Navigating Whistleblower Laws
We commonly refer to employees who report what they reasonably believe to be unlawful corporate activity as “whistleblowers.” Protections for whistleblowers have grown exponentially in the last twenty years at both the federal and state level. For the most part, enactment of statutes granting whistleblower protections has fueled this growth. But administrative and judicial interpretation of whistleblower statutes also accounts for the trend.
Outside of industry-specific protections, the most common whistleblower claims fall under one of the following statutes:
Occupational Safety and Health Act of 1970—promoting workplace safety
Sarbanes-Oxley Act of 2002—governing financial disclosures, accounting, and auditing of public companies
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010—restricting lending practices of financial institutions
FDA Food Safety Modernization Act of 2011—promoting food safety
National Defense Authorization Act of 2013—targeting waste, fraud, and abuse in government contracts
False Claims Act—prohibiting abuse of federal programs through false claims and other abuse
These and many other statutes forbid retaliation against an employee who reports in good faith a belief that the company is violating the law. If, for example, an employee is disciplined or terminated after a heated discussion of the employer’s practices, products, or internal policies, it is likely to give rise to a colorable claim of retaliation under one of the whistleblower protection laws.
The best line of defense is to have solid corporate bylaws, codes of conduct, employee policies, and clearly defined procedures for filing complaints of any kind. Be clear that no illegal conduct is acceptable and have a protocol for employees to report any kind of wrongdoing when they see it. Dealing with these issues internally can avoid legal actions and assure employees that your company does not tolerate any violation of law.
Even with solid practices in place, whistleblowing is a difficult and often complex matter of law. Consult an experienced employment attorney to ensure that both employers and employees are protected. As always, we are happy to help.