Protect your organization from whistleblower claims
Between the controversial Dodd-Frank rules and Sarbanes Oxley, whistleblowing has become a subject of public interest and media attention in recent years. While some laws (and whistleblowers) receive more attention than others, there are in fact dozens of substantive statutes with anti-retaliation provisions designed to protect employees who report non-compliance from adverse treatment. It should come as no surprise, then, that retaliation claims comprise 30% of the Maine Human Rights Commission's docket.
Like other types of employment litigation, whistleblower claims are expensive to defend. Unlike the typical discrimination claim, however, whistleblower claims are at heart retaliation claims, involving alleged cover-ups, circling-the-wagon behavior and/or conspiracies to punish those motivated to do the right thing. Whistleblower claims are particularly damaging because they threaten employee, shareholder, and general public confidence in an organization's ethical foundation.
Not every employee can bring a claim based on race, age, disability or religion. But every employee can be a whistleblower. In the face of such a large pool of potential claimants, how can employers manage their risk?
• Create a culture of compliance. Employees without trust in their organization are more likely to present their concerns outside the company, to a public body. Prove the company is committed to compliance through training, internal or independent audits and a code of conduct that is actually enforced. Encourage and reward internal complaints as a means of achieving compliance.
• Prescribe and communicate a process for raising and resolving all compliance-related concerns. While supervisors are often first to be approached by employees with complaints or concerns, some react defensively, dismiss employees' concerns without elevating them, or, worse, make statements or take actions that are perceived as retaliatory. To ensure complaints are heard, investigated and resolved, companies should consider appointing a single individual or group to receive, investigate and respond to compliance-related complaints. Clear procedures and thorough investigation ensure complaints do not slip through the cracks.
• Train supervisors and human resources to hear and respond to “dog whistles.” It can be very difficult to recognize truly protected activity, concerns expressed about unlawful practices or practices threatening health or safety, when it is buried in a mountain of other complaints about co-workers, the weather or what the cafeteria is serving for lunch. Many retaliation claims are premised on alleged whistleblowing activity that the employer failed to recognize and therefore consider. Whistleblower training will help supervisors and HR personnel recognize potentially protected activity by employees so it can be elevated and addressed.
• Wherever reasonable, create and enforce the expectation that employees will report compliance-related concerns. Employers should consider revising the job descriptions of employees, where appropriate, to make clear that they are expected, as part of their job duties, to report any and all unsafe or illegal activity.
• Carefully review employment actions affecting reporting employees. Like all employment law, timing is everything. When an employee receives a negative performance evaluation or is terminated within weeks of lodging a protected complaint, it might be natural to perceive a connection. The jury will, too, unless there is compelling evidence that the action was justified. Even where justification plainly exists, the organization must weigh the risk posed by a retaliation lawsuit and the potential publication of the employee's compliance-related concerns. Whistleblowers are not immune from consequences for their behavior or poor performance, but decisions impacting them should be conscientious and well thought out.
Katy Rand, a partner at the Portland law firm Pierce Atwood, specializes in employment law. She can be reached at krand@pierceatwood.com
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