The effectiveness of whistleblower protection laws vary depending on the country of the whistleblower. Many countries do not have whistleblower laws, and those that do, offer only weak protection. Currently, the leader in whistleblower protection laws is the United States, which has a number of strong laws protecting and encouraging whistleblowers to come forward.
US and foreign whistleblowers who provide original, timely, and credible information to US authorities regarding illegal or unethical activities, or violations of certain US laws, may be eligible to receive enhanced protection and monetary rewards. These rewards are provided under various US whistleblower protection laws and whistleblower reward programs.
The type of reward and whistleblower protection a person may be eligible to receive depends on many factors. This includes the whistleblowers country or state, relationship to the fraudster, the type of violation of law, as well as many other complex factors.
Additionally, to receive the maximum award, certain rules and filing procedures must be followed according to the law and/or whistleblower program. Failing to comply with any aspect of the law and/or program will result in a possible loss of whistleblower protection and an award.
Continue reading to learn more about the various US whistleblower protection laws that protect national and transnational whistleblowers.
Whistleblower protection means: protection from retaliation from reporting fraud, misconduct, or a violation of federal law.
Retaliation can happen with federal employees in the government, or corporate employees in the private sector.
Both US and non-US citizens are protected under many US whistleblower protection laws.
There are more than 50 whistleblower laws available to whistleblowers, including state and industry-specific laws.
Whistleblower Protection Laws and Retaliation
There are numerous whistleblower protection laws available to whistleblowers who experience retaliation and many of them provide monetary damages and remedies. Retaliation occurs when an employer terminates an employee or takes any other type of adverse action against an employee for engaging in a protected activity or a protected disclosure; and not all forms of whistleblowing disclosures are protected.
Protected Activity – Types of protected activities include reporting fraud or violations, filing a lawsuit, providing written or verbal statements in a legal proceeding, or refusing to perform a task or activity that you believe is illegal.
Adverse Action – Examples of adverse actions include firing, lay offs, demotions, denying overtime, denying benefits or promotions, threats and other forms of harassment.
The best way for whistleblowers to protect themselves against retaliation is to not disclose any information about the fraud or misconduct. Whistleblowers with evidence of fraud or misconduct should first speak with a whistleblower attorney who can help them understand the various whistleblower protection laws.
US Whistleblower Protection Laws
The United States has been the leader in creating and enacting strong whistleblower laws, some of which have transnational coverage. The US has established key protections and incentives, such as reward programs, whistleblower confidentiality, and creating secure reporting channels. Currently, there are dozens of laws, rules, and regulations at the federal, state, and local levels designed to encourage whistleblowers to come forward.
False Claims Act – The False Claims Act encourages whistleblowers who have original, timely, and credible evidence of U.S. government contract fraud to report them to the appropriate government officials. This includes false or fraudulent statements that violate U.S. federal law, or any other fraud or waste of government funds.The FCA encourages whistleblowers to work directly with the government in exchange for mandatory rewards. These rewards can range between 15 and 30 percent of the money collected by the federal Government.
Dodd-Frank Act – Under the Securities Exchange Act, the Commodity Exchange Act and the Foreign Corrupt Practices Act, the Dodd-Frank Act created enhanced provisions to protect whistleblowers. It also permits Dodd-Frank whistleblowers to anonymously file reward claims.
SEC Whistleblower Program – The SEC pays a qualified whistleblower a financial reward if whistleblower provides original information to the SEC regarding a violation of any of the securities laws enforced by the SEC and/or a violation of the Foreign Corrupt Practices Act.
CFTC Whistleblower Program – Established in 2010 under the Dodd-Frank Act, the CFTC whistleblower reward program pays whistleblower awards to eligible individuals who voluntarily provide the CFTC with “original information” on violations of the Commodity Exchange Act. The information must lead to a successful enforcement action resulting in monetary sanctions exceeding $1,000,000.
Sarbanes-Oxley Act (SOX) – The Sarbanes-Oxley Act created new requirements for governing internal controls, reporting, and accounting procedures, among other reforms. It also required publicly traded companies to establish independent Audit Committees, and confidential employee concerns programs.
The Internal Revenue Act – Under the IRS Whistleblower Program, whistleblowers seeking to expose tax fraud can use provisions of the IRS whistleblower law and become eligible to receive monetary rewards for successful sanctions against tax fraud violators. The scope of this law also includes international money laundering.
The Lacey Act – Enacted in 1900, the Lacey Act is a conservation law in the United States that prohibits trade in wildlife, fish, and plants that have been illegally taken, possessed, transported, or sold. It also prevents the spread of invasive or non-native species.
The Whistleblower Protection Enhancement Act of 2012 – The law strengthened the protections for federal employees who disclose evidence of waste, fraud, or abuse. The Office of Special Counsel (OSC) is an independent federal agency that investigates and prosecutes prohibited personnel action practices by federal agencies, including whistleblower retaliation.
The Intelligence Community Whistleblower Protection Act – This act sets forth a procedure for employees and contractors of specialized federal intelligence agencies to file complaints or provide information to Congress about problems involving intelligence activities. For intelligence community whistleblower protection laws and provisions, we suggest visiting our intelligence community page – Intelligence Community Whistleblower Protections.
