If You See Something ...
There’s good news for workers who speak up about illegal activity at work: Legal protections for corporate whistleblowers in the United States are the strongest they’ve ever been.
“It’s a new world both for employees in terms of their rights and for employers in terms of the legal quicksand that they are likely to find themselves in by engaging in traditional bullying tactics,” says Tom Devine, legal director for the nonprofit Government Accountability Project (GAP) and co-author of “The Corporate Whistleblowers Survival Guide” (Berrett-Koehler Publishers, 2011).
Devine says that there are now 58 different whistleblower protection laws.
The most common features of these laws emerged from the Whistleblower Protection Act of 1989, which protects federal government workers, but has served as a blueprint for many other whistleblower laws. “Under that law, in order to be a whistleblower, you have to disclose information that you reasonably believe is evidence of illegality,” Devine says. “That’s the common ground that would apply to corporate workers if they have [whistleblower] rights.”
More and more corporations are starting to appreciate the value of internal whistleblowing to help reduce economic fraud and legal liability within their organizations. As a result, an increasing number are providing anonymous hotlines to address the issue – and reaping business benefits as a result.
A 2014 global fraud study by the Association of Certified Fraud Examiners found that organizations with hotlines got 51 percent of their fraud cases detected by tips, versus just 33.3 percent of companies without a hotline. As the study notes, several of the other detection methods tend to be associated with higher median losses and increased duration of fraud. These less-effective means of detection were more than twice as common in organizations lacking hotlines.
“I basically view a corporate leader’s perspective toward whistleblowers as a test of professional maturity,” Devine says. “It may be bad news they don’t want to hear, but it’s like the bitter pill that keeps you out of the hospital.”
When they see evidence of wrongdoing, Devine advises whistleblowers to make an anonymous hotline tip first. This gives the organization an opportunity to act on the evidence without the employee being identified as a potential threat. “Surveys have consistently shown that almost all of the corporate whistleblowing disclosures occur within the organization,” Devine says. “And that’s because, as a general rule, they’re blowing the whistle in defense of the corporation.”
In the absence of a hotline, any attempt to raise the issue internally should be done with caution and extreme discretion. “Raise it as a concern,” Devine says. “Say ‘I’m worried. Are we going to be incurring any liability by taking this action?’ or ‘What are the legal facts of life before we find ourselves inadvertently in trouble with the regulatory agency?’”
In situations where the organization is clearly covering up misconduct or is proudly in defiance of regulators, this approach is inadvisable. “Then the whistleblower knows that they probably need to go public, rather than advising the fox about the security breakdown in the henhouse,” Devine says.
Before taking any action that could spark retaliation from the employer, workers should gather all the evidence they can regarding the wrongdoing. The worker should also at that time consult a lawyer with expertise in the area.
“The attorney can be the navigator for what options give them the strongest legal rights or put them on the highest legal ground,” Devine says. “The lawyer may also know the best politicians to share that information with and the most trustworthy law enforcement officials.” The lawyer can additionally help the worker respond effectively to legal threats of prosecution from the organization that intend to intimidate but have no legal basis.
Devine estimates that he has provided legal assistance to over 5,000 whistleblowers over his career. He notes that becoming a whistleblower can be the most fulfilling decision of a person’s life because they’ve been true to themselves and effective in challenging abuse of power. But it can also be an apocalyptic decision that often leads to blacklisting, bankruptcy and a shattered personal life.
“It can go either direction depending upon how strategic they are in acting on their rights,” Devine says. “But the one thing that everyone has in common, whether there’s a happy or a tragic ending, is that their lives will never be the same. This is a life’s crossroads decision from which there’s no turning back.