What Is a Whistleblower?

You've probably heard about famous whistleblowers in the news. Or maybe you've even seen a movie about one or two who made history. A whistleblower is a person who reports unsafe or illegal activity within their company or a government agency.

Whistleblowers aren't always famous. But they play an important role in holding companies and governments accountable for wrongdoing. Read on to learn about the laws protecting whistleblowers.

The Birth of U.S. Whistleblower Laws

Whistleblower laws got their start during the Civil War. President Abraham Lincoln signed the False Claims Act (FCA) into law in 1863. This was because suppliers of goods to the Union Army were defrauding the military.

The FCA included whistleblower or qui tam provisions that encouraged private citizens to bring lawsuits against individuals and companies who were defrauding the government. If successful, the whistleblower could receive a percentage of whatever the government recovered.

The FCA is still in effect today, although it has changed over the years. Other federal, city, and state whistleblower laws now exist to protect whistleblowers from employer retaliation. Common law doctrines may also protect you.

Types of Wrongdoing

Whistleblower cases cover virtually any kind of illegal activity, not just fraud against the government. They include activities that risk public health or safety. They also include reporting sexual harassment.

Most FCA claims involve fraud. The fraud can be related to military contractors, health care (Medicare and Medicaid), and other government spending programs. Other common claims involve reports of violations against environmental laws, securities laws, and tax law. Examples include:

• Companies illegally dumping toxic waste
• Defense contractors selling faulty equipment to the military
• Financial organizations committing accounting fraud

Whistleblower Protection

Whistleblowing can be a daunting task. Whistleblowers help prevent and end unlawful and fraudulent activity. But whistleblowers often fear reprisals. As a result, legal protections are in place to safeguard whistleblowers. This means that your employer can't take adverse actions against you for disclosing information that shows fraud, gross mismanagement, abuse of authority, a violation of law or executive order, etc.

For example, the False Claims Act protects whistleblowers who report fraud committed against the government. Workers who "blow the whistle" can't be fired, demoted, or suspended. They also can't be threatened, harassed, or discriminated against under the federal law.

Another important law is the Whistleblower Protection Act. It protects federal government employees. It also covers former federal employees and federal employment applicants (executive branch only). They are protected if they report misconduct by the federal government.

Looking at state law, New York lawmakers expanded whistleblower protections for private sector workers in 2022. Workers' sexual harassment complaints were added to the list of protected whistleblowing activities. Lawmakers also expanded the types of workers who can claim protection. They now include independent contractors and former employees.

What's Not Protected

Whistleblower laws protect those who come forward. But there are situations and activities that may not be covered. For example, the Whistleblower Protection Act protects federal government employees, but it doesn't protect:

• Political appointees
• Uniformed military service members
• U.S. postal service employees
• The FBI
• Some members of the intelligence communities
• Certain others

Also, the release of some information under the WPA doesn't qualify for whistleblower protection. Disclosing information designated as outside lawful channels is illegal. Doing so could result in criminal prosecution.

Some whistleblower protections require the whistleblower to first report their concerns through specified internal channels or to specific regulatory bodies. Failing to follow these prescribed steps may result in the loss of protection. For example, the Dodd-Frank Wall Street Reform and Consumer Protection Act provides significant protection for whistleblowers. But if the wrongdoing involves the U.S. Securities and Exchange Commission (SEC), the wrongdoing must be reported to the SEC or the protections don't apply.

The U.S. Supreme Court ruled in February 2018 that whistleblower protections don't cover a fired employee who reported an alleged securities law violation to his employer but not to the SEC. In a unanimous decision, the justices held that the anti-retaliation provisions only cover individuals who report matters to the SEC.

So, it's important to consult relevant whistleblower laws. Protections vary, and exceptions exist. You may need legal advice from whistleblower attorneys. They can help you understand whistleblower protections and how they apply to your situation.

Retaliation

Retaliation happens when an employer or one of its agents, like a manager or supervisor, takes action against you for coming forward. Adverse action can take many forms. It can include:

• Employment termination
• Demotion
• Denial of promotion or benefits
• Reductions in pay
• Denial of overtime
• Failure to hire
• Threats and intimidation
• Unfavorable personnel action, such as warnings or poor evaluations

Retaliation generally doesn't include petty slights or small annoyances. It also doesn't include insignificant punishments, according to the EEOC.

How To Qualify for Whistleblower Protection

To get whistleblower protection, you must believe in good faith that an organization is breaking the law. Or, you can have a "reasonable belief." Good faith means that you're acting under an honest belief that the conduct is unlawful or dangerous. A reasonable belief means that equally knowledgeable colleagues would agree with the whistleblower.

Both the WPA and the 2022 expansion of New York state whistleblower law only require a “reasonable belief."

Both standards mean that if you are mistaken in what you're disclosing, you'll be protected from reprisals.

Recovery

Whistleblowers generally receive anywhere from 10% to 30% of the financial recovery. The largest whistleblower award in an SEC case was $279 million. One of the largest whistleblower awards under the FCA was $266 million.

If you prevail in a whistleblower retaliation lawsuit, you can recover damages such as:

• Reinstatement
• Lost wages, including front pay and back pay
• Special damages, such as emotional distress, mental anguish, and impairment of reputation
• Reimbursement for attorney's fees

Get Help With Your Whistleblower Claim

You may be thinking of exposing wrongdoing by your company or government agency. Or your employer may have retaliated against you for doing so. Whistleblowers provide a vital service. They hold organizations and governments accountable. But whistleblowing can be confusing and stressful. Whistleblower protection laws vary. Legal advice can help you understand your rights. Seek help by contacting a local whistleblower attorney.