The Georgia False Claims Act
The Georgia legislature recently passed the Georgia Taxpayer Protection False Claims Act which allows private citizens (known as “relators” or “qui tam plaintiffs”) to file a lawsuit against individuals or businesses that defraud Georgia state and local governments. In return for bringing the fraud to light, the relator can recover anywhere from 15 to 30 percent of whatever the state or local government recovers. This is a matter of interest to building and construction trades unions, and also to unions which represent public sector employees in Georgia.
Set forth below are seven examples of conduct that would be in violation of the Georgia False Claims Act. In each example, the wrong-doer is acting with knowledge of the fraud. There is no violation for honest mistakes.
Example 1: a contractor that has a contract with the Georgia state government presents an inflated bill to the government for payment.
It is a violation of the Act to knowingly present or cause to be presented a false or fraudulent claim for payment or approval.
Example 2: a highway contractor agrees to use certain ingredients in mixing asphalt, but the contractor cuts corners and uses cheaper ingredients; then the contractor falsifies invoices to suggest that he purchased the correct materials.
This conduct would be a violation of the Act because contractor is knowingly making a false statement about the materials being used in connection with a false claim.
Example 3: a general contractor that knows its subcontractor is violating the terms of a contract, but falsely submits a compliance certification to the state government to obtain payment of an invoice.
Conspiracy is a separate claim under the Georgia false claims act. In this example, both the general contractor and subcontractor may have liability for conspiracy.
Example 4: a delivery driver has 20 computers to be delivered to Georgia state government offices, but the driver keeps two of the computers and delivers only 18 computers.
If a person has possession of money or property to be used by state or local governments, but knowingly delivers less than all of the money or property, it is a violation of the act. This prohibition can also apply where a defendant delivers inferior goods that do not meet the standards agreed upon in the contract.
Example 5: a technical contractor hired to set up a local school board computing network hires a subcontractor to deliver an install 75 printers; the contractor knows that the subcontractor only delivered 70 printers but fails to take any action.
The contractor can be held liable in this situation because, under the Act, a contractor cannot deliberately look the other way while its subcontractor delivers fewer goods than required under the contract.
Example 6: a local government purchases new tools for its maintenance employees. The maintenance superintendent keeps his old tools, and sells the new tools to his brother. The brother is aware that the tools belong to the local government.
The brother could be held liable for the unauthorized purchase of government property from an officer or employee of the state or local government.
Example 7: a highway construction project takes fewer man-hours to complete than initially estimated, but the government makes a payment based on the initial estimate resulting in an overpayment. The contractor then falsifies the records of man-hours worked so that it appears that the government has not made an overpayment.
This is known as a “reverse false claim” and liability results from avoiding payment owed to a state or local government. A reverse false claim usually occurs when there is an overpayment for goods or services and a false statement is made to hide the overpayment.
What to do if you see fraud against Georgia state or local governments:
Consult Legal Counsel: Experienced attorneys can help you determine whether there is a valid claim under the false claims act before you “blow the whistle”. If you have a valid claim, legal counsel can also guide you through the process of filing an action as a relator, which requires the approval of the Georgia Attorney General.
Act Fast: Speak with legal counsel as soon as possible. Once any fraud is publicly disclosed or another individual brings a claim as a relator, you lose your claim.
Protect Yourself from Retaliation: The Act provides protection for any retaliation that the employee suffers as a result of bringing a claim under the Georgia False Claims Act. If you suffer retaliation, you have three years to sue for reinstatement, double back pay, interest on back pay, and compensation for any special damages sustained as a result of the litigation including litigation costs and reasonable attorney’s fees. You will want to keep detailed records of any retaliation suffered to aide in bringing such a claim.
