Whistleblowing

The disclosure by a person, usually an employee in a government agency or private enterprise, to the public or to those in authority, of mismanagement, corruption, illegality, or some other wrongdoing.

Since the 1960s, the public value of whistle-blowing has been increasingly recognized. For example, federal and state statutes and regulations have been enacted to protect whistleblowers from various forms of retaliation. Even without a statute, numerous decisions encourage and protect whistleblowing on grounds of public policy. In addition, the federal False Claims Act (31 U.S.C.A. § 3729) will reward a whistleblower who brings a lawsuit against a company that makes a false claim or commits Fraud against the government.

Persons who act as whistleblowers are often the subject of retaliation by their employers. Typically the employer will discharge the whistleblower, who is often an at-will employee. An at-will employee is a person without a specific term of employment. The employee may quit at any time and the employer has the right to fire the employee without having to cite a reason. However, courts and legislatures have created exceptions for whistleblowers who are at-will employees.

Whistleblowing statutes protect from discharge or discrimination an employee who has initiated an investigation of an employer's activities or who has otherwise cooperated with a regulatory agency in carrying out an inquiry or the enforcement of regulations. Federal whistle-blower legislation includes a statute protecting all government employees, 5 U.S.C.A. §§ 2302(b)(8), 2302(b)(9). In the federal civil service, the government is prohibited from taking, or threatening to take, any personnel action against an employee because the employee disclosed information that he or she reasonably believed showed a violation of law, gross mismanagement, gross waste of funds, abuse of authority, or a substantial and specific danger to public safety or health. In order to prevail on a claim, a federal employee must show that a protected disclosure was made, that the accused official knew of the disclosure, that retaliation resulted, and that there was a genuine connection between the retaliation and the employee's action.

Many states have enacted whistleblower statutes, but these statutes vary widely in coverage. Some statutes apply only to public employees, some apply to both public and private employees, and others apply to public employees and employees of public contractors.

Some statutes cover a broad array of circumstances, such as those that apply to federal employees that prohibit employers from dismissing workers in Reprisal for disclosing information about, or seeking a remedy for, a violation of law, gross mismanagement, gross waste of funds, abuse of authority, or a specific danger to public safety and health. Other statutes are narrow in scope, such as one that limits the protection of public and private employees to retaliation for reporting possible violations of local, state, or federal environmental statutes. A whistleblower statute may also limit protection to discussions of agency operations with members of the legislature or to disclosure of information to legislative committees or courts.

In whistleblower cases, states follow their general rules for determining whether a public policy Cause of Action exists in favor of the employee. Therefore, in states in which Wrongful Discharge actions must have a statutory (legal) basis, the case will be dismissed if the employer did not violate a statutorily enacted public policy. In many cases, the courts have refused to recognize a whistleblower's claim because no clearly mandated statutory policy has been identified. In addition, employees who blow the whistle on matters that affect only private interests (e.g., complaints about internal corporate policies) will generally be unsuccessful in maintaining a cause of action for discharge in violation of public policy.

Under the federal False Claims Act, any person with knowledge of false claims or fraud against the government may bring a lawsuit in his own name and in the name of the United States. As long as the information is not publicly disclosed and the government has not already sued the defendant for the fraud, the whistle-blower, who is called a relator in this action, may bring a False Claims Act case.The relator files the case in federal court under seal (in secret), and gives a copy to the government. The government then has 60 days to review the case and decide whether it has merit. If the government decides to join the case, the case is unsealed, a copy is served on the defendant, and the government and the relator work together in the case as co-plaintiffs. If the government declines to join the suit, the relator may proceed alone. In a successful False Claims Act case the relator will receive at least 15 percent but not more than 25 percent of the proceeds of the action or settlement of the claim, depending upon the extent to which the person substantially contributed to the prosecution of the action.

In the early 1990s, commentators were claiming that men were more likely than women to blow the whistle on improper conduct. Some analysts suggested the reason for this perception was that men seem to seek financial gain for whistleblowing. During the early 2000s, however, a number of women became involved in high profile acts of whistleblowing—for reasons other than fame and fortune.

In 2001, Sherron Watkins, a vice president at Enron Corporation, informed the company's board that Enron's accounting practices were improper. Enron later suffered a major collapse—largely as a result of its accounting practices—that led to the company's Bankruptcy and to the indictment of the company's auditor and chief financial officer. The following year, Cynthia Cooper, an auditor with WorldCom, told the company's board that WorldCom had covered up major losses of $3.8 billion through false bookkeeping. Like Enron, the accounting failures led to WorldCom's bankruptcy. During the same year, Coleen Rowley, an FBI staff attorney for more than 20 years, sent a letter to FBI director robert mueller, indicating that the FBI's national headquarters had mishandled an investigation of Zacarias Moussaoui, who was later believed to be a co-conspirator in the September 11, 2001, terrorist attacks. Rowley later spoke before the intelligence committees of the House of Representatives and the Senate about her accusations.

Time magazine dubbed 2002 the "Year of the Whistleblower," and named Watkins, Cooper, and Rowley as its "Persons of the Year." Their stories fueled the observation that women are more likely to become whistleblowers not for the potential for fame and financial gain, but out of a sense of duty. Although Watkins, Cooper, and Rowley were each subjected to rather harsh treatment by their respective employers following their disclosures, they became national celebrities by "speaking up when no one else would."

Further readings

Callahan, Elletta Sangrey, and Terry Morehead Dworkin. 1992. "Do Good and Get Rich: Financial Incentives for Whistleblowing and the False Claims Act." Villanova Law Review 37.

Helmer, James B. 2002. False Claims Act: Whistleblower Litigation. 3d ed. Charlottesville, Va.: LexisNexis.

Kelly, James. 2002. "The Year of the Whistle-Blowers." Time (December 30).

Whistleblowing: A Federal Employee's Guide to Charges, Procedures, and Penalties. 2000. Reston, Va.: Federal Employees News Digest.

Cross-references

Employment at Will; Employment Law.