What is a Whistleblower: Everything You Need to Know
What is a whistleblower? A whistleblower is an employee who discloses information she or he believes proves illegal actions, 8 min read
2. History of Whistleblowers
3. Different Types of Whistleblowing
4. Historic Case
5. The Actions of a Whistleblower
What is a whistleblower? A whistleblower is an employee who discloses information she or he believes proves illegal actions, massive fraud or waste, abuse, mismanagement, wrongdoing, or something of great risk to the public good.
What is a Whistleblower?
A whistleblower can be any person who learns of illegal or unethical actions within their company or department. They refuse to participate in it, and report it to the relevant authorities. Whistleblowers are important backstops to abuses of authority or corruption. They help bring wrongdoers into accountability. Whistleblowers can save lives and resources through their actions, so it’s important they be given special protections against retribution.
Whistleblowers are critical for holding governments and private companies to scrutiny. As insiders, they are often assumed to be “part of the team.” This can lead to all sorts of abuse to which they are privy.
A whistleblower can report all sorts of illegal or unethical actions within their organizations. They refuse to participate and then report it. This activity isn’t just against the government. Such actions can start within the government, and concern only government actions.
A whistleblower might be an employee, supplier, contractor, client, or any person who learns of illegal or unethical acts in a business. They can learn of these acts by witnessing the act or by receiving a report of it.
Whistleblowers have long been exposed to the threat of retaliation. In an effort to defend them against retaliation, laws have been enacted through OSHA (Occupational Safety and Health Administration) and the SEC (Securities and Exchange Commission).
Whistleblowers might choose to publicize their information to the company, or to an outside organization or government. Since the 1960s, the public value of whistle-blowing has been increasingly recognized.
For example, federal and state statutes and regulations have been enacted to protect whistleblowers from various forms of retaliation.
Even without the federal and state statutes intended to shield whistleblowers from retaliation, numerous decisions defend whistleblowing on public policy grounds.
History of Whistleblowers
In the 1990s, some in the media claimed men were more likely to become whistleblowers than women.
The reason for this was assumed to be the monetary rewards sometimes associated with the whistleblowing. This theory was somewhat undermined by the sudden increase of female whistleblowers at around the same time, as though on-cue. It was also revealed many acts of whistleblowing didn't result in any material reward for the whistleblower.
Courts have in some places exempted whistleblowers from protections when they are employed at-will. However, most whistleblowers are still covered under protective laws.
In civil service for the federal government, the government cannot take or threaten to take any HR action against any employee following a revelation from that employee he or she believed proved a violation of law, egregious mismanagement, the waste of government funds, abuse of authority, or a considerable, specific danger to the public's security or well-being.
Different Types of Whistleblowing
Internal whistleblowing means reporting the misdeed to another person in the organization.
External whistleblowing means reporting it to external authorities, or the media.
Government whistleblowers can also be private-sector employees who report misconduct on the part of the government, or on the part of a private company against the government.
People who work in the government are protected under the Whistleblower Protection Act or WPA. This protects them against retaliation for reporting bad behavior.
One of the most heart-rending examples of a whistleblower suffering the unfair consequences of his well-meaning act occurred in the infamous Tuskegee Syphilis Experiment.
It was 1966. A then-27-year-old epidemiologist in the employ of the U.S. Public Health Service discovered some irregularities while interviewing patients.
His name was Peter Buxtun. He discovered the U.S. federal government had purposely denied syphilis treatment to poor black men.
There was no reason for the denial, on the surface of the issue. Penicillin had been invented in the 1940s and was a ready cure. The government purposely allowed these men to die and spread the disease to their wives and children, just to allow some within the government to observe the spread of disease within their community. Unknown to the victims, almost 400 men were involved in the experiment from the 1950s through the early 70s.
Peter Buxtun twice filed complaints with the federal government. These went unheeded. Finally, after four years, he turned to the media. When the public learned of the government’s crimes, the experiment ended, new laws governing medical research were enacted at the state and national levels.
President Bill Clinton took it on himself to apologize for the actions of the government years before, though his administration had no direct involvement.
At a formal apology ceremony, Clinton said “the United States government did something that was wrong - deeply, profoundly, morally wrong. It was an outrage to our commitment to integrity and equality for all our citizens... clearly racist.'
Corporate whistleblowers are private-sector employees who uncover and report legal or regulatory misconduct by their employers. These corporate whistleblowers are covered under the Corporate and Criminal Fraud Accountability Act.
Protective whistleblower laws have existed since the days of the Civil War. President Lincoln wanted to embolden citizens to report the fraud and waste that occurred during the war. The FCA (False Claims Act) was enacted in 1863 specifically to combat those misdeeds.
The FCA includes provisions encouraging private citizens to bring lawsuits against others thought to be committing fraud against the government. As an extra inducement, the whistleblower could be offered a percentage of whatever was recovered from the fraudsters.
The FCA is still established law today, and is frequently referenced, but it has evolved over the years.
