Whistleblowing Laws
- Freedom to report corporate wrongdoing is an essential aspect of whistleblowing law.employment image by Marin Conic from Fotolia.com
Whistleblowers report threats to public health and safety, such as allegations of corruption, discrimination, fraud or waste. Whether they go to an employer, or seek a government watchdog's help, whistleblowers' rights are governed by a web of complex laws. How well the whistleblower fares depends on whether they're pursuing the appropriate legal remedy to protect the types of rights they're invoking. - Whistleblowing law began in 1863, when President Abraham Lincoln rolled out the False Claims Act to offer incentives for reporting fraud against the government. Congress revived the law in 1986, which now allows whistleblowers to share in 30% of the proceeds of a successful lawsuit. (See Reference 3)
- Passed in 1989, the Whistleblower Protection Act represented the next major evolution in case law dealing with the issue. The language made it illegal to retaliate against employees for disclosing waste and fraud, with the U.S. Office of Special Counsel delegated to prosecute such claims. Many states also offer their own specialized protections. (See Reference 1)
- Claiming federal or state whistleblowing protection requires knowing the relevant statutory language that may apply. For example, the Occupational Health and Safety Administration alone is responsible for 17 statutes that affect the aviation, cargo hauling, environmental, nuclear, pipeline and railroad industries. (See Reference 4)
- The Sarbanes-Oxley Act represented a significant overhaul of corporate fraud oversight.corporate greed image by Steve Johnson from Fotolia.com
Following the Enron, Tyco and WorldCom corporate scandals, Congress passed the Sarbanes-Oxley Act in 2002. One of the law's key provisions, Section 301, requires audit committees to take a hand in whistleblowing themselves, as well as reducing corporate fraud. The law also gave whistleblowing rights to employees of publicly-traded companies who report fraud. (See Reference 3) - Whistleblowing case timelines begin when an employee learns his employer will retaliate--not necessarily when the retaliation actually takes place. For this reason, employers of ten raise failure to comply with statute of limitations guidelines to defend against whistleblowing claims.