In the United States, there are dozens of laws at the federal, state and local levels that offer protections and rewards for whistleblowers. This complex legal framework is the leading influence on whistleblower laws around the globe, which continue to rise in adoption and popularity, and a recent OECD report confirms its success. In December 2020, the OECD Working Group released its Phase 4 Report on the state of international anti-corruption and anti-bribery enforcement, complimenting the success of U.S. laws and stating that these laws have been successful at cutting down corruption.
Below are five key elements of the most successful U.S. laws.
1. Helping whistleblowers 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 perhaps the best way of ensuring that the whistleblowers will not be retaliated against for disclosures that benefit society. The confidentiality protections do not apply in every situation and, even when they apply, the accused individuals are sometimes able to infer the identity of the whistleblower based on the evidence given to them. Nonetheless, whistleblower programs often provide critical safeguards of whistleblowers’ identities.
2. Encouraging whistleblowers to help with prosecutions by offering financial rewards
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 $30.6 billion for the benefit of taxpayers and investors and paid $4 billion in rewards to whistleblowers. Learn more about the importance of rewards here. However, some critique reward laws out of fear that they incentivize frivolous lawsuits or undermine motivations for coming forward. These concerns have not proven to be true. Learn more about these and other common debunked whistleblower myths here.
3. Empowering citizens to challenge fraud on the public’s behalf
Under the federal and state False Claims Acts, whistleblowers are empowered to file a “qui tam” lawsuit. “Qui tam” is a legal doctrine that allows a private citizen to step into the shoes of the government and represent the public in recovering monies owed. If the government steps into (“intervenes in”) the case and takes over prosecution, the whistleblower (called the “relator”) may receive an award between 15 to 25 percent of what the government recovers. If the government declines to join the qui tam lawsuit and the relator proceeds against the defendant anyway, the reward for successful prosecution increases to 25 percent to 30 percent of what the government receives.
4. 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, whistleblowers 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
Although 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. Given the gaps in many whistleblower protection laws, whistleblowers often are unable to secure a fair remedy despite providing evidence of reprisals, and those who carry out reprisals often are allowed to stay in their jobs with no adverse consequences. Stronger protections are needed to provide justice for whistleblowers who have been retaliated against and to ensure that retaliation is deterred in the future.
5. Unbiased decision makers
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. Following these procedures, including filing deadlines, is essential both to ensure a fair hearing of the claims against the wrongdoer as well as to secure anti-retaliation protections and rewards. Hiring a qualified whistleblower attorney is advised to ensure that rights are secured.
Even when whistleblowers following procedures as required, the procedures do not consistently work as intended. The Whistleblower Protection Act, for example, requires federal whistleblowers to bring cases before the Merit Systems Protection Board (MSPB), which Congress intended to serve as a neutral arbiter of their claims. However, due to a lack of a quorum, the MSPB has a backlog of over 2,000 cases. Moreover, over 95 percent of cases considered by MSPB are decided against the whistleblower. Given this inaction and apparent bias, supervisors presumably feel empowered to retaliate knowing that the whistleblowers will have no substantive redress. Timely and meaningful action by unbiased decision makers is critical to the success of any whistleblower program.