In November, shocking allegations emerged that Jerry Sandusky, a former defensive coordinator of the Penn State University football team, had sexually molested young boys whom he befriended through a charity he started. Sandusky’s alleged actions were not the only appalling part of the story. Also disturbing were the allegations that other Penn State coaches and employees knew of the crimes for years but failed to notify police.
According to the nonprofit Ethics Resource Center, about half of all American employees have witnessed a boss or colleague engage in illegal or unethical conduct in the workplace. That misconduct usually involves something like fraud, ignoring safety or environmental laws or underpaying taxes—not child abuse—but whatever the crime, employees who witness it are in a difficult position. They typically want to stop the misbehavior, but calling attention to misconduct can damage or even ruin the whistle-blower’s career or, in some cases, get him/her sued.
Though the decks are stacked against whistle-blowers, you still can do what’s right and protect yourself. Here’s what you need to know before you speak up about an ethical or legal lapse in your workplace…
Most whistle-blowers don’t set out to be whistle-blowers—they just come across potential problems that they want to warn others about. But not all bosses are grateful for these warnings. Some consider employees who call attention to ethical or legal lapses disloyal troublemakers—particularly if management is involved or if the situation would be expensive to correct.
Other employers decide that the best solution is to bury the problem—which could include burying the career of the employee who called attention to it. The employer will dig up or fabricate a black mark on the work history of this well-meaning employee, then use that mark as an excuse for termination. That way, if the employee later reports the misconduct to the police, government regulators or the media, the allegations can be dismissed as coming from a disgruntled ex-employee with an axe to grind.
Example: When Enron employee Sherron Watkins sent a heads-up memo about accounting issues to her boss in 2001, her employer investigated whether Watkins could legally be fired. (She ended up resigning.)
Three recommendations if you’re thinking of blowing the whistle…
Helpful: Under the Dodd-Frank Act, employees can file complaints concerning securities and commodities fraud anonymously and still qualify for large financial rewards. The procedures for anonymously blowing the whistle are spelled out in new regulations published by the Securities and Exchange Commission (SEC) and mandate that the whistle-blower obtain legal counsel to ensure that an anonymous claim is properly filed and that the whistle-blower is fully protected. Information: www.sec.gov/whistleblower
Helpful: The nonprofit National Whistleblower Legal Defense and Education Fund can provide attorney referrals. (Go to www.WhistleBlowers.org, select “Services,” then “Attorney Referrals.”).
There are dozens of federal and state laws that protect the jobs of whistle-blowers and allow them to sue for back pay and legal fees if they are unfairly terminated. But each of these laws applies only in specific circumstances, and it’s easy for whistle-blowers to make missteps that deprive them of legal protection.
Example: A construction engineer discovers that his employer has used an inadequate grade of concrete to build a bridge. When his supervisor ignores his concerns, he speaks to the press. The company fires the engineer and sues him, arguing that its concrete mix is a trade secret that he had no right to disclose. Had this engineer consulted a lawyer, he would have been advised to voice his concerns to the Department of Justice rather than the press. This would have allowed him to take advantage of whistle-blower laws that could have shielded him from liability.
Some whistle-blower laws offer financial rewards to whistle-blowers—typically 10% to 30% of any money collected by the government in the form of fines or funds recovered from those who defrauded the government. Among the laws that offer rewards…
Example: Whistle-blowers caught pharmaceutical company Eli Lilly using illegal marketing techniques to increase sales of Zyprexa, a drug used to treat schizophrenia and bipolar disorder. The case qualified under the False Claims Act because some patients obtained Zyprexa through the federal government programs Medicare and Medicaid. The whistle-blowers received nearly $79 million in rewards in 2009.
Many states have whistle-blower protection laws, but these typically offer less protection than comparable federal laws.
Exceptions: State whistle-blower protection laws are very strong in California and New Jersey.
Whistle-blowers are more likely to be believed if they have evidence to back up their allegations. But gathering evidence can be a legal minefield. What you need to know…
Warning: Companies increasingly are suing whistle-blowers who copy or remove valuable documents, such as those that spell out trade secrets. These companies argue that because the documents have value, whistle-blowers who take them are guilty of theft. Courts usually side with whistle-blowers in these cases—particularly when the whistle-blower has good reason to believe that the documents will be destroyed if not removed. Still, when valuable information is involved, the safest policy for whistle-blowers is not to remove or copy the documents, but instead to determine precisely where these documents are located in the office, then provide government regulators with instructions on how to find them.
Source: Stephen Kohn, executive director of the National Whistleblowers Center, a nonprofit, nonpartisan organization, and an attorney with the law firm Kohn, Kohn & Colapinto, LLP, both in Washington, DC. Kohn has testified before Congress about whistle-blower reforms and worked with the staff of the Senate Judiciary Committee drafting the Sarbanes-Oxley whistle-blower law. He is author of The Whistleblower’s Handbook: A Step-by-Step Guide to Doing What’s Right and Protecting Yourself (Lyons). www.WhistleBlowers.org