Who Are Whistleblowers and What Laws Protect Them?

Whistleblowers disclose waste, fraud, or other corporate wrongdoing either publicly or by skipping the chain of command and going through other than normal channels.

Whether whistleblowing employees are concerned about others, about personally being liable for failing to speak up, or are venting job frustration, they are bringing to the surface a problem that is already festering or may potentially be much more damaging if left unresolved.

Employees who are discharged for whistleblowing are increasingly suing their employers for wrongful discharge, alleging that the discharge violates public policy and thus constitutes a public policy exception to the general rule of employment-at-will that exists in most states. Under California law, even an employee who was merely disciplined for whistleblowing was permitted to sue his employer for damages.

Why laws exist in this area?

State law protections. Many states have whistleblower protection laws that protect employees from adverse actions on the part of employers such as disciplinary action, discharge or otherwise penalizing employees who:

disclose violations of state or federal law
publicly report activities that may or may not be illegal such as gross mismanagement, waste or neglect of duty
file complaints, participate in investigations or testify in administrative proceedings

Whistleblower laws in a specific state or local jurisdiction may address only public employees, only private employers or both. These laws also address civil and criminal penalties, damages, attorney's fees, fines and injunctive relief. Many states give some protection to whistleblowers through the courts. Be sure to check State Laws to see what protections apply in your state(s).

The Whistleblower Protection Act of 1989. Under the Whistleblower Protection Act of 1989, federal employees are protected from retaliation when they disclose waste and fraud by the federal government.

This law:

sets a simpler and fairer standard for whistleblowers in proving agency retaliation

gives the Office of the Special Counsel greater independence and autonomy to work for the benefit of the whistleblowers

strengthens employees' right to appeal their own cases to the Merit Systems Protection Board if the Office of the Special Counsel fails or refuses to do so; and

ensures whistleblowers increased procedural protections and guarantees of confidentiality

Sarbanes-Oxley Act of 2002. This corporate accountability law includes whistleblower protection provisions for employees of certain publicly traded companies who

provide information; or
assist in an investigation

regarding any conduct that the employee reasonably believes violates the Securities and Exchange Act, any rule or regulation of the Securities and Exchange Commission, or any federal law relating to fraud against shareholders.

In an early decision by an administrative law judge, an "employee of a publicly traded company" has been broadly defined to include all employees of every part of a publicly traded company. This would include employees of subsidiaries, and subsidiaries of subsidiaries that are subject to the publicly held company's internal controls and oversight of its audit committee, or that contribute information, directly or indirectly, to the company's financial reports. In other words, the whistleblower provisions of Sarbanes-Oxley appear to be broad enough to include employees of a non-publicly traded subsidiary, within and integral to, the corporate structure of a publicly traded company.

Consumer Product Safety Improvement Act. The Consumer Product Safety Improvement Act (HR 4040) was signed into law on August 14, 2008, by President Bush. Section 219, the statute's whistleblower protection clause, safeguards private-sector employees who raise objections to, or inform authorities about, violations of consumer product safety rules. Covered employers include manufacturers, importers, private labelers (owners of a brand or trademark on the private label of a consumer product), distributors and retailers.

The law prohibits employers from discharging or otherwise retaliating against an employee who provides, or is about to provide, to the employer, the federal government or a state attorney general information the employee reasonably believes relates to a violation, act or omission of the Consumer Product Safety Act or any other law enforced by the Consumer Product Safety Commission.

The law is enforced by the Occupational Safety and Health Administration. Remedies under the Act include reinstatement, back pay, restoration of benefits and other make-whole relief.

Other federal laws. In addition to the Whistleblower Protection Act, there are other federal laws that contain whistleblower protection provisions that protect employees in specific industries or in specific activities. Some of these laws include:

Clean Water Act
Depository Institution Employee Protection Remedy
Energy Reorganization Act
False Claims Act
Surface Transportation Assistance Act of 1982
Notification and Federal Employee Antidiscrimination and Retaliation Act of 2002

Federal regulations protecting whistleblowers. Separate federal regulations protect any employee of a defense contractor who discloses to a government official information that the employee reasonably believes indicates violations of federal procurement laws and regulations. The regulations protect these employees from discharge or discrimination with respect to the terms or conditions of employment because of the employee's disclosure.

Frst Amendment. While the First Amendment provides some protection to public employee speech, the U.S. Supreme Court ruled that First Amendment protections do not extend to a public employee's statements made pursuant to the employee's official duties (Garcetti v Ceballos (SCt 2006) 87 EPD ¶42,353). Rather, the constitutional protections apply only when an employee speaks as a citizen on a matters of public concern. Thus, the First Amendment, according to the Court, does not prohibit managerial discipline based on a public employee's expressions made pursuant to the employee's official responsibilities.

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