Gregory (Greg) Keating, Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s Boston office, was quoted in SHRM, in “New Law Rewarding Whistleblowers May Mean New Risks for Employers,” by Leah Shepherd.
Following is an excerpt:
Employers may face higher risks from lawsuits by whistleblowers in the future.
As part of last year's omnibus spending bill, Congress passed the Anti-Money Laundering Whistleblower Improvement Act, which increases rewards whistleblowers can receive. Whistleblowers now can personally collect 10 percent to 30 percent of any monetary sanction the government imposes over $1 million for money laundering.
"I anticipate a steady stream, if not a flood, of new claims by whistleblowers," said Gregory Keating, an attorney with Epstein Becker Green in Boston. "The amendments are clearly intended to enhance the monetary recovery [that] whistleblowers may be entitled to," he added. The whistleblower awards, "which are modeled on the U.S. Securities and Exchange Commission's [SEC] wildly successful whistleblower program under the Dodd-Frank Act, can often run into the millions or tens of millions of dollars. This has galvanized the plaintiff-side whistleblower bar and caused a flood of law firms to focus their efforts on whistleblowing, which has in turn resulted in a marked uptick in tips to the government."
A Sept. 13, 2022, policy statement from the Biden administration supported the new law, stating "Whistleblower protections are critical to promoting public accountability and integrity. If prospective whistleblowers do not expect to be protected, and instead fear job loss and further targeted punishment, they are deterred from raising concerns about misconduct, fraud, or corruption." …
In recent years, there has been "a growing trend at the federal and state level to broaden whistleblower rights, remedies and protections. Whistleblower protection enjoys bipartisan support in Congress," Keating noted.
Practical Steps for Employers
In light of the new law, employers should enhance their speak-up policies, examine their investigation protocols and invest in training, "especially of front-line managers who need to recognize the pivotal role they play in properly responding to concerns raised and avoiding retaliation," Keating said. …
Federal law prohibits employers from retaliating against whistleblowers for reporting legal violations, such as safety hazards, discrimination, fraud or money laundering. Examples of retaliation include threats, firing, demoting, disciplining, reducing pay, or reassigning someone to a less desirable position or schedule.
"More so than ever before, now is the time for employers to double down on compliance. With expanding legal risk and stepped-up penalties/remedies, we are likely to see a continued uptick in retaliation claims," Keating said. …
Be aware of any state or local laws that go beyond what federal law requires.
"States such as New York, Virginia and California have all substantially broadened protections against retaliation for whistleblowers in recent months. Employers must take note and take steps to double down on compliance," Keating said.
Federal law allows whistleblowers to disclose trade secrets or proprietary company information if it's necessary in reporting a violation to the government.
Employers often have the misperception that their policies concerning the confidentiality of company information prevent whistleblowers from removing confidential information and providing it to the government. Although employees do not have an unfettered right to remove confidential information because it potentially relates to whistleblowing activity, the SEC and other federal agencies have taken the position that whistleblowers have the right to disclose information relevant to reporting and investigating potential employer misconduct.
Don't assume that someone is not a whistleblower just because identifying compliance problems is a normal part of their job. For example, individuals with auditing and compliance duties may discover unlawful conduct, such as money laundering.
"It is often challenging for HR and employers to recognize or understand that an individual is engaging in a form of protected activity or whistleblowing when they are simply flagging concerns [that] are within their job responsibilities to remediate," Keating said. "Employers will need to pay closer attention and consider rolling out revised speak-up policies so they know when someone whose duty is to flag problems is, in fact, blowing the whistle."