OSHA Whistleblower Protection Program – OSHA administers more than twenty whistleblower protection laws. This includes Section 11(c) of OSHA, which prohibits retaliation against employees who report substantial and specific dangers to public health.
For specific federal whistleblower protection laws for specific industries, and laws that deal directly with public health and safety, we suggest visiting our rules page – Rule 4: Find the Best Federal Law.
Please also Executive Order 12731, issued in 1990, which requires all federal employees to disclose waste, fraud, corruption, and abuse of authority.
State Whistleblower Protection Laws
Because of the False Claims Act’s history of great success, almost half of the US states have enacted their own versions of the law. States with an “*” have a limited False Claims Act law that only covers fraud in Medicaid programs.
The following local jurisdictions have enacted False Claims Act laws:
Allegany County, Pennsylvania
New York City, New York
Transnational and International Whistleblower Protection Laws
Whistleblower protection has been recognized as part of international law since 2003, when the United Nations adopted the Convention Against Corruption. This convention was later signed by 140 nations and formally ratified, accepted, approved, or acceded by 137 nations, including the United States. Article 32 and Article 33 of the UN Convention endorse protection for whistleblowers.
Given the significant rise in international fraud cases, politicians all over the world are now focusing on drafting stronger whistleblower laws. Over 59 countries have enacted whistleblower protections. And with the EU Directive in the European Union, there are many more efforts underway. The 27 member-states of the European Union must adopt new whistleblower laws by December 17, 2021 or face certain penalties.
International laws vary widely and in some countries, such as India, only public employees are protected. Whereas in countries like South Korea or Japan, private and public employees are protected from retaliation. Take Mexico, Norway, or Portugal for instance – these countries only allow government employees, contractors, and suppliers to qualify as whistleblowers.
Foreign Corrupt Practices Action (FCPA) – The Foreign Corrupt Practices Act is one of the most powerful and effective transnational* anti-corruption laws in the world. It has two main provisions, centered around anti-bribery and proper accounting. *Transnational crimes that involve cross-border transference. This means, they occur in more than one country at the same time. These crimes include an array of illegal activities, such as human smuggling, wildlife trafficking, money trafficking, and other crimes expansive in scope and international in scale.
The Act to Prevent Pollution from Ships (APP) – In order to implement the provisions of MARPOL, the U.S. passed APPS in 1980. APPS includes whistleblower provisions to help combat illegal pollution. It also empowers and encourages workers to expose any known information about pollution from ships.
The Endangered Species Act (ESA) – The ESA protects endangered and threatened species, and supports their conservation. The Secretary of Agriculture, Commerce, Interior, and Treasury to authorize rewards and the amount of the award.
For more information on various whistleblower protection laws, please check out our International Toolkit. This is a supplemental resource with several links to important articles, presentations, and reports that may help you further understand whistleblower laws.
On September 19, 2018, news broke of $234 billion money laundering scheme. The scheme moved rubbles out of Russia, converted them to dollars at the Estonian branch of Danske Bank, and then moved the dollars to New York with the assistance of three correspondent banks (Bank of America, J.P Morgan, and Deutsche Bank).
Danske Bank admitted all of its internal controls designed to prevent money laundering had failed. The bank also revealed that the scheme had been reported to the highest levels of the bank by a whistleblower over four years before. The whistleblower’s identity was required to be secret. But it took only days for his name to leak out.
Soon the entire international banking world learned that the former Danske Bank manager Howard Wilkinson had exposed the largest money laundering scheme in history, and that the bank had tried to cover it up.
Kohn, Kohn and Colapinto and Athens-based Greek law firm of Pavlos K. Sarakis & Associates jointly represented Greek whistleblowers who proved that the multinational Swiss-based pharmaceutical company Novartis paid millions in bribes to illegally market drugs in violation of the Foreign Corrupt Practices Act. Novartis was required to pay over $300 million in sanctions and fines to the U.S. Securities and Exchange Commission (SEC) and the U.S. Department of Justice (DOJ).
The New Whistleblower Handbook, by Stephen M. Kohn
To learn more about whistleblower protection laws, read The New Whistleblower Handbook. This guide to whistleblowing is a guide and essential tool to blowing the whistle, protecting yourself, and qualifying for rewards.
On May 25, 2011, after an intense ten-month battle that pitted the Chamber of Commence against whistleblower advocates, the Securities Exchange Commission issued cutting edge regulations implementing the whistleblower reward provisions of the Dodd Frank Act. Working on a pro bono basis with the National Whistleblowers Center, KKC attorneys meet directly with all 5 SEC Commissioners, the Commission’s enforcement staff and the head of the Commission’s whistleblower office urging the SEC to reject the Chamber’s attempt to cut that part of the law. The Commission not only rebuffed the Chamber’s demand that whistleblower’s be forced to contact their employer before going to the SEC, they also adopted many of the positive procedural recommendations urged by the NWC in nine separately filed rule making proposals. Links: “Reactions To SEC Whistleblower Rules Fall Predictably,” Wall Street Journal 5-25-11. “Rewarding Whistle-blowers For Greater Compliance,” Miller-McCune 5-30-11. NWC Dodd-Frank Rulemaking Page
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