What Exactly Is “Whistle Blowing” In Employment Law?

Whistleblowing is a legally protected practice allowing employees to come forward and disclose information about illegal, unethical, or unsafe practices within an agency or organization. In California, employees are strongly encouraged to report any suspicions of their employer breaking federal, state, or local laws or regulations. This practice helps prevent corruption, fraud, and other forms of misconduct.

Employees must report to the relevant government or law enforcement agency, as well as to their supervisor or another employee who has the authority to investigate, find, or correct the issue. Additionally, they are highly encouraged to cooperate with and provide testimony to public bodies conducting investigations, hearings, or inquiries.

Whistleblowers are essential in enforcing laws and fighting crime, as they are often the first to uncover and disclose fraud cases. Government personnel, business insiders, and others with first-hand knowledge of wrongdoing frequently bravely come forward to expose crimes that would otherwise go unpunished, even while doing so puts their personal and professional lives in jeopardy.

What Is “Whistleblowing”?

In employment law, whistleblowing occurs when an employee reveals unlawful, unethical, hazardous, or fraudulent behavior in the workplace. Whistleblowers have various options for reporting such misconduct using internal or external channels. More than 83% of whistleblowers prefer to report concerns to managers, human resources, compliance, or an unbiased third party inside the organization.

The term also applies to federal employees who expose unlawful or unethical acts that damage the public trust. Common forms of workplace misconduct include fraud, disregard for safety protocols, abuse of government contracts, bias, and retaliation. Whistleblowing is an effective tool for defending the public interest, enhancing accountability, promoting justice, and upholding ethical standards.

In this hypothetical situation, a manufacturing worker discovers many safety breaches contrary to Occupational Safety and Health Administration (OSHA) laws. The worker decides to blow the whistle on these infractions. The factory terminates the worker’s employment as retribution for reporting their misdeeds. After informing OSHA of the breaches and attempting to rectify the safety circumstances at the business, the employee may choose to include facts such as his termination of employment with the manufacturer in his complaint.

While many groups take whistleblowing seriously, others focus on specific parts of the issue. For example, the Securities and Exchange Commission (SEC) focuses on violations of financial laws, while OSHA is primarily concerned with workplace safety and environmental violations. Many agencies allow you to remain anonymous and offer many ways to submit information.

In some cases, a reward may be given to a whistleblower. In cases where the money was recovered by a government agency, state, or political subdivision, the whistleblower can expect to receive 15% to 33% of the total amount. However, if the whistleblower resolves the case independently of any involvement from these entities, they can expect to receive 25% to 50% of the total amount. For example, in 2023, the SEC received over 18,000 tips and awarded nearly $600 million to 68 whistleblowers — an average of almost $9 million per payment.

The Whistleblower Defined

The term “whistleblower” refers to individuals who come forward to expose wrongdoing when they perceive it to pose a severe threat to the organization or the public. Their crucial role in highlighting misconduct helps ensure organizational accountability, bringing unethical or illegal actions that might otherwise go unnoticed to light.

While “whistleblower” is often associated with those who reveal corruption in government or large corporations, the term encompasses a broader range of individuals.

So, who qualifies as a whistleblower?

Whistleblowers can include employees at all levels of an organization, from entry-level workers to executives. Additionally, consultants and personal service contractors can be classified as whistleblowers if they disclose information about misconduct. Furthermore, individuals who may not be directly employed by a company, such as vendors or suppliers who observe wrongdoing within an organization, can also be regarded as whistleblowers.

Several laws and initiatives, such as those from the SEC, OSHA, and the Sarbanes-Oxley Act, protect whistleblowers from retaliation. The 1989 Whistleblower Protection Act provides exceptional protection for federal employees.

They can report misconduct to company leaders or regulatory bodies, especially when the wrongdoing involves high-level executives. However, whistleblowers often encounter challenges such as reprisal, social isolation, and emotional strain. They must understand their legal protections and seek legal advice if they observe criminal or corrupt conduct at work.

