The general opinion circulating about what makes up the average whistleblower seems to pool around the negative: i.e. disgruntled employees out to get revenge, traitors, money hungry individuals with no concern for the company’s well-being. Don’t whistleblowers fall into that group of people who are always fishing for the big payout? Those who will sue anyone and everyone in the hopes of striking it rich?
There are certainly individuals out there who meet these criteria, but let’s take a look at some general characteristics of successful whistleblowers and see if we can’t repair some of the false impressions that have developed over the years.
Cash Rewards for Whistleblowers are Rising
Folks around the nation are flocking to report knowledge of fraud. The Securities and Exchange Commission has received over 11,000 tips on securities fraud since implementing its whistleblower program in 2011. Around 3,620 whistleblower tips were reported to the SEC in 2014 alone, up 20% from 2012. This isn’t surprising considering the size of the rewards that result from a successful investigation. On September 22, 2014, the SEC awarded an individual whistleblower a $30 million cash award, more than double the previous record amount (1).
High-Performing, Loyal Employees
Looking at the data, the majority of whistleblowers are actively engaged, high-performing employees, most in prominent positions, supervisors or managers, with years of loyalty to the company (2). One in five whistleblowers are outside consultants or contractors hired by a company (1). More importantly, whistleblowers almost always go to the company first. 92% report company misconduct to a supervisor or manager before considering going outside and only 20% end up bringing their findings to a lawyer (3).
Financial Incentive is the Least Likely Motivator
Studies show that monetary incentive is the least likely motivator for whistleblowers to report their knowledge outside the workplace. 82% report their knowledge externally due to the serious nature of the crime. 76% report externally because the company faces further harm if they don’t. 65% decide to report misconduct to their lawyer after seeing no action taken from placing an internal report to their supervisor or manager. Only 43% report company misconduct externally for financial motivations (2).
Fear of Retaliation Increases External Reporting
Financial reward is indeed a powerful pull to report knowledge of fraud to your lawyer. But an even larger incentive for most reporters is the promise of protection against workplace retaliation (firing, demotion or harassment in response to pointing out misconduct). According to a University of North Carolina Study, the primary reason for reporting fraud outside of the workplace is fear of retaliation (4). One in five whistleblowers are subjected to workplace retaliation after reporting misconduct internally and one in three people choose not to report internally for fear of retaliation (3).
Despite the fact that federal and state regulations require places of business to have an internal compliance program encouraging individuals to report knowledge of fraud internally without fear of retaliation, that fear is still present. The government provides strong protections against retaliation, including the Anti-Retaliation provisions provided by the False Claims Act, and whistleblowers are able to file separate claims to collect damages for workplace retaliation, including position reinstatement, back pay with interest and attorney’s fees.
Our nations’ whistleblowers recover billions of taxpayer dollars annually, dollars that would otherwise end up in the pockets of fraudsters, paying for increased salaries, new cars, extravagant vacations, and overseas bank accounts. With the government’s financial incentives and anti-retaliation provisions in place, whistleblowers are provided with an increased confidence that they are safe reporting their knowledge to their lawyer. The fact is, most whistleblowers are simply concerned citizens who notice a risk to their company and want it to be addressed. Whistleblowers are the motivators behind making company ethics and compliance programs strong. They are hard-working, well-respected individuals who generate a culture of integrity for us all.