Update on Alabama and Georgia Immigration Laws
On June 9, 2011, Gov. Robert Bentley signed The Beason-Hammon Alabama Taxpayer and Citizen Protection Act (Act 2011-535) into law, calling the legislation the toughest illegal immigration law in the nation. After its enactment, the Alabama immigration law was challenged in two separate lawsuits, one brought by the United States government and one brought by a group of private plaintiffs. As a result of these legal challenges, many of the provisions in the act affecting both unions and workers have been enjoined by federal courts. The injunctions mean that the following provisions will not be enforced while the injunction is in effect:
Provisions that have been enjoined by the federal courts :
- Section 11: Provision making it a misdemeanor crime for an unauthorized alien to apply for, solicit or perform work in the State of Alabama.
- Section 16: Provision forbidding employers from claiming as a tax deduction any wages paid to an unauthorized alien.
- Section 17: Provision stating that an employer discriminates against United States citizens or authorized aliens by failing to hire them while retaining or hiring an unauthorized alien.
- Section 27: Provision stating that no contract entered into by an undocumented immigrant is enforceable if the other party had knowledge.
While many portions of the act have been enjoined, other provisions affecting Unions and employers remain intact and are currently in force. Unions need to be aware of these specific provisions in the Alabama immigration act.
Employment Requirements under the Alabama Immigration Law
The Act prohibits employers from knowingly hiring or employing an unauthorized alien to perform work in the State of Alabama. This provision would encompass unions that have employees.
Penalties for hiring unauthorized aliens include suspension of business license for a time period and additional reporting requirements for the business during a three year probationary period. The penalty for a second violation is the complete revocation of all business licenses for the locations where the violation occurred. The penalty for a third violation is complete suspension of all business licenses throughout the state of Alabama.
E-Verify Requirements under the Alabama Immigration Law
E-Verify is a free program that allows businesses to determine the eligibility of their employees to work in the United States. The act requires that all employers register and use E-Verify no later than April 1, 2012. In addition, to be awarded any contract, incentive or grant from the state, a business must establish that it is enrolled in the E-verify program. To comply with these provisions, Unions, as employers, must register and use E-Verify. Unions employing less than 25 employees can register to use E-Verify through the Alabama Department of Homeland Security (ADHS) website. More information can be found on the ADHS website: http://immigration.alabama.gov/eVerify.aspx
Unions (as employers) that register and use E-Verify obtain the “safe harbor” under the act. An employer cannot be held liable under Alabama law for employing an unauthorized alien if the employer used E-Verify to determine the employee’s eligibility to work in the United States.
It is important to remember, however, that the E-Verify system is not a substitute for the federal Form I-9 process. Employers must continue to complete and maintain I-9 forms as already required.
The Georgia Immigration Law: which provisions affecting worker’s rights and unions have been overturned and which provisions remain?
In April 2011, Georgia’s immigration law, the Illegal Immigration Reform and Enforcement Act of 2011 (H.B. 87), was signed into law. Like the Alabama law, the Georgia law was also challenged by a group of private individuals and organizations. Specifically, Sections 7 and 8 of the Act were challenged.
Section 7 of the Act codified three separate crimes for interacting with an “illegal alien” as that term is defined by the act. Under this provision, it is a crime to (1) transport or move an illegal alien, (2) conceal or harbor an illegal alien, and (3) induce an illegal alien to enter into the state of Georgia. This section was enjoined and will therefore not be enforced as long as the injunction is in place.
Section 8 of the Act authorizes Georgia law enforcement officers to investigate the immigration status of an individual if an officer has probable cause to believe the individual has committed another crime and the individual cannot provide one of the pieces of identification listed in the statute. Ahtough the trial court enjoined this Section, the Eleventh Circuit Court of Appeals reversed the trial court’s injunction. Therefore, Section 8 is in force.
Workers and Unions need to be aware of other provisions of the Georgia Immigration Act that have not been challenged and are therefore in force.
