Let the Good Times Roll – Wage and Hour Qui Tam Actions

“Laissez les bons temps rouler.”

--A Cajun expression 

One of the more interesting developments in the wage and hour world has been the immergence of so-called qui tam private causes of action to enforce wage laws that are otherwise committed exclusively to the U.S. Department of Labor (“DOL”) to enforce. The Davis-Bacon Act has long been a source of these qui tam actions as the unions look for tools to keep nonunion contractors in check and to limit unfair competition. Union affiliated groups have poured over certified payrolls and other data looking for nonunion contractors who are cheating on wages and hour fringe benefits. But the Service Contract Act (“SCA”) has been a less obvious source of litigation given the absence of any certified payroll requirement which thus makes it harder to find a material misrepresentation by the contractor of its compliance status.

Typically, these SCA-related qui tam suits are bought not by unions but by disgruntled former executives of the service corporation who know where the bodies are buried. Yes, fire you higher level management employees, and then find out that they use their knowledge of the company’s noncompliance to bring aa qui tam suit. These “qui tam relators” as they are called, can recover anywhere between 10% and 25% of the costs of any fraudulent conduct they bring to light.

I was involved in such a qui tam suit as an expert witness on SCA compliance. The former company executive had been laid off and found his way to the private bar and initiated his action in the name of the United States. The Department of Justice (“DOJ”) took over the case.  Eventually, after the US District Cout refused to dismiss the case and a settlement was reached with DOL. The relator then got a large piece of the settlement as his whistle blower reward.

I had another qui tam case where the company in-house counsel settled with the relator and his law firm before the suit was initiated. After I was consulted, I didn’t think there was any bona fide cause of action. Nor was DOJ happy about the settlement which paid the Government nothing. We initiated suit to get the monies back and DOJ joined us. The relator and his law firm ended up being ordered by the court to pay the $250,000 or so settlement monies back to the company. I thought I had literally pulled a rabbit out of my hat in that case.

As an illustration that not every potential qui tam relator can initiate a suit, there is the recent case of an employee who was tasked by the company CEO to audit the company’s SCA compliance, who found that the company was not compliant, and who allegedly was fired after repeatedly rebuking the CEO for the allegedly knowing noncompliance, could not bring a qui tam action, because conducting the audit became part of his normal duties once the CEO instructed him to conduct it. See U.S. ex rel. Irizarry v. Innovative Technologies, Inc., 2025 WL 2298711 (D.D.C. 2025).

Anyhow, if you think you have a wage and hour related qui tam action, give me a call. And if you need an expert witness, well that is right up my ally. And I can represent relators as well as defendants. Let the good times roll.