The exposing of a company’s unsafe, unethical, or illegal activities by an employee is known as whistleblowing. Employees who file “whistleblower” complaints with law enforcement or a regulatory agency are protected from retaliation by their employers under both state and federal laws.
For the purposes of whistleblower suits, retaliation includes any perceived adverse employer actions, including a demotion, failure to promote, or termination of employment. Employers charged with discriminating against whistleblowers can face significant fines, and even jail time.
The best prevention against a whistleblower suit is to carefully monitor the business practices of the company, to ensure that no illegal or unsafe conduct is occurring.
The most popular whistleblower suits involve alleged violations of safety or health codes, mismanagement of company finances, violations of government contracting laws, improper Medicare or Medicaid reimbursement policies, improper payment of customs duties, and shareholder fraud.
Ensuring proper business conduct by all branches and employees of the company is the easiest way to avoid whistleblower suits. Meticulous record keeping, compliance policies, and proper training programs should go hand in hand with constant monitoring of a company’s business practices.
Some federal whistleblower protections are set forth in the Sarbanes-Oxley Act of 2002, which strongly protects financial industry workers who “blow the whistle” on their employer’s allegedly engaged in securities, shareholder, or bank fraud.
Companies should be familiar with state whistleblower protection laws and other federal laws, such as the American Recovery and Reinvestment Act of 2009, or the Family and Medical Leave Act (FMLA), which provide additional whistleblower protections. Employees need only to act in “good faith” in filing their complaint to be protected under these state and federal laws.
Employers can often avoid a whistleblower suit by being responsive to employee concerns and complaints. Most employees will confront their employer directly about a potentially unsafe or illegal situation, prior to filing a complaint with law enforcement or a regulatory agency.
Companies should have well communicated policies in place for the proper handling of employee complaints. All credible complaints should be investigated, and corrective actions taken if needed.
Companies should avoid the appearance of any type of retaliatory behavior if a whistleblower contacts the police or another agency about alleged impropriety.
Some company actions that can be perceived as retaliatory include:
If a company has a concern about a potential whistleblower situation, the best course of action is to consult with an experienced legal professional who can assist the company in carefully handling the whistleblower complaint. This is especially important in those situations where a whistleblower has violated a company’s policies; or engaged in some misconduct unrelated to the whistleblowing, which would require disciplinary actions; or if the whistleblower becomes the subject of an independent investigation.
If a whistleblowing claim has been made against your company, the experienced employment lawyers at the MacMain Leinhauser can help you prepare the best defense. To schedule your free initial consultation today, call us at 484-318-7106 or contact us online. We serve clients throughout Pennsylvania from our conveniently located offices in West Chester.