Litigation: To the tune of $3 billion, whistleblower claims are on the rise - The 2010 Dodd-Frank Act is the likely impetus for the steep increase

At one time whistleblowers were relatively rare and isolated, and the law did not grant them much protection. But that’s not the case anymore. Fulbright & Jaworski's recent litigation trends survey of in-house counsel found that more than 25 percent of companies had faced whistleblower allegations in the past three years.

Whistleblowers employed by defense contractors, pharmaceutical manufacturers and other companies have increasingly taken allegations of violations of law to the government—with striking results. Companies on the receiving end of these allegations have paid billions of dollars in fines and penalties following whistleblowers’ cooperation with law enforcement authorities and civil lawsuits. What’s more, new laws have granted whistleblowers enhanced protections against retaliation and increased financial incentives to tell the government about suspected violations of law by their employers.

In this article, the first of three on the evolving law and culture of whistleblowing, we discuss emerging trends and the basic legal and practical drivers of these trends. In the two articles that follow we discuss how companies can minimize the risk of being accused of “retaliating” against a whistleblower, and how companies can most effectively to conduct an investigation when faced with a whistleblower complaint.

Originally published in Inside Counsel on May 16, 2013.

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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.

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