Employment Requirements under the Georgia Immigration Law
Unlike the Alabama immigration law, the Georgia Act does not contain a provision penalizing private employers for hiring or employing an unauthorized alien (although this would still be a violation of federal law). The Georgia Act does, however, criminalize workers that use false identification to obtain employment. Under Section 4 of the act, a worker using such false identification is subject to imprisonment from one to fourteen years and/or a fine of up to $25,000. Because workers likely need to present some kind of documentation to apply for or receive work, unauthorized aliens in Georgia have a choice of either not working at all or of working but risking jail time or large fines.
Lastly, businesses with state contracts are penalized for hiring undocumented workers under the Georgia Act. Under Section 3 of the Act, any such employer would be prohibited from bidding or entering into any public contract for 12 months.
E-Verify Requirements under the Georgia Immigration Law
Section 3 of Georgia H.B. 87 sets out new rules for verification of eligibility for public work. State and local governments must participate in the E-Verify program for newly hired employees. Contractors, subcontractors, and sub-subcontractors who apply or bid for public work must submit signed, notarized affidavits that they will use the program. The state government may conduct random audits of public employers and contractors or specific audits on “reasonable grounds to suspect a violation,” but the Act does not set forth what constitutes reasonable grounds. Convictions for knowing and willful false, fictitious, or fraudulent statements can result in being placed on a no-bid list for 12 months.
Section 12 of the act requires every private employer with more than ten employees to register and utilize the E-Verify program. The effective dates for this section are as follows:
- January 1, 2012, as to employers with 500 or more employees
- July 1, 2012, as to employers with 100 or more employees but fewer than 500 employees
- July 1, 2013, as to employers with more than ten employees but fewer than 100 employees
In addition, to obtain any sort of business license, a business entity must provide proof that it is enrolled in the E-Verify program, or it must provide proof that it is exempt from the requirement. To assist private businesses in complying with the provisions of Section 12, the Attorney General of the State of Georgia created a standardized form affidavit which may be used as acceptable evidence demonstrating use of the E-Verify program or that employer has less than ten or fewer employees and is exempt.
This form affidavit can be found at the following link:
Firm Successfully Defends Union Client Against Right to Work Identity Theft Claim
On August 16, 2011 the North Carolina Court of Appeals unanimously affirmed a favorable ruling from the North Carolina Business Court in a case brought by the National Right to Work Committee on behalf of sixteen individuals who alleged that they had been subjected to identity theft by a union. The case arose after the sixteen plaintiffs resigned their union membership in 2007. A clerical employee of the international union responsible for processing dues sent a list of employees who had resigned their membership (which included the employees’ Social Security numbers) to a staff representative with instructions to inform the local unions whose members had resigned. A local union officer who received the list posted it on a local union bulletin board for informational purposes. The sixteen individuals sued the international union and local union affiliate under the North Carolina Identity Theft Protection Act (ITPA) and the North Carolina Unfair & Deceptive Trade Practices Act (UDTPA), and for invasion of privacy. The unions moved to dismiss the case at the outset, and the Business Court dismissed the invasion of privacy claim for failure to state a claim under North Carolina tort law. The Business Court permitted the ITPA and UDTPA claims to proceed, however. Following discovery the unions moved for summary judgment. On behalf of its international union client, the Quinn, Connor, Weaver, Davies & Rouco LLP attorneys argued that the individuals had failed to state a claim under either the ITPA or UDTPA, and that any claims arising from the individuals’ resignation of their membership and subsequent disclosure of information about them by a union was preempted by federal law. In a May 7, 2010 ruling, the North Carolina Business Court granted the unions’ motions for summary judgment and dismissed the case. The Business Court ruled that the claims made by the Right to Work Committee attorneys on behalf of the non-members were governed by the federal National Labor Relations Act, and were therefore preempted. On August 16, 2011 the North Carolina Court of Appeals affirmed the decision. The decisions appear to be the first published decisions in a case involving NLRA preemption of identity theft claims against a labor union. The case is Fisher, et al. v. CWA, et al., Case No. COA10-927 (N.C. Appeals.) On February 13, 2012 the North Carolina Supreme Court denied the plaintiffs’ request for review. Link to N. C. Court of Appeals decision