Get ready to observe National Whistleblower Day on July 30, and remember to appreciate those with the courage to report misconduct. They’re not tattletales or rats—they’re people who care about and are committed to your organization. Here’s how you can help them.
Being, as we are, on the cusp of National Whistleblower Day 2021, now seems as good a moment as any to reflect on whistleblower protections, why companies should be supporting whistleblowers more than they are, and a few points corporations—whether in the United States or elsewhere—should keep in mind about whistleblowing.
- Speaking up has long been a tradition
While the origin of the term “whistleblowing” harks back to the days when British bobbies would blow their whistles to let other police as well as the public know that a crime was being committed, reporting misconduct has been a part of U.S. culture since the days of the American Revolution. The first whistleblowing law in the United States was passed by the Continental Congress on July 30, 1778 after a group of officers accused the commander in chief of the Continental Navy of mistreating prisoners of war and other misdeeds.
The new law provided that “it is the duty of all persons” to let Congress or other authorities know about “misconduct, frauds, or misdemeanors.” It’s a tradition that has carried on through the present. Today, Americans are reminded that if they see something, they should say something (a slogan promoted after the 9/11 attacks by the New York City Metropolitan Transit Authority to encourage reports about suspicious activity related to terrorism).
- Despite the pandemic and shutdown, regulators and enforcers are still receiving—and acting on—whistleblower reports.
The UK Financial Conduct Authority, for instance, assessed 1,046 whistleblower reports from April 2020 to March 2021, just 54 fewer than in the year prior. Canadian Securities Administrators report receiving 461 whistleblower tips in fiscal year 2020-2021, and the U.S. Securities and Exchange Commission disclosed in July that it has awarded roughly USD 939 million to 182 whistleblowers since 2012. Business may have slowed down, but misbehavior—and the reporting of it—apparently have not.
- Many countries are strengthening whistleblower protections
Numerous jurisdictions have whistleblower protection laws on the books, and some are expanding them. For example, Thomson Reuters Regulatory Intelligence recently reported that the Dubai Financial Services Authority has proposed enhancements to its whistleblower protections.
In addition, the world might expect a flurry of activity in the EU as its member states have until December 2021 to transpose its Whistleblower Protection Directive into their local laws. Transparency International and the Whistleblowing International Network reported that as of mid-February of this year, some two-thirds of the EU’s 27 member states had not made sufficient progress.
- The plaintiffs’ bar on whistleblowers is growing
Perhaps not surprisingly, as legislative initiatives to protect whistleblowers have developed, so, too, has a plaintiffs’ bar focusing on representation of whistleblowers. While laws vary from jurisdiction to jurisdiction, no corporation wants to be on the receiving end of a communication from a plaintiff’s attorney who represents a whistleblower.
- The defense bar on whistleblowing also is growing
Where there’s a plaintiff’s bar . . . there’s a defense one. While of course a whistleblower defense lawyer can help a corporation that has been falsely accused, why not forestall any whistleblower litigation in the first place? Putting into place a solid whistleblower policy, training employees, vendors, and even interns on how to make a report, and making them feel comfortable if they actually do report are all actions that can go a long way toward not having to foot any legal bills having to do with whistleblowing.
- Whistleblowing impacts every industry
It can be very tempting to dismiss talk of whistleblowing with an easy reassurance that “it could never happen here.” Some might mistakenly think that whistleblowing is limited to the financial industry, or to government overspending, but misdeeds can happen anywhere.
Have your doubts? Just peruse some recent cases: In July, the U.S. Department of Justice and the California DOJ announced that one of the largest hospital systems in the country—Prime Healthcare Services System—and two of its doctors agreed to pay USD 37.5 million to resolve allegations that kickbacks were paid for patient referrals. Yes, whistleblowers were involved.
Also in July, a federal court approved a settlement between the U.S. Department of Labor and a Chicago-area waste management company that had to pay back wages to a whistleblower who reported a workplace safety hazard.
That same month, President Joe Biden issued an executive order promoting competition in the agricultural industries that seeks to do so by, among other things, protecting whistleblowers.
A whistleblower played a role, too, in the investigation that led to the arrest of Nissan and Mitsubishi chairman Carlos Ghosn, accused, among other things, of underreporting his compensation. Ghosn subsequently fled from Japan to Lebanon, which does not have an extradition treaty with Japan.
- Minimize the drama with a strong whistleblower policy
Misconduct can happen anywhere, at any level, and if it does, a corporation should know about it—and act on it. That means reassuring employees that they can report bad actors and need not fear retaliation for doing so. Employees need to know how to make a report, whether on the record or anonymously, so that corrective action can take place.