Best Practices in Whistleblower Law

Whistleblowers can play a powerful role in challenging corruption, transnational crime, and environmental destruction. In 2003, the crucial role of whistleblowers, and the need for whistleblower protection, was recognized as a part of international law when the United Nations adopted the Convention Against Corruption. This Convention was signed by 140 nations.

At the national level, there has been a growing global interest in establishing whistleblower laws. Whistleblower protections have been enacted in at least 59 countries. However, many laws still fall short of supporting effective whistleblowing. Below are the four key elements of the most successful whistleblower laws:

1. Whistleblowers can keep their identities confidential

A key protection in many laws is the right of whistleblowers to keep their identities confidential when providing evidence of wrongdoing to the proper authorities.

Preventing those accused of wrongdoing from learning the identities of whistleblowers is one of the best ways to ensure that the whistleblowers will not be retaliated against for their disclosures. Learn more about the importance of confidentiality here.

2. Whistleblowers are encouraged to help with prosecutions by offering financial rewards in the event of a successful outcome

Prosecutors regularly praise financial awards because they are proven to encourage whistleblowers to step forward. The best whistleblower laws provide a statutory guarantee that whistleblowers will receive a percentage of monetary sanctions recovered by prosecutors thanks to their disclosures.

A variety of powerful U.S. laws provide financial incentives for whistleblowers to report evidence of wrongdoing, with the amount of rewards tied to how much the whistleblower contributed to the success of prosecutions. Examples of these reward laws are:

  • The False Claims Act, which requires payment to whistleblowers of between 15 and 30 percent of the government’s monetary sanctions collected if they assist with prosecution of fraud in connection with government contracting and other government programs;
  • The Dodd-Frank Act, which requires payment to whistleblowers of between 10 percent and 30 percent of monetary sanctions collected if they assist with prosecution of securities and commodities fraud; and
  • The IRS whistleblower law, which requires payment to whistleblowers of 15 to 30 percent of monetary sanctions collected if they assist with prosecution of tax fraud.

Crucially, these programs are not limited to only U.S. citizens. Whistleblowers around the world can report under a range of U.S. laws and receive financial rewards as long as the violation in question has a U.S. nexus or violates certain U.S. laws with transnational applications.

Since 2011, law enforcement agencies implementing these programs have collected a staggering $34.7 billion for the benefit of taxpayers and investors and paid nearly $6.5 billion in rewards to whistleblowers. Learn more about the importance of rewards here.

3. Whistleblowers are guaranteed remedies for retaliation

When an individual or organization learns the identity of a whistleblower reporting evidence of their wrongdoing, they often will take retaliatory actions to discredit or otherwise punish the whistleblower. This is especially common when the accused has leverage over the whistleblower in the workplace. To deter these reprisals, the best whistleblower laws offer a host of remedies once retaliation has been proven, including:

  • Back pay (wages and benefits lost as a result of being unlawfully terminated)
  • Reinstatement to the whistleblower’s former job
  • Front pay (wages and benefits to cover the time needed to find a new job)
  • Out of pocket losses (e.g., the costs of finding a new job)
  • Damages for pain and suffering
  • Punitive damages
  • Attorney’s fees and court costs

However, it is important to note that while some of these remedies are available in administrative proceedings, many of them can be won only through legal action in a federal or state court. Court access thus is also an essential feature of successful whistleblower laws.

4. Whistleblowers can report through independent reporting channels

Many whistleblower laws provide detailed reporting procedures for whistleblowers to ensure that their claims of abuse of power are heard and addressed by a neutral arbiter. The strongest whistleblower laws establish offices, such as the Office of the Whistleblower at the U.S. Securities and Exchange Commission in the United States, that are specifically designed for receiving and investigating whistleblower disclosures.

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