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Whistleblowing: Know the Tune

Employees who alert their companies about potential or actual health, safety, or public policy problems can provide an early warning of danger ahead. But if employers aren’t careful how they handle whistleblower complaints, they could wind up in legal trouble — possibly with damaging publicity.

Some Federal Laws Protecting Whistleblowers

  • Dodd-Frank Wall Street Reform and Consumer Protection Act 
  • Sarbanes-Oxley Act
  • Occupational Safety & Health Act
  • Surface Transportation Assistance Act
  • Asbestos Hazard Emergency Response Act
  • International Safety Container Act
  • Energy Reorganization Act
  • Clean Air Act
  • Safe Drinking Water Act
  • Federal Water Pollution Control Act
  • Toxic Substances Control Act
  • Solid Waste Disposal Act
  • Comprehensive Environmental Response, Compensation and Liability Act
  • Wendell H. Ford Aviation Investment and Reform Act for the 21st Century
  • Corporate and Criminal Fraud Accountability Act
  • Pipeline Safety Improvement Act

Several states and localities also have their own laws.

Most employees initially voice their concerns about illegal, unethical or dangerous business practices to their supervisors. But they may decide to take their stories to the government or the news media. In either case, various laws protect whistleblowers from retaliation.

At one time, most federal and state whistleblower laws only protected employees who raised certain types of public health, safety or health care fraud issues. But that all changed when Congress enacted the Sarbanes-Oxley Act and drastically changing the protections provided to whistleblowers at publicly traded firms.

Then, in July of 2010, the Dodd-Frank Act was signed into law, authorizing the Securities and Exchange Commission to reward whistleblowers with 10 to 30 percent of the amounts it recovers above $1 million.

Generally speaking, courts make a fairly broad interpretation of what constitutes retaliation or discrimination against a whistleblower. For example, without irrefutable justifying documentation, you can’t:

  • Give whistleblowers a less satisfactory than usual performance appraisal.
  • Demote or terminate them.
  • Deny benefits that whistleblowers are entitled to, such as a pay raise.
  • Take actions such as excluding them from meetings, giving them demeaning jobs or transferring them.

Here are a few tips to help protect your company:

Adopt a policy to inform employees that the company wants to know about their concerns. Outline how to report problems. For example, set up a telephone hotline where employees can call in anonymously. That helps your company capture concerns internally, where they can be handled more effectively. Make sure the policy is widely disseminated. If you have a policy regarding zero tolerance for discrimination and harassment, revise it to specify that harassment includes retaliation for whistleblowing.

Handle concerns properly.
 When someone raises a concern, deal with it promptly. Follow up by informing the employee about the status of the investigation. Focus on the issue, not the employee’s motivation.

Provide training.
 Managers and human resources staff should be familiar with federal and state whistleblowing laws and the importance of full and accurate documentation to support actions taken. Review document retention policies.

Consult with your attorney.
 Discuss the legal aspects of any whistleblower investigation.

Reprinted with permission from Thomson Reuters 07.2021

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