In Smith v. LHC Gp., Inc., No. 17-5850, 2018 WL 1136072 (6th Cir. Mar. 2, 2018), the court of appeals reversed the district court's determination that a former employee and director of nursing for a home healthcare provider failed to state a claim for constructive discharge in violation of the False Claims Act (FCA), 31 U.S.C. §3730(h) and Kentucky law. The plaintiff alleged that she felt like she needed to quit her job after reporting an alleged fraudulent scheme in which she refused to participate. The defendant objected that it did not seek her resignation and took no adverse employment action that could constitute a discharge, demotion or other action for which it could be held liable. The district court agreed with the defendant that the plaintiff failed to state a claim because she alleged no facts showing that "the Defendants did anything directly toward her to make her quit her job" (emphasis original). The plaintiff alleged that she discovered that other employees regularly admitted patients without the requisite clinical evaluation or documentation, and she reported it to senior management, but management "invariably ignored her complaints." Reversing the district court, the court of appeals determined that, taking the plaintiff's allegations as true, a jury could find that the defendant "created intolerable conditions by ignoring [her] complaints of illegal activity." Moreover, the court of appeals ruled that an "employee alleging constructive discharge need not prove that his or her employer undertook actions with the subjective intention of forcing the employee to quit. Rather, the  intent requirement can be satisfied so long as the employee's resignation was a reasonably foreseeable consequence of the employer's actions."
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