Originally published in NAVEX Global's Top 10 Ethics & Compliance Trends for 2019 eBook.
Can your chief compliance officer be a whistleblower? How about your in-house legal counsel or HR representative? More specifically, is someone a whistleblower when they raise concerns that are a part of their defined job responsibilities? Similarly, are the activities they engage in each day protected within the legal definition that safeguards whistleblowing employees?
Is someone a whistleblower when they raise concerns that are a part of their defined job responsibilities?
We’ve seen a handful of cases on this issue, and received court rulings that stand divided on the exact line between whistleblowing and protected activity. Some believe that you never step out of your role as an HR or compliance professional and therefore never engage in protected activity. Other rulings indicate protected activity is entirely circumstantial. In either case, compliance programs need to be attuned to this trend, and ensure they know the signs of a potential whistleblower, especially when within one of their corporate governance departments.
Courts Divided on Protected Activity
Let’s take a look at two cases that better represent this debate.
Our first example comes in the form of retaliation protection granted by the United States Court of Appeals for the Eleventh Circuit. Here, an HR representative at a major manufacturer filed an unlawful termination claim against her company after repeatedly complaining about unfair treatment of women and minorities in the workplace. While in her HR role, the defendant recommended another employee to file suit as well, after that employee came to her for advice. The company argued that HR employees cannot engage in protected activity, and subsequently fired the rep.
The court did acknowledge that generally HR employees do not engage in protected activity when they encourage others to pursue claims externally.
The court disagreed, ruling that the individual was protected from retaliation because her superiors ignored her repeated complaints. The court did acknowledge that generally HR employees do not engage in protected activity when they encourage others to pursue claims externally. However, given the unique circumstances of this case, they made an exception. A blistering dissent labeled the decision “a land mine that we have now laid for employers.”
Our second example comes from the United States Court of Appeals for the Third Circuit. Here, a former university vice president and budget officer was asked to report a budget “swing” showing a multi-million dollar deficit when the books actually indicated a multi-million dollar surplus. The former VP made several efforts to compel her management to report accurately, including presenting her findings to the university’s budget committee, but to no avail. The university would later allow her employment contract to expire, claiming the employee was not the right “cultural fit.” This led to a retaliation claim from the former VP based on her right to free speech under the First Amendment.
In this case, the court ruled in the defendant’s favor saying that her right to free speech did not apply under her circumstances. Because her budgetary concerns were part of her job, her report was made not as a private citizen, but as a public employee and therefore unprotected.
These opposing rulings on fairly similar cases leave a big question mark for organizations. There are, however, a few things every organization should be doing as we wait for more clarity on this issue.
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Key Steps for Organizations to Take
Err on the Side of Complaints
If something sounds like a whistleblower compliant, and smells like a whistleblower complaint, there is a good chance it is, even if the reporter sits in your HR, compliance, risk or legal department. Organizations should apply additional sensitivity to employees who are tasked with remediating problems in the company and repeatedly complain that a specific issue is not being resolved. Furthermore, employers should consult counsel before administering any adverse action against such an individual as this can engender a claim of retaliation.
Take Every Concern Seriously
Any concern that arises through an investigation should be taken seriously. This should be standard whether the protected activity of the reporter is ambiguous. Ensure every investigation follows pre-planned protocols and is well documented. When an unexpected complaint occurs, following standardized procedures is best for swift internal resolution or strong external defensibility.
Offer Strong Reporting Mechanisms
All whistleblower complaints are best managed when organizations have multiple channels in place for employees to report problems. Accessible and well-communicated internal reporting mechanisms help all employees feel comfortable bringing up issues. Incident reporting channels also let organizations know when they are receiving a formal complaint that needs to be documented and investigated.
Effective policies and procedures are essential to ensuring that all employees understand what is expected of them as well as their reporting options. Having the right policies is just the first step. Organizations need effective communication campaigns that make all employees aware of the policies, as well as the organization’s commitment to supporting a speak-up culture.
The characteristics of whistleblowing and whistleblowers are ever-changing, but the importance of cultivating a strong culture of speaking up as well as listening up will remain constant. That is how we create resilient workplace cultures that protect your people, reputation and bottom line.