Kicking Employers While They Are Down: Vicarious Liability Under the Anti-Kickback Act

The Anti-Kickback Act is one of the instruments the Government uses to punish and prevent procurement fraud. The Act creates criminal and civil liability for the use of kickbacks by government contractors. Specifically, the civil provision contains two subsections -- one punishing employees for their actions, and the other punishing employers under a theory of strict liability. In United States ex rel. Vavra v. Kellogg, Brown & Root, the United States Court of Appeals for the Fifth Circuit held that employers are subject to vicarious liability for their employees\u27 violations of the first subsection of the civil suit provision of the Anti-Kickback Act in addition to being strictly liable under the second subsection, effectively punishing employers twice for their employees\u27 actions. Moreover, the Fifth Circuit suggested that vicarious liability could exist when, in the absence of employers\u27 knowledge, employees act with apparent authority to defraud the Government by offering or accepting kickbacks. This Note examines and critiques the Fifth Circuit\u27s decision and proposes an elevated standard before imposing vicarious liability on employers for their employees\u27 violations of the Anti-Kickback Act. At the very least, the Government should be required to show that where an employer had no knowledge of its employee\u27s actions, the employee, acting with apparent authority, intended for his or her actions to benefit the employer