How To Prevent Whistleblower Complaints

by Michael Volkov
Contact

imagesCA867U7EIn this era of whistleblower risk, companies need to prepare for whistleblower complaints which are made outside the company.  Whistleblowers are not required to report complaints internally nor wait for any specific period of time to benefit under the SEC whistleblower program.

Instead, whistleblowers have an incentive  to wait for 120 days before contacting the government.  Under the SEC’s whistleblower regulations, a whistleblower is entitled to a larger award if he or she waited 120 days after reporting the complaint internally to contact the government.

I have repeatedly advocated for companies to create whistleblower triage programs which are designed to identify and assess whistleblower complaints before or immediately after the complaint is lodged with the government.  If identified early, a company can determine how to respond to a whistleblower complaint an minimize ant risk of a government enforcement action.

As part of a triage program, a compliance officer needs to work closely with human resources and others inside the company to develop whistleblower intelligence.   What do I mean?

Human resources gathers valuable intelligence on employees and can identify those who are unhappy.  These employees are at risk for becoming whistleblowers.  Once identified, a proactive strategy for addressing their concerns should be developed and executed. imagesCAGR7BVM

A list of unhappy employees should be created.  Initially, it has to be emphasized that no action, formal or informal, should be take against any of these employees to avoid any appearance of “retaliation.”  To the contrary, the company should bend over backwards to contact the employee and hear the employee’s concerns.  The potential whistleblower should be dealt with respectfully and should be given a chance to articulate his or her specific concerns.

A proactive approach to potential whistleblowers is very risky.  Every interaction is risky and can be “used” against the company.  Some basic rules need to be followed:

1.  Listen to the Whistleblower – In dealing with a whistleblower, it is critical to listen to the whistleblowers concerns.  The whistleblower must be given an opportunity to describe all of his or her concerns.  While listening, it is important for the company representatives to avoid prejudging any issue, suggesting that the whistleblower is wrong, and brushing aside any of his or her specific concerns.  A company representative should take notes during the meeting and write down all of the whistleblowers concerns.

2.  Do Not Overpromise:  At the conclusion of an initial meeting with a whistleblower, the company representative should inform the whistleblower that the company will review the allegations, conduct a “preliminary” investigation and report back to the whistleblower during, or at the conclusion of, any investigation.  It is important to inform the whistleblower that the company will continue to keep the whistleblower informed and may have follow-up questions as the review of this matter continues. Every interaction with the whistleblower should be documented so that a record of every step is maintained.

3.  Conduct a Fair Investigation – Depending on the nature of the allegations, a follow up inquiry should be conducted.  The steps taken in the investigation should be documented.

imagesCAIDB43IAny investigation and resolution of an allegation should be fully explained.  The facts should be described and any credibility determinations should be recorded.  If necessary, the whistleblower should be contacted and interviewed on any follow up issues identified during the investigation.

As allegations are resolved against a whistleblower, a company representative should meet with the whistleblower and describe to the whistleblower the results of the inquiry.  The resolution of an investigation does not require a lengthy explanation of how the company reached its determination, nor should the specific steps taken during the investigation be described.

The whistleblower will request that company representative explain why the whistleblower’s allegations were rejected.  The company representative should be very careful to limit any disclosure of how the investigation was conducted and the reasons for the company’s determination.  As always, every interaction and communications with the whistleblower should be documented.

If the whistleblower’s complaint has merit, the company should respond immediately and take steps to correct the problem.  The whistleblower should be informed of the result of the investigation and the steps taken to correct a problem.  The whistleblower should be thanked and even rewarded for bringing the issue to the company’s attention.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Michael Volkov, The Volkov Law Group | Attorney Advertising

Written by:

Michael Volkov
Contact
more
less

The Volkov Law Group on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!