Are you concerned about what to do if an employee claims to be a whistleblower? You should be. There are at least 18 federal laws protecting whistleblowers and many times that number of similar state laws. Some of the more common statutes containing whistleblower protections are the Occupational Safety & Health Act (OSHA), Clean Air Act, the Sabanes-Oxley Act, Consumer Product Safety Improvement Act, Toxic Substances Act and the recently implemented Dodd-Frank Act. For a full listing of federal statutes containing whistleblower provisions visit: http://www.dol.gov/compliance/guide/whistle.htm.
What is protected?
The purpose of these laws is to protect employees and others who report alleged unlawful conduct on the part of their employers known as “whistleblowing.”
These laws generally provide that an employee who believes that he or she has been discriminated against or retaliated against in violation of any whistleblower statute may file a complaint. Whistleblower statutes typically prohibit employers from discharging or otherwise discriminating against employees because the employee engaged in certain activities protected by law such as:
- Initiating a proceeding under, or for the enforcement of, any of these statutes or causing such a proceeding to be initiated;
- Testifying in such a proceeding;
- Assisting or participating in any such proceeding or in any other action to carry out the purposes of the statues; or
- Complaining of a statutory violation.
The cost of failure
These statutory provisions often provide onerous penalties for employers retaliating against whistleblowers. There is the cost associated with correcting the underlying condition that was the subject of the report in the first place. In addition, if a whistleblower violation is found, courts may award back pay, front pay, punitive damages, injunctions, reinstatement, emotional distress, attorney’s fees and apply damage multipliers among other things.
Four recommendations for minimizing liability risk:
Recommendation 1: Investigate promptly and thoroughly
Employers should take all reports of potential statutory violations seriously. A key part of this is taking appropriate steps to appoint an individual or bring in a third party to conduct a full investigation of the allegation. Experience shows that many cases resulting in liability under whistleblower statutes stem from a failure to take a complaint seriously at the outset. Employees who believe their concerns will not be taken seriously tend to take those concerns outside the organization.
Recommendation 2: Implement a comprehensive policy prohibiting retaliation and provide multiple reporting outlets. Examples of reporting outlets are senior managers, ethics officers, Human Resources and via an ethics hotline.
Recommendation 3: Train all supervisors, managers and employees on the non-retaliation policy and consistently hold them accountable for violations.
Recommendation 4: Create and institutionalize a code of business conduct and ethics. Senior management should take ownership of creating a culture where violations of the law or retaliation against those who report such violations are not tolerated. Creating such a culture requires sustained effort on the part of all members of the team. However, as compared to the potentially dire consequences of failure to do so, creation of a compliance culture costs relatively little.