Boeing has settled a whistleblower lawsuit that alleged the company had improperly billed the federal government for labor costs.

The $18 million settlement addresses allegations that The Boeing Co. had overbilled the U.S. government for labor time that its employees actually spent on extended breaks.

The whistleblower, former Boeing employee James W., initiated his whistleblower lawsuit under the qui tam provisions of the False Claims Act. Later, the civil division of the U.S. Justice Department took up the case and litigated it to settlement.

The allegations arose out of Boeing’s contracts with the U.S. Air Force to perform maintenance on its fleet of C-17 Globemaster aircraft at Boeing’s Long Beach Depot Center in California.

James alleged that Boeing had billed the Air Force for time that its mechanics had actually spend on extended breaks and lunch hours, not on hours of labor that would have been properly billable.

According to the Justice Department, the C-17 is one of the U.S. military’s main systems for transporting troops and equipment around the world. The C-17 is both manufactured and maintained by Boeing.

A statement from Boeing says the company took immediate corrective action once it became aware of the allegedly improper billing practice. The company says it cooperated fully with the Justice Department’s investigation.

As a successful whistleblower, James will get a portion of the settlement. The amount of his portion is yet to be determined, the Justice Department said.

The Boeing Whistleblower Lawsuit is Case No. CV-000694 in the U.S District Court for the Central District of California.

Federal Whistleblower Laws

The False Claims Act, or FCA, is a federal law that allows private individuals to initiate legal action against federal contractors that may be defrauding the government.

The FCA’s whistleblower provisions, known as qui tam provisions, give private individuals the incentive to take up fraud cases that the government itself may not be able to take on due to limited resources.

The whistleblower who files a qui tam lawsuit is known technically as a “relator.” Once the claim is filed, it is kept under seal while the Justice Department gets a chance to investigate the allegations and decide if it wants to join the lawsuit. Claims are kept under seal for a minimum of 60 days, though in practice the seal is frequently renewed, keeping some claims under seal for several years.

Damages in an FCA case can reach up to three times the amount of money actually involved in the false claim. Not all damages go to the whistleblower, though. To compensate the relator for his or her effort in initiating the whistleblower lawsuit, the FCA provides for an award of 15 to 30 percent of the recovery.

The FCA covers fraud committed in the performance of any federal contract or federally-funded program (except for tax fraud, which is covered by a separate IRS program).

Historically, qui tam lawsuits have been used several times in cases of alleged defense contractor fraud, as in James’s case. More recently, the FCA has been frequently invoked in response to allegations of Medicaid fraud and Medicare fraud.