How Effective Is Whistleblowing?

Research by PricewaterhouseCoopers in 2007 found that whistleblowers were responsible for uncovering 43% of fraud in private firms, significantly more than the 19% discovered by professional auditors. The study found that whistleblowers significantly saved shareholders billions.

A 2006 study from the University of Chicago Booth School of Business further supports employees’ crucial role in identifying fraud. Fraud can rarely, if ever, occur without the knowledge and assistance of multiple employees. However, while some may be complicit, most are likely unaware of the deceptions occurring.

A robust legal framework that provides incentives and protection can ensure people feel safe reporting misconduct. Recently, there’s been a worldwide increase in laws and rewards aimed at encouraging individuals to expose corruption, fraud, and misuse, highlighting their effectiveness.

By 2020, over 59 countries, including the United States, have enacted laws to safeguard whistleblowers. However, these protections vary by country. Although many of these laws offer significant protections and motivations for whistleblowers to come forward, only a few are comprehensive enough to fully shield those who report misconduct from retaliation.

In a 2014 Villanova Law Review article, Dr. Dennis J. Ventry from UC Davis and Chairman of the IRS Advisory Council highlighted the essential role of whistleblowers in deterring corporate misconduct. He emphasized that whistleblowers are vital in uncovering and preventing legal violations. Ventry argued that effective whistleblower programs increase the risk of detection and penalties for noncompliance, which, alongside moral, ethical, and reputational considerations, discourages illegal activities and enhances revenue collection.

Moreover, Professor Ventry, examining crime deterrence literature, highlighted that the probability of getting caught could quantify deterrence’s effectiveness. Echoing the insights of Nobel Prize laureate economist Gary S. Becker, he pointed out that the decision to commit a crime typically hinges on whether the expected benefits surpass the risks of detection.

The Benefits And Drawbacks Of Workplace Whistleblowing

Workplace whistleblowing plays a vital role in exposing misconduct and promoting accountability. However, it comes with significant risks for those who speak out. While it helps ensure organizations act ethically and in the public’s best interest, whistleblowers often face personal, emotional, and professional challenges.

To make a well-informed decision, you must carefully weigh the pros and cons of your actions.

Benefits Of Reporting Unethical Behavior At Work

Whistleblowing has several benefits for both the individual and society at large. Here are some of them:

• Retaliation Can Be Avoided — Whistleblowing offers numerous benefits, one of the most significant being the legal protection it ensures for those who come forward. Under the Whistleblower Protection Enhancement Act and other regulations, whistleblowers cannot be demoted or fired for coming forward, even if their claims are untrue. This protection addresses sensitive issues like personnel actions and security clearances.
• You Could Get Paid — In certain situations, Whistleblowers may receive monetary rewards for exposing wrongdoing. For example, a whistleblower who reports Medicare fraud could be eligible for a payment of up to 30% of the funds recovered in a qui tam case. In a qui tam action, a realtor (in this case, the whistleblower) files a suit for the government against a person or company. The government is the plaintiff; if successful, the realtor receives a portion of the award.

Laws like the Dodd-Frank Act and the False Claims Act offer significant rewards to individuals who provide information that leads to successful legal action, especially in fraud cases. A free case evaluation with qualified employment lawyers can help determine whether your situation qualifies.

Drawbacks Of Reporting Illegal Behavior at Work

While whistleblowing can be important, knowing its potential negative aspects is crucial before deciding to come forward.