Anyone who suspects false claims or fraudulent activity against the federal government can bring a lawsuit in his or her name, and in the name of the U.S. Government. The provisions state that the information hasn’t already been publicly-disclosed, and that the government themselves hasn’t already sued in the fraud case. If it is new information and isn’t currently being prosecuted in some way, any citizen may bring a case under the FCA.
Whistleblowers are called “relators” under the FCA. A relator would file a case in federal court (in secret) and provide the government a copy of the case. The government has 60 days for reviewing the case. It can decide if the case is worthy and has merit. If the government decides it is a worthy case, they can have the case unsealed. The case is then brought against the defendant. In that case, the government and the relator work together as co-plaintiffs.
If the government decides they don’t want to be involved, the relator can proceed to bring the case on his own behalf without government support.
A successful FCA case can bring the relator a bounty of 15-25 percent of the claim settlements. This depends on how much the relator’s actions contributed to the success of the case.
Additionally, public sector whistle-blowers are protected under the WPA. The Whistleblower Protection Act defends federal employees from retaliatory acts by the government. Once the claim has been made, the government can’t take any personnel actions against the whistleblower. The WPA became law in 1989. It was recently revised through the Whistleblower Protection Enhancement Act of 2012.
In the world of finance, special laws are needed to protect whistle-blowers. The CCFA (Corporate and Criminal Fraud Accountability Act) came about in 2002 as a response to the fraud uncovered through Enron and other high-profile financial scandals. The CCFA makes retaliation against employees who uncover securities-related fraud a federal crime in itself. The act offers protection to whistle-blowers provided the information they uncover is validated as true.
The protections offered whistleblowers include restrictions on negative personnel actions. It also shields the whistle-blower against lawsuits brought by the accused. More protections are available should the accused physically threaten the relator.
In cases where the information uncovered by the whistleblower is classified, there are provisions to communicate that information secretly through secure channels.
Though whistleblowers are protected from retaliation, there are different laws governing different industries and businesses.
Whistleblowers are protected by law from retaliation, but U.S. laws vary among different industries.
- Whistleblowers employed by the federal government are protected by the Whistleblower Protection Enhancement Act (WPEA).
- Whistleblowers working in New York Stock Exchange-traded companies are protected by the Sarbanes Oxley Act of 2002.
- Employees in the food industry are protected by the Food Safety Modernization Act (FSMA).
- The Dodd-Frank Wall Street Reform and Consumer Protection Act covers whistleblowing in the financial sector.
- Whistleblowers are protected from retaliation in International organizations such as the United Nations, the World Bank, and the Global Fund.
In contrast with laws like the FCA, whistleblower protection policies can’t be directly enforced as laws. They serve as guidelines to which companies and organizations can be held accountable.
The Actions of a Whistleblower
These protection laws require quick, conscious action on behalf of the employees to be successfully prosecuted.
Whistleblowers who believe they’ve suffered retaliation should file a complaint with OSHA or the relevant regulatory authority within recognized deadlines. All that's necessary to file a complaint is a good-faith assertion that their employer has committed misdeeds covered under the law. The protections offered by the laws don’t depend on the accusations proving accurate. Even if wrong, the employee is still protected under the whistleblower law against demotion, firing, pay-cuts, and harassment.
It’s common for lawsuits in whistleblower cases to recover lost wages and back pay.
Some examples of whistleblowing cases which have resulted in fines and damages against the wrongful companies:
- Illegal waste dumping
- Faulty equipment sold to the military
- Fraudulent actions by financial companies
Most case brought under the FCA involve fraudulent actions among military contractors and health care providers. The FCA frequently affects government agencies and the companies with which they contract.
Deadlines for filing whistleblower or retaliation claims vary by law and industry.
If a whistleblower is considering filing a claim and seeking protection, their first step should be to contact a lawyer with experience in whistleblower cases.
Winning a whistleblower retaliation case requires the relator to show that the disclosure was made, when it was made, that the official(s) knew the facts of the disclosure, and that retaliation was taken as a direct action against the claim. .
Organizations differ in how they value what particular sorts of illegal activities are reported.
OSHA will always be more interested in environmental and safety issues. The SEC will always be more interested in matters touching on financial and securities laws. The gist: Don’t take a financial issue to OSHA, nor a workplace-safety issue to the SEC.
Various regulatory agencies might offer rewards or bounties on whistleblower information. They have the option of reporting such issues anonymously at first. However, as the case progresses, you might be contacted to testify.
Internal whistleblowing is usually the best first option in most cases. However, if the misdeeds extend beyond small issues to things that affect the entire company, sometimes the best first option is to contact OSHA or the SEC directly.
If you’re facing the possibility of retribution in a whistleblower case, consider posting your questions to UpCounsel. UpCounsel’s team of legal professionals can assist in determining the best course of action for you to defend yourself against retribution, and to ensure the recovery of any lost wages. Our legal professionals are selected from the top 5 percent of practicing lawyers and paralegals in the U.S. Don’t take on the possibility of retribution on your own. Call upon the help of UpCounsel.