How to Respond to a Whistleblower Complaint
- An effective compliance program should include a written policy and established procedures for responding to whistleblower complaints.
- When a company receives a whistleblower complaint, it should follow its policies and procedures while also taking steps to mitigate the risk of liability.
- While companies must be careful to avoid retaliation against whistleblowers, they can (and should) take appropriate action to protect themselves as well.
- If a company’s internal investigation substantiates a whistleblower’s complaint, the company should take appropriate remedial action.
- Companies can (and should) establish clear lines of communication with whistleblowers while focusing on resolving the issue at hand.
10 Tips for Responding to a Whistleblower Complaint
So, what do (and don’t) you need to do when you receive a whistleblower complaint? Here are 10 tips from the whistleblower defense attorneys at Spodek Law Group:
1. Follow Your Company’s Policies and Procedures
If your company has policies and procedures for responding to whistleblower complaints, you should follow them. If your company does not have policies and procedures for responding to whistleblower complaints, you should talk to our attorneys. With inadequate preparation, companies can face liability for failing to protect whistleblowers—and they can face liability for failing to address whistleblowers’ complaints as well.
2. Be Mindful of the Whistleblower’s Protections
Existing policies and procedures aside, companies must be mindful of the protections that whistleblowers have under state and federal law. Taking action against a whistleblower can lead to civil litigation and/or government prosecution, and this can have significant financial and other consequences. In many cases, companies will face the risk of both civil litigation and government prosecution, and in many cases the risk of litigation will be accompanied by the risk of facing a federal whistleblower claim.
3. Engage Outside Counsel to Conduct an Independent Investigation
When a company receives a whistleblower complaint, engaging outside counsel to conduct an independent investigation is generally the best course of action. By engaging outside counsel, a company’s leaders can focus on running the company, and they can rely on their outside counsel to make informed decisions based on the evidence that is available. This helps to ensure that the result of the investigation is both accurate and impartial; and, if the investigation uncovers violations of law, it also ensures that the company’s leaders can make informed decisions about how to proceed.
4. Do Not Interfere with the Investigation
Once a company engages outside counsel to conduct an investigation, its leaders must not do anything that would constitute interference. This includes talking to employees about the investigation, conducting their own investigative activities, and limiting the resources that are available to the company’s outside counsel. While companies may be limited in terms of what resources they can devote to investigating a whistleblower’s complaint in some cases, companies should avoid doing anything that could be construed as interfering with an investigation that is designed to identify and put a stop to unlawful conduct.
5. Communicate with the Whistleblower
Companies should also communicate with the whistleblower. Under the law, whistleblowers are entitled to receive updates about ongoing investigations, and companies can face scrutiny for failing to keep whistleblowers informed. While this can present some challenges, experienced outside counsel will be familiar with the issues that can arise and will be able to manage them effectively as necessary. When communicating with whistleblowers, outside counsel can also help to ensure that the communications remain protected under the attorney-client privilege.
6. Avoid Retaliatory Action Against the Whistleblower
One of the hallmarks of whistleblower claims is that companies are prohibited from taking retaliatory action against whistleblowers. The law makes clear that companies cannot discharge, demote, or otherwise punish whistleblowers for coming forward. This is true even if a company’s internal investigation determines that the whistleblower’s complaint is unfounded. With that said, not all disciplinary action constitutes retaliation, and companies do not necessarily have to retain whistleblowers who are underperforming or creating a hostile work environment. These are complex and sensitive issues that require hands-on legal guidance.
8. Consider Reporting the Issue to the U.S. Department of Justice (DOJ)
In addition to reporting substantiated whistleblower complaints to the appropriate state authorities, companies may also need to report certain issues to the U.S. Department of Justice (DOJ) or other federal authorities. Whistleblower complaints can trigger liability under a variety of federal statutes; and, when a company faces the risk of federal sanctions, it may be in the company’s best interests to self-disclose and negotiate a resolution with the DOJ. Here, too, companies need to rely on their outside counsel to assess the situation and determine what course of action is most appropriate.
9. Implement Additional Compliance Policies and Procedures if Necessary
When a company’s internal investigation substantiates a whistleblower’s complaint, the failure that led to the whistleblower’s complaint may be due, at least in part, to the company’s failure to implement adequate compliance policies and procedures. In addition to implementing policies and procedures for responding to whistleblower complaints, companies should implement compliance policies and procedures for all aspects of their operations that have the potential to give rise to federal liability. If a whistleblower complaint exposes a deficiency, the company should work with its outside counsel to address the deficiency as soon as possible.
10. Take Additional Steps as Necessary to Protect the Company
In addition to implementing additional policies and procedures if necessary, companies can (and should) take additional steps to protect themselves as necessary. Here, too, the additional measures that are necessary will depend on the circumstances at hand. These measures could range from improving internal controls to making personnel changes. If warranted, companies should also be prepared to effectively manage publicity about their whistleblower investigations.
FAQs: What Companies Need to Know About Responding to Whistleblower Complaints
What Does it Mean to Be a Whistleblower?
Within the context of the False Claims Act and other relevant statutes, a “whistleblower” is an individual who comes forward to report a violation of federal law or other wrongdoing. Federal whistleblower statutes and their state law counterparts provide protections against retaliation, and some federal statutes also entitle whistleblowers to receive a portion of any funds recovered in connection with their complaints.
Are Companies Required to Have Policies and Procedures for Handling Whistleblower Complaints?
Yes, companies should have policies and procedures for handling whistleblower complaints. These policies and procedures should be an integral part of companies’ broader compliance programs, and they should accurately reflect the company’s efforts to comply with all pertinent state and federal statutes and regulations.
When Should Outside Counsel Conduct Companies’ Internal Whistleblower Investigations?
While there is no legal requirement to have outside counsel conduct companies’ internal whistleblower investigations, it is generally advisable to do so. Relying on outside counsel helps to ensure that investigations are both thorough and impartial, and it allows companies’ leaders to focus on running the company.
What Constitutes Unlawful Retaliation Against a Whistleblower?
Broadly speaking, unlawful retaliation against a whistleblower involves taking any adverse employment-related action due to the whistleblower’s decision to come forward. While this is not a complete list, it includes actions such as demotion and discharge. Importantly, termination is not always retaliatory, and companies can lawfully terminate whistleblowers in many cases.
Can Companies Take Legal Action Against Whistleblowers?
Yes, companies can take legal action against whistleblowers under appropriate circumstances. For example, if a whistleblower disseminates false information about a company publicly, the company can take legal action against the whistleblower for defamation. But, companies must be very careful to avoid taking any action that can be construed as retaliatory, and they should work closely with outside counsel to ensure that they are not putting themselves at risk for liability.