• Retribution By Employer — Even though it’s illegal, some employers may retaliate against whistleblowers. This could include unfair dismissal, changing job duties, or creating a hostile work environment. Remember, a retaliation complaint is separate from a whistleblower claim. You can consider filing a retaliation claim if you believe you’ve faced retaliation for reporting misconduct. For guidance, you may want to consult a knowledgeable employment attorney.
• Possible Negative Impact On Professional Life — Legal safeguards do not entirely erase the professional repercussions of blowing the whistle. After being labeled a whistleblower, it can be challenging to find new opportunities, especially in industries where personal relationships matter. It may become more difficult to advance in your career or even secure a job, as some employers may perceive you as a liability to their organization.
• Potentially Damage to Your Relationships — Conflicts with coworkers can emerge when someone decides to blow the whistle. If your colleagues perceive your choice as a betrayal of trust, it can create significant tension in the workplace. Additionally, enduring a lengthy investigation alone can be challenging, especially if you hope to continue working in the same environment.

Whistleblower Complaints That Law Protects

In California, whistleblower laws protect employee rights by encouraging reports of misconduct without fear of retaliation. These laws aim to create a safe work environment for employees to address unethical practices or legal violations. So, is whistleblowing retaliation a crime? Under the law, it is. The following are some whistleblower complaints that are legally protected from retaliation:

Notifying Authorities Of A Crime

It is illegal for employers to retaliate against employees who report legal violations to their supervisor, human resources, management, government agencies, or the police. Additionally, businesses cannot punish workers who testify before a government agency conducting an investigation.

This whistleblower statute reflects the state’s firm public policy to encourage workplace whistleblowers to report unlawful acts without fear of retaliation, as emphasized by the California Supreme Court.

Refusing To Engage In Illegal Activity

California’s whistleblower law prohibits employers from retaliating against employees who refuse to engage in activities that could violate state or federal law. If you decline to engage in any activity you believe is unlawful, your employer cannot terminate you.

To establish a whistleblower case under this statute, you must demonstrate that you refused to conduct unlawful activity and that your employer dismissed you. Your attorney will need to provide evidence to prove this connection.

Reporting A Hazardous Work Environment

Ensuring a safe workplace is a top priority. Unfortunately, some companies prioritize making money over ensuring the safety and well-being of their employees. In California, workers are granted legal protections if they report a dangerous work situation. Your grievance could pertain to your safety, the safety of others, or risky procedures and work settings.

If you need to raise a concern, you can direct your grievance to your manager, HR, or supervisor, as these channels are protected under the law. Additionally, complaints can be filed with OSHA or any other regulatory agency responsible for worker safety.

The best approach is to submit a formal grievance in writing. Written complaints carry legal weight similar to informal verbal reports, but oral complaints can be more problematic to verify. If you face retaliation, such as termination, after reporting a safety issue, it’s essential to contact an attorney specializing in employment law right away.

Disclosing Risky Environments Or Patient Care

The majority of healthcare professionals prioritize patient safety. However, some in the medical field put revenue before patients and defy even the most fundamental protocols to keep them safe. In California, no employee can be fired for raising concerns about harmful conditions or patient safety, as outlined in the state’s Health and Safety Code.

If you’re a healthcare worker in an inpatient medical facility and believe your rights have been infringed, please reach out to our office. If an employee files a complaint regarding patient safety and is terminated within 120 days after submitting the filing, California law presumes that the employer has retaliated illegally. Whistleblowers in the healthcare industry benefit significantly from this solid legal protection, whether they’re doctors, nurses, or other medical professionals.

Reporting Your Company Is Withholding Financial Data To The Public

This law focuses on issues related to publicly listed companies. The public must be informed that these businesses maintain transparent and accurate financial practices. The primary legislation governing these disclosures, as well as protections for whistleblowers, is the Sarbanes-Oxley Act.

Employees can “blow the whistle” if they discover their employer is concealing or misrepresenting financial information.

Filing Reports On Fraudulent Government Claims

Medicare is a government-run health insurance program that manages payments to various healthcare providers. When healthcare facilities or doctors bill Medicare, they are seeking payment from the government. Unfortunately, these providers sometimes submit false invoices to get paid for non-existent treatment or padded costs. Employees who notice any discrepancies have the option to report them.

