2009–2010 amendments to the FCA expanded the scope of the FCA’s anti-retaliation provision to include “other efforts” by an employee to stop violations of the Act by an employer. It is the “other efforts” prong that the District Court relied upon in determining whether the Employee had engaged in protected conduct under the “other efforts” prong of the FCA’s anti-retaliation provision. The District Court noted that the circuit has not yet considered what constitutes protected conduct under the “other efforts” prong of the FCA’s anti-retaliation provision, and therefore concluded that an employee “must demonstrate a nexus between his actions and that his employer knowingly submitted or planned to submit a false or fraudulent claim to the government for payment.” Because the employee did not connect his internal warnings about Olympus’s alleged FDA regulatory violations to a specific FCA violation, the District Court held that he had not sufficiently alleged protected conduct, and they therefore dismissed his retaliation claim with prejudice. The instant appeal then ensued.

Two questions of first impression. The Appeals Court began its review by noting that there were two questions of first impression before them: whether a retaliation claim under the False Claims Act, 31 U.S.C. § 3730(h), is subject to the particularity requirement of Federal Rule of Civil Procedure 9(b); and what constitutes protected conduct under the “other efforts” prong of a False Claims Act retaliation claim. As to the first question, the Appeals Court held that a False Claims Act retaliation claim is not subject to the Rule 9(b) particularity requirement, rather, the employee need only satisfy Rule 8(a)’s notice pleading standard.

As to what constitutes protected conduct under the “other efforts” prong of a False Claims Act retaliation claim, the Appeals Court held that to engage in protected “other efforts” conduct under § 3730(h)(1), the employee must have held an objectively reasonable belief that his or her employer was violating--or was about to violate--the FCA. Applying the proper standard here, the Amended Complaint failed to allege that the employee engaged in conduct protected by the “other efforts” prong of § 3730(h)(1) as described below.

Only ‘FDA violations’ alleged. The Appeals Court proceeded to analyze the facts in the Amended Complaint which the employee claimed demonstrated his belief that Olympus had committed, or would commit, fraud on the government. Those facts included that Olympus is a federal contractor; Olympus sells its medical devices to hospitals for use in medical procedures covered by Medicare and Medicaid; that the employee discovered systemic deficiencies in Olympus’s design approach and quality management system that resulted in violations of FDA regulations; that Olympus had already sold noncompliant products; and that the employee reported his concerns to others, providing examples of already-sold products that did not conform to FDA regulations.

Yet the Appeals Court found that those allegations suggested only that he was concerned about Olympus’s alleged FDA regulatory violations and the attendant risks to patient safety, and not fraud committed against the government. For example, the Amended Complaint alleged that he “raised concerns regarding design quality and non-compliant product testing issues required by FDA regulations” during the CTO meetings, and, that his concerns focused on “a lack of product safety,” “FDA compliance issues,” and “patient safety risks.” But at no point did the Amended Complaint connect concerns about FDA regulatory violations and safety risks to a belief that Olympus was submitting false claims for payment to the federal government. Although the employee’s actions did not need to lead to a viable FCA action, they still needed to have a nexus to an FCA violation, and in the absence of such nexus, he was not deemed to have engaged in protected conduct under the “other efforts” prong if his actions pertain only to.

Of the anti-retaliation provisions.

Based on the foregoing, the Appeals Court affirmed the dismissal with prejudice of the employee’s Amended Complaint.

The case is No. 25-1480.

Judge: Chagares, M.

Attorneys: Christine T. Elzer (Elzer Law Firm, LLC) for Paul Lisenby. Ben Gifford (Paul Hastings LLP) for Olympus Corp. of the Americas, Olympus America Inc. and Gyrus ACMI Inc.

Companies: Olympus Corp. of the Americas; Olympus America Inc.; Gyrus ACMI Inc.

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