Labor & Employment Law Daily Wrap Up, WHISTLEBLOWERS—S.D. Ohio: FCA claims fail for lack of evidence of adverse action, retaliation, knowledge, (Apr 2, 2025)

By Sherri M. Schroeder, J.D.

However, the court allowed one alleged retaliatory termination of employment claim to proceed because the employer’s proffered justifications did not satisfy the “clear and reasonably specific basis” requirement and were arguably pretextual.

In a case that began more than 13 years ago, an Ohio federal court has laid to rest all but one claim for alleged post-employment retaliation resulting in wrongful termination. In 2012, two employees filed a qui tam action against their former employer, related entities, and several individuals under the False Claims Act (FCA) and its anti-retaliation provision. The United States reached a settlement agreement and recovered an undisclosed sum from the defendants in 2017 pursuant to a partial stipulation. This left only FCA retaliation claims by both employees against Tridia Hospice Care, Inc., Destiny Hospice, LLC, and Provider Services, Inc. (collectively, the “Provider Defendants”) (Count One) and an FCA retaliation claim by one of the employees against the Provider Defendants and an additional defendant, ViaQuest, Inc. (Count Two). Both employees claimed they were subject to retaliation during their employment with the Provider Defendants as a result of their efforts to stop FCA violations. For Count One, the court found that the employees failed to identify any adverse employment action resulting from their identification of the FCA violations, failed to produce evidence showing they had voiced their fraud concerns to their employer, and admitted that the Provider Defendants did not have knowledge of the qui tam action until long after they had left their jobs. As to Count Two, the court found a genuine dispute of material facts existed as to whether the alleged actions taken by ViaQuest and other entities/individuals could be imputed to the Provider Defendants; however, there was no evidence that ViaQuest knew of the employee’s protected activity of filing the qui tam action when it made the decision to fire her. Therefore, the court granted the Provider Defendants summary judgment as to Count One, but denied it as to Count Two, and granted ViaQuest summary judgment as to Count Two (Bourne v. Provider Services Holdings, No. 1:12-cv-935 (S.D. Ohio Mar. 27, 2025)).

Count One: FCA retaliation. Both employees alleged they were subject to retaliation during their employment with the Provider Defendants as a result of their efforts to stop violations of the FCA. Specifically, they claimed they discovered violations of Medicare guidelines at Destiny in 2011 where staff provided crisis care for patients who did not meet medical criteria. However, the court found they had not identified any adverse employment action that resulted from their identification of the issues because “tensions between and employer and employee are not, without more, enough to satisfy adverse employment action.” Next, the employees claimed they were retaliated against because they participated in a compliance audit conducted by a law firm (ROLF Audit) wherein a number of issues, including lack of face-to-face certifications, were uncovered and they claimed the ROFL Audit did not go far enough in uncovering the issues. However, the court found no evidence showing the employees articulated their specific concerns to their employer that Destiny was committing fraud or that their complaints about the scope of the ROLF Audit were reasonable efforts undertaken to stop FCA violations. Finally, they claimed that their employer took adverse action against them for filing the qui tam action in 2012. However, all evidence showed that they had filed the action in secret and that the Provider Defendants did not have knowledge of the action until long after the employees had left their jobs. Therefore, the court found summary judgment to be appropriate.

Count Two: FCA retaliation / ViaQuest: Here, one of the employees claimed that more than two years after she quit her job at Tridia, she began working for ViaQuest. She alleged that just after the Provider Defendants found out she had filed the qui tam action, the Provider Defendants told ViaQuest it would not send any referrals to the company so long as she was employed by ViaQuest. ViaQuest then fired her. She alleged that the Provider Defendants and ViaQuest were jointly responsible for the alleged retaliatory termination of her employment. The Provider Defendants claimed that ViaQuest’s alleged actions could not be imputed to them, but the court identified evidence creating a material dispute as to this point. Evidence mentioned by the court included deposition testimony, a seller-financed sale agreement with a buy-back option, Provider Defendants referring to ViaQuest-related entities as “my nursing homes” or “us” and “we,” and calling a building a “Provider’ building,” which all supported a reasonable inference that the Provider Defendants and ViaQuest were involved enough to cast “serious doubt” on the Provider Defendants’ assertion that ViaQuest’s actions could not be imputed to them. The court then found that the Provider Defendants’ proffered legitimate, non-retaliatory reasons for refusing to do business with the employee (trying to reduce the number of companies with which it did business and a personal issue with the employee’s “entitled attitude”) did not categorically satisfy the requirement of a clear and reasonably specific basis for taking the alleged retaliatory action and were, arguably, pretextual. Therefore, the court denied summary judgment as to the Provider Defendants.

However, the court found that there was no evidence that ViaQuest had knowledge of the employee’s protected activity before it fired her, even if it did so because of the call from the Provider Defendants. The employee could offer no direct evidence to rebut that assertion. According to the court, the employee’s “decision that she needed to divulge this information in the mere seconds before she was fired is strong evidence that she did not believe [ViaQuest] was aware of her protected activity before the moment of her termination.” Therefore, the court granted summary judgment in favor of ViaQuest.

The case is No. 1:12-cv-935.

Judge: Hopkins, J.

Attorneys: Chandra Napora (Morgan Verkamp) for Paula Bourne and La'Tasha Goodwin. Aric Doyle Martin (Rolf Goffman Martin Lang) for Provider Services, Inc. a/k/a BCFL Holdings, Inc. n/k/a Foundations Health Solutions, Inc., Tridia Hospice Care, Inc. and Destiny Hospice, LLC.

Companies: Provider Services, Inc.; BCFL Holdings, Inc.; Foundations Health Solutions, Inc.; Tridia Hospice Care, Inc.; Destiny Hospice, LLC

Cases: Whistleblowers Discharge Retaliation OhioNews