United States ex rel. Welch v. My Left Foot Children’s Therapy, LLC

False Claims Act lawsuit was not subject to defendant employer’s arbitration clause in its contract with employee claimant, since it had no substantial connection to the employment relationship, and it was a claim by the United States, not the employee, against the employer.  An employer’s arbitration clause was not phrased broadly enough to encompass a False Claims Act suit brought by a former employee based on facts she observed during her employment.  Although the clause defined “disputes” in a separate section very broadly, the clause’s actual agreements to arbitrate disputes were more narrowly drawn either to encompass only disputes arising out of or related to the employment relationship or to claims the employee had against the employer or vice versa.  The False Claims Act suit fit within neither of these categories.  It had no substantial connection to the employment relationship, and it was a claim by the United States, not the employee, against the employer.

Ninth Circuit Court of Appeals (Fisher, J.); September 11, 2017; 2017 WL 3976314

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