Whistleblower Hotlines FAQ

Whistleblowers should beware company “hotlines.”

Published on June 06, 2020

Q: What are company whistleblower hotlines?

A: In 2002, the Sarbanes-Oxley Act mandated that audit committees at publicly traded companies create internal procedures for whistleblower complaints, often referred to as hotlines.

Q: Do company whistleblower hotlines protect employees from retaliation?

A: Whistleblowers should be wary of company hotlines. While hotlines often promise confidentiality or anonymity, companies may still be able to identify the employee based on the complaint, and employees who report their concerns internally are often not protected from retaliation. In the past, employers have asserted that employees using internal channels are not protected. In fact, companies have successfully argued in court that they can fire at-will employees for reporting to their company hotline. Whistleblowers should remember that hotlines exist to benefit the company, rather than the individual reporting misconduct.

In February 2018, in Digital Realty Trust v. Somers, the Supreme Court held that whistleblowers who report potential securities fraud first to supervisors or internal channels are not protected from retaliation. To be protected from retaliation under the Dodd Frank Act, whistleblowers reporting securities fraud must report first to the Securities and Exchange Commission. Although this ruling only applied to the Dodd-Frank Act, the precedent could be applied to other laws that do not specifically protect internal reporting. The National Whistleblower Center is currently working to persuade Congress to reverse the Digital Realty decision to ensure that whistleblowers using company hotlines and other internal channels are protected against retaliation.

Q: Do corporate compliance departments protect employees from retaliation?

A: No. Company lawyers are required to act in the best interest of the company, not the whistleblower. Company lawyers who receive whistleblower complaints are not obligated to report those complaints to the government. In the past, company lawyers have used attorney-client privilege to hide evidence of whistleblower reports.

Q: Should I report misconduct inside my company to my company’s whistleblower hotline or corporate compliance department?

A: You should consult a whistleblower attorney before making any internal disclosures.

Q: Should I report to a government hotline?

A: There are several government hotlines for reporting fraud, waste, and abuse. However, it is important for whistleblowers to know the specific procedures and requirements for different whistleblower programs before reporting. Consulting an attorney to learn your rights is the first step a whistleblower should make.

Q: How can I get help?

If you need help finding an attorney, visit Resources for Locating an Attorney.

For additional information on whistleblower hotlines and talking with company lawyers, please read Rules 17 and Rule 18 published in The New Whistleblower's Handbook: A Step-by-Step Guide to Doing What's Right and Protecting Yourself (Lyons Press, 2017), the first-ever consumer's guide to whistleblowing. It contains twenty-five clear and comprehensive rules that fully explain the how to effectively blow the whistle.

Please read the FAQ disclaimer.

The material in this FAQ may not reflect the most current legal developments. The content and interpretation of the law addressed herein is subject to revision. We disclaim all liability in respect to actions taken or not taken based on any or all the contents of this website or in this FAQ. Before acting on any information or material in this web site, we strongly recommend you review these resources.

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