The government imposes penalties on any organization that submits fraudulent claims. This applies not only to healthcare providers and physicians but also to other related entities. Furthermore, if an employee learns that their employer is underreporting taxes to the IRS, they can file a qui tam claim on behalf of their company. Over the years, some qui tam cases in healthcare have led to settlements worth billions of dollars.

Legal Protections Against Retaliation For Whistleblowers

Whistleblowers play a vital role in fostering transparency and accountability in both business and government. The Occupational Safety and Health Administration (OSHA) oversees whistleblower protections across 22 laws, which help safeguard employees who report unsafe working conditions or regulatory breaches. Key statutes include:

• Occupational Safety and Health Act (OSH Act) —  Protects workers who voice safety concerns or engage in inspections.
• Surface Transportation Assistance Act (STAA) — Covers concerns about commercial vehicle safety and accurate recordkeeping.
• Asbestos Hazard Emergency Response Act (AHERA) — Supports reports of asbestos violations that can cause mesothelioma in K-12 educational institutions.
• International Safe Container Act (ISCA) — Protects those reporting unsafe cargo containers.
• Energy Reorganization Act (ERA) — Addresses nuclear safety concerns.
• Wendell H. Ford Aviation Investment And Reform Act For The 21st Century (AIR21) — Covers reports of aviation safety noncompliance.

Additional protections exist under laws like the Sarbanes-Oxley Act for exposing fraud and the Affordable Care Act against discrimination in health coverage. Other vital acts focus on environmental safety and maritime concerns. Agencies like the Wage and Hour Division and the Mine Safety and Health Administration enforce anti-retaliation protections.

Wrongful Termination Under California Law

In California, employment is mostly “at will,” allowing employers to terminate workers for any reason. However, there are important exceptions to safeguard employees who report illegal or unethical actions. This public-policy exception, established in Tameny v. Atlantic Richfield Co., also protects those who refuse to participate in unlawful activities.

California employees have two years to file wrongful discharge claims, which can result in compensation for lost wages, benefits, emotional distress, and, potentially, punitive damages. Protected actions include whistleblowing, declining to sign illegal agreements, assisting in governmental inquiries, refusing unsafe work, and revealing wage information.

Persons Qualified For Whistleblowing Protection

Under the California Labor Code, employees are considered a protected class. This includes anyone working for public or private employers, such as state agencies and local governments.

Employers are prohibited from creating rules that hinder whistleblowing, and they cannot retaliate against employees for reporting wrongdoing or refusing to engage in illegal activities. This protection also extends to past employment. If an employer retaliates against a whistleblower, they may have to reinstate the employee, compensate for lost wages, and take other necessary actions to comply with the law.

How To Safeguard Yourself While Still Employed

If you decide to stay in your role during an investigation, consider these steps:

• Keep Records — Maintain a thorough log of the misconduct you’ve witnessed and any communication with management about your concerns.
• Stay Professional — Perform your job well to minimize any justification for termination.
• Know Your Rights — Familiarize yourself with your legal rights and seek legal guidance if you suspect they are being infringed upon.

Four Key Elements Of A Whistleblowing Complaint

The OSHA Online Whistleblower Complaint Form indicates that to file a whistleblower complaint with OSHA, four main points must be present:

1. The employee participated in a protected action (like reporting a law violation).
2. The employer was aware of or suspected of this activity.
3. The employer retaliated against the employee.
4. The employee’s protected action influenced the employer’s decision.

How An Employment Attorney Can Help

If you’re thinking about blowing the whistle, it’s essential to talk to a lawyer knowledgeable in employment law first. They can clarify your rights and guide you through the process.

• Understand Your Rights — An attorney will explain whistleblower laws and ensure you know your protections, helping you navigate your claim effectively.
• Assess Your Claim’s Validity — Legal counsel can confirm if your concerns qualify as a protected disclosure, especially concerning federal contracts or misconduct, and guide you on the next steps.
• Gather Evidence — Strong evidence is crucial for a successful case. A legal expert can help you collect and organize the necessary documents to support your claims.
• Identify Reporting Channels — It is essential to know where to file your report. An attorney skilled in labor law can advise whether to report internally, to your agency, or to an inspector general.
• Document Retaliation — If you face retaliation after reporting, an employment law specialist attorney can assist you in documenting changes in your job status and pursuing a fair resolution.

