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What happens when you learn about a potential whistleblower -- someone who's gone through an internal process to report wrongdoing? Do you tense up a little bit? Feel tempted to release the hounds? Want to circle the wagons?
Of course, you know that retaliating against a whistleblower can subject your company to penalties. Everybody does it, though. Ross Brooks, a partner with Sanford Heisler's whistleblower protection practice, told Inside Counsel that companies retaliate about nine times out of 10. Yet, there are ways to deal with whistleblowers that don't involve a pink slip.
Here are a few courses of action in-house counsel may want to consider:
A "whistleblower" only really becomes such if he or she reports outside the company. Before you do anything else, investigate the whistleblower's claim internally, suggests Scott Harris of McLane, Graf, Raulerson & Middleton. It could be that the employee misheard or misunderstood something. Of course, it could also be that actual legal violations are going on in the company. Harris says to keep it within the company at first, as "it is better to self-identify and correct than it is to have the government do it for you."
We're All Friends Here
Management is concerned with the bottom line, and part of that line includes not reporting wrongdoing to the government. The other part includes getting rid of people who do. But that's not an option; you could gamble on a whistleblower suit, but then you might lose, just like the University of California, Davis did to the tune of $730,000 when a nurse was fired after raising questions about human subject research at San Quentin State Prison.
Part of not retaliating is not having a work environment that resembles a Middle Earth battlefield. When an employee raises a concern, it's not time to send an army of orcs after him. At this stage, the employee isn't so much guessing who killed Mr. Boddy as he is asking a question. Becoming hostile an defensive only confirms that something dubious is going on, even if there isn't.
Openness Is a Long Game
Fostering a culture of openness is, of course, difficult, but it pays off in the long run. Inside's Counsel's No. 1 method for preventing whistleblowing is to encourage employees to communicate: "Employees who don't believe management is committed to compliance, and those who fear retaliation for bringing issues to light, are less likely to help the company solve its problems and more likely to take their complaints to Uncle Sam."
The easiest way to stop a lawsuit is to prevent it from happening in the first place. By fostering a "culture of compliance," you have employees who feel invested in the company, no government investigations, and that Maalox truck won't be making daily deliveries to your office.