What is a qui tam lawsuit for employees?

A qui tam lawsuit is a special kind of whistleblower case where you—a regular employee or contractor—can sue on behalf of the federal government when your employer is defrauding taxpayers. If you win, you can get a percentage of what the government recovers, usually between 15% and 30%. It comes from an old Latin phrase meaning "who sues on behalf of the king as well as for himself."

The law that makes this possible is called the False Claims Act, and it's designed to catch companies ripping off Medicare, defense contracts, federal grants, or any program funded by tax dollars. You don't need the government's permission to file. You file under seal, the government investigates, and then decides whether to join your case or let you proceed on your own.

The real case: In re Natural Gas Royalties Qui Tam Litigation

In re Natural Gas Royalties Qui Tam Litigation was a massive set of whistleblower lawsuits filed by individuals who believed energy companies were underpaying royalties on natural gas extracted from federal and tribal lands. The whistleblowers—called "relators" in qui tam cases—claimed the companies used bad measurement techniques to short the government on what they owed. The Tenth Circuit Court of Appeals heard appeals from 19 consolidated cases in 2017, all raising similar questions about whether the relators' claims were valid under the False Claims Act.

The companies fought back hard, arguing the relators didn't have firsthand knowledge of fraud and that some claims were barred by the "public disclosure" rule—a provision that prevents you from filing a qui tam suit based on information already out in the world unless you were the "original source."

What the court actually said

The Tenth Circuit spent a lot of time sorting through which claims could move forward. The court clarified that to bring a qui tam case, you need to show the defendant knowingly submitted (or caused someone to submit) a false claim for government money. The relators here argued the companies' royalty reports were the false claims. The court also wrestled with whether the relators' information was already "publicly disclosed" through prior lawsuits, government reports, or news coverage—which would kill their cases unless they had direct, independent knowledge.

On the public disclosure issue, the court said that even if some fraud details were out there, a relator can still proceed if they're the "original source"—meaning they had knowledge before the public disclosure and voluntarily gave it to the government. The court sent several of the cases back to the lower court to figure out whether each relator actually qualified. The takeaway: you can't just read about fraud in the newspaper and file a qui tam suit, but if you saw it happen at your job and reported it yourself, you're likely protected.

What this might mean for you

If you work somewhere that bills the federal government—hospitals, defense contractors, research labs, construction firms with federal contracts—and you see someone cooking the books, qui tam law might apply. The Natural Gas Royalties case shows courts take these lawsuits seriously but also scrutinize whether you truly have inside information or are just repeating what's already public.

Qui tam cases are complex and take years. The government can take over your case (which is often good—it means they believe you), or you can go it alone with a lawyer. You're also protected from retaliation under the False Claims Act, meaning your employer can't legally fire you for filing or helping with a qui tam case.

This isn't a quick fix, and the courts will examine every detail of what you knew and when. But if you have real, firsthand knowledge of fraud against taxpayers, the law gives you a path to do something about it—and potentially recover money for yourself in the process.

Frequently asked questions

Do I have to be a current employee to file a qui tam lawsuit?

No. The Natural Gas Royalties case included relators who were former employees, contractors, and even industry insiders who'd moved on. What matters is whether you have direct knowledge of the fraud, not whether you still work there. You do need to act reasonably quickly, though—there are time limits.

Can I get fired for filing a qui tam case?

The False Claims Act includes anti-retaliation protections. If your employer fires, demotes, or harasses you because you filed a qui tam suit or investigated fraud to bring a case, you can sue them separately for retaliation. Courts have awarded back pay, reinstatement, and damages in those situations. That said, retaliation cases are fact-intensive—what happened and why matters a lot.

What if someone else already filed a qui tam case about the same fraud?

Generally, the first person to file gets to be the relator. The False Claims Act has a "first to file" rule, so if another whistleblower beat you to the courthouse, your case will likely be dismissed even if you discovered the fraud independently. The Natural Gas Royalties litigation dealt with this issue across multiple relators. Timing matters, which is one reason talking to a lawyer early is important.