Strong Evidence To Back Your Complaint

To strengthen a whistleblower retaliation case, gathering solid evidence is essential, as employers often control relevant documents. Here are three fundamental types of evidence:

• Written Internal Complaint — Proving you engaged in protected activity is vital. A written complaint can demonstrate that the employer was aware of your whistleblowing, countering claims that your verbal report wasn’t made.
• Job Performance Evaluations — If you establish retaliation, the employer must show they would have taken the same action regardless of your whistleblowing. A recent positive evaluation can suggest the adverse action was retaliatory.
• Communications (Memos, Emails, Texts) — These could reveal the employer’s knowledge or intent regarding your whistleblowing. It’s important to keep copies of such messages stored safely for reference.

Collecting evidence is crucial for building a solid case, and hiring an employment attorney can significantly enhance this process. An attorney understands the importance of thorough documentation and how to gather and present evidence effectively. Their expertise strengthens your arguments and helps counter any opposing claims. By ensuring that all relevant facts are clearly established, an employment attorney can make a significant difference in the outcome of your case, guiding you through each step for the best possible result.

Frequently Asked Questions

What Compensation And How Much Can You Expect?

The compensation you can get depends on the details of your case, but it can include:

• Any unpaid wages.
• Legal and court expenses.
• Damages for pain and suffering.
• Compensation in whistleblower cases (qui tam claims).
• Potential punitive damages against your employer.

If you’re aware of illegal actions by your employer, it’s crucial to get legal advice right away. At Arash Law, we recognize the rights of whistleblowers under state and federal laws. Our team is dedicated to ensuring you are treated fairly by your employer and authorities.

Whistleblowers can receive financial rewards for reporting illegal activities by their employers. The reward is typically a percentage of the funds recovered by the government, but the amount varies depending on the type of case.

In qui tam lawsuits, if the government gets involved, the whistleblower may earn 15% to 25% of the recovery. If the whistleblower takes the case to court without government participation, they could receive 25% to 30%.

For whistleblower programs administered by the SEC or CFTC (Commodity Futures Trading Commission), rewards range from 10% to 30% of the recovered amount, but only if the recovery exceeds $1 million. Factors like the quality of information and assistance provided can influence the final reward.

How Can I Tell If I Have A Potential Whistleblower Case?

If your employer is involved in wrongdoing, you might be in a whistleblower situation. The best way to confirm if you have a valid case is to consult with an employment lawyer right away. Here are vital signs to consider:

• Observing Illegal Activities — If you see your employer committing unlawful acts — like fraud, discrimination, or safety violations — it may indicate a whistleblower case. Reporting these actions could help create a just work environment.
• Facing Retaliation — Experiencing negative consequences, such as demotion or termination, after reporting unethical behavior could signify a whistleblower case. Employers cannot legally punish employees for raising concerns about misconduct.
• Ignoring Policies — If your employer frequently disregards company rules or legal regulations, it may suggest the need for whistleblowing. This can include violations related to safety, labor laws, or discrimination policies, which could harm employees and the organization’s integrity.

What Makes Whistleblowing Right?

Whistleblowing in the workplace, while intimidating, is often essential for promoting integrity and accountability. Organizations that prioritize transparency support whistleblowing to maintain ethical practices. When misconduct is hidden, it undermines trust and allows harmful practices to continue unchecked. Whistleblowers help ensure these issues are addressed, creating a more transparent environment where wrongdoing is not tolerated.

How Do I Report Improper Or Illegal Acts At Work?

If you have details about potential breaches of state or federal laws or any fiduciary misconduct by a corporation or LLC toward shareholders, investors, or employees, get in touch with the California State Attorney General’s Whistleblower hotline at (800) 952-5225 or (916) 210-6276 if you’re in the Sacramento area. If your call is proven valid, it will be directed to the relevant authority for evaluation and investigation.

