Whistle Blowing

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The Wider Disclosure

PIDA offers protection to those who go straight to the media if appropriate[28].

If the employee can prove that the concerns they have highlighted are serious,[29] individuals have a further protection[30]. It would be prudent to note that should this be for personal gain the disclosure will not warrant the protection[31]. However, payment by way of reward may be applicable or under any enactment such as a payment made by Customs and Excise[32].

Detriment

A whistle-blower on making a successful disclosure[33] can be made to feel as though what he or she has done is morally wrong. This can involve the whistle-blower becoming subject to name-calling and it has been known that whistle blowers have been referred to as a “grass” or a “sneak.”[34] The ERRA amended the Employment Rights Act 1996 to provide provisions which will hold employers vicariously liable if a worker is subjected to detriment by a co-worker for making a protected disclosure, provided this has been brought to the attention of the employer[35] The Act provides further protective measures for employees who suffer any victimization due to disclosure and provides relief for any harm suffered[36]; including dismissal[37] and redundancy[38] but also applies to other forms of detriment[39] such as demotions, and pay cuts.[40]

In terms of remedies, if an employee is dismissed following a protected disclosure, the tribunal has the authority to reinstate them.

It can be argued however following the detriment[41] and the disclosure the position can become difficult for both the employer and employee and eventually a breakdown in the relationship of trust. The tribunal on occasions like this, can make an order for compensation, these awards can be substantial. [42]

The Provisions in the UK are clearly to ensure that whistleblowing is encouraged and with the fear of potential whistle-blowers in the work place, this would deter organisations, employers, and co employees to refrain from any forbidden activities in the legislation. The focus of PIDA is very much to support the whistle-blower.

American Whistleblowing Provisions

American Whistleblowing Legislation Sarbanes Oxley 2002 and Dodd-Frank 2010

The first major development was the Sarbanes Oxley Act 2002 (SOX) it provided very basic provisions to whistle-blowers, the remaining relating to accounting reporting issues.[43]

This was enacted on the exposure of Enron and WorldCom scandals, the Act aimed to reclaim investor confidence in the financial markets by improving corporate responsibility by making changes in corporate governance and accounting practices and by introducing whistleblower protection to employees of public trading companies who expose corporate fraud.

SOX contain both a civil and a criminal whistleblower provision.

Civil Protections

Section 806, codified at 18 U.S.C. §1514A, creates a civil cause of action for

employees who have been subject to retaliation for corporate whistleblowing.

Furthermore the code states, publicly traded companies may not “discharge, demote, suspend, threaten, harass or in any other manner discriminate against an employee in the terms and conditions of employment” because of any protected whistleblowing activity.

Criminal Provisions

Section 1107, SOX’s criminal whistleblower provision, codified at 18 U.S.C.

§1513(e) makes it a felony for anyone to knowingly retaliate against or take any harmful action to any person, including interference with the person’s employment, for providing truthful information to a law enforcement officer relating to the commission or possible commission of a federal offense. As part of a criminal obstruction of justice statute, Section 1107 is enforced by the U.S. Department of Justice. Retaliation under Section 1107 is listed as a possible predicate act under RICO.

The Department of Labor Office of Administrative Law Judges hears Section 806.

Whistleblower claims following the filing of objections to OSHA investigative findings. SOX.

Also contains a kick-out provision, which allows a complainant to file a de novo action in federal court if the DOL does not issue a final decision within 180 days.

As a demise of recent scandals i.e. Bear Sterns and Lehman Bros, a further piece of legislation was implemented to protect whistle-blowers, the Dodd-Frank Wall Street Reform and Consumer Protection Act. The new Act provides additional levels of protection for whistle-blowers; it offers monetary incentives for individuals to bring forward whistle-blower claims. If the individual volunteers genuine information to the US Securities and Exchange Commission (SEC) about a public company in relation to financial fraud, then the individual may be able to recover, between 10% to 30% of any assessed fine in excess of $1 million.

It could be argued however that this opens the floodgates to unwarranted claims being brought forward to the agencies on the premise that a fraud will be recovered as they intend to cash in. It could also be said that employer’s will be weary of taking on employees who are simply in the workplace to witness a wrongdoing to gain financially.

Dodd-Frank provides further whistle-blowers with protection against retaliation. American companies have expressed concerns of conflict between the operation of Sarbanes-Oxley and Dodd-Frank as internal compliance and reporting systems implemented in the SOX will be by passed as making the information public will allow them to receive the whistleblowing bonus.

Whistleblowers could be motivated by the protections available, but it could also be argued they are motivated by the want to do the right thing, and in the case of those in the USA, the motivator by financial rewards.

Whistleblowing laws are in place to promote honest and morally correct behaviors to discourage different wrongdoings from happening and to detect dishonest practices.

Edward Snowden The Edward Snowden, scandal a former employee of the US National Security Agency's (NSA) contractor revealed the NSA's domestic surveillance program, alleging violation of privacy, Internet freedom, and