Release Enforced by U.S. Court of Appeals

In U.S. ex rel. Radcliffe v. Purdue Pharma, the Fourth Circuit for the U.S. Court of Appeals enforced a release barring a qui tam action where the government had declined intervention.  Included in the release executed by the employee was a waiver of all awards the employee may be entitled to in any federal court, state court, or administrative proceeding.  The Court refused to invalidate the release as contrary to public policy. 

Although the release in this case was enforceable, such a release could not waive the government's interest in the action nor could a release prevent government investigation of allegations brought by qui tam suits.  However, the release could bar the action in the event the government declines to intervene.  What is unsettled is whether or not a release can bar the relator's share of the reward in the event the government intervenes and recovery is obtained.

Since releases can be applied to preclude certain qui tam lawsuits, employers should consider a broadly-worded release upon termination of employment.  At a minimum, the release can serve as a disincentive for disgruntled former employees to bring qui tam actions.