What’s The Difference Between A Complaint And Whistleblowing?

A complaint usually involves personal issues or grievances, like discrimination or harassment from a coworker. When an employee files a complaint, the focus is generally on resolving a specific problem that affects their work situation or immediate environment.

In contrast, whistleblowing highlights broader problems that affect more than just the individual. Whistleblowers expose systemic issues, such as corporate fraud, safety violations, environmental hazards, corruption, or illegal activities that pose a risk to others.

Can I Waive Or Release My Whistleblower Claim?

Whistleblowers often face a tough choice: sign a release that gives up their chance for a reward or give up severance pay. Employers frequently require this release to provide severance, but whistleblower rewards significantly exceed these payments, typically ranging from 15% to 30% of the government’s recovery.

Releases of whistleblower claims are generally unenforceable due to public policy, as courts recognize the potential harm to public interests. Whistleblower laws aim to encourage individuals to report fraud against the government by offering financial incentives. Even if someone has signed a release, legal precedents suggest that employers involved in government fraud may be unable to enforce it, depending on the circumstances.

If you still need to sign a release, proceed cautiously. Always consult an experienced employment attorney familiar with whistleblower laws before deciding, as signing a release can have profound implications.

Is There A Deadline For Filing A Whistleblower Case?

In California, whistleblower cases have specific deadlines, known as statutes of limitations. Here’s a quick overview:

• Labor Code § 1102.5 and Health & Safety Code 1278 — state that you have three years to file for whistleblower violations but only one year for civil penalties.
• False Claims Act — A qui tam lawsuit must be filed within six years of the violation.
• Fair Employment and Housing Act (FEHA) Retaliation Cases — Some require action within six months.

Consult an employment lawyer about these deadlines. Prompt action is essential, as delays can jeopardize your case.

Is A Whistleblower Allowed To Be Anonymous?

If you want to stay anonymous while filing a whistleblower claim, it’s best to consult an employment lawyer. According to the Securities Whistleblower Incentives and Protections, you can submit information anonymously as long as you follow these steps:

1. You need an attorney to help with your submission and potential award, and their contact details must be included when you file.
2. Your attorney will file on your behalf, following the guidelines in § 240.21F-9 – Procedures For Submitting Original Information, for anonymous submissions.
3. Before receiving any award, you must reveal your identity to the Commission, which will verify it.

What Distinguishes A Whistleblower Case From A Retaliation Case And A Wrongful Termination Case?

In California, whistleblower cases involve reporting company violations, refusing illegal actions, disclosing unsafe conditions, or raising concerns about the misuse of government funds. Retaliation cases focus on discrimination or harassment related to complaints about these issues. Wrongful termination pertains to unfair dismissal that breaches public policy and is established through case law, while retaliation and whistleblowing are defined by legislation.

Our Employment Lawyers Handle Your Case With Care And Integrity

Blowing the whistle can be challenging but ultimately rewarding, and speaking up fosters a more ethical workplace. Understanding the advantages and challenges of reporting misconduct to the federal government is essential to making informed decisions.

Talking to an attorney experienced in qui tam lawsuits can provide crucial support if you’ve noticed wrongdoing and feel compelled to act. With the proper guidance, you can protect your rights and potentially create positive change.

Our respected employment law attorneys are dedicated to empowering employees and fighting mistreatment. Companies should be held accountable for mistreating whistleblowers. Our legal team uses our expertise to assist individuals in various industries with claims related to discrimination, wrongful termination, and wage violations.

Businesses often have their legal teams. Choosing Arash Law gives you access to our extensive resources and strategies. Our dedicated legal team will level the playing field, ensuring that you are not at a disadvantage when facing larger organizations.

For more information about your rights as an employee, reach out to our skilled team at (888) 488-1391. We proudly assist clients across California with their whistleblower claims.