Whistleblower Ethics (Why it is the right thing to do)

Handling Whistleblower Cases Nationwide from Newport News, Virginia

In its recently published report entitled “Inside the Mind of a Whistleblower,” the Ethics Resource Center (ERC) synthesizes data collected over the past decade, providing statistics and information on the behavior of whistleblowers in the U.S. The study examines a wide range of factors that influence employees who face the decision of whether or not to report wrongdoing in the workplace. The research negates the common perception of whistleblowers as frustrated, selfish employees in search of monetary reward, and instead proves that employees are typically more inclined to report and remedy a problem internally for the good of the company.

In 2011, over 45 percent of employees in the U.S. observed some form of misconduct in the workplace; however, just two-thirds of those employees made any effort to report it. While this is the highest reporting rate ever recorded under the ERC’s watch, that leaves over 20 million people who said nothing. According to the study, only 18 percent of whistleblowers ever choose to report externally. Among those cases, 9 out of 10 employees still report internally at some point, leaving less than two percent that only report externally. Most of the time, employees look to solve problems internally before reaching out to the government.

Whistleblower cases today are known for often producing outcomes that include massive settlements. The possibility of a financial bounty, however, was one of the least-motivating factors for employees who reported misconduct. Workers are much more compelled to report if doing so will protect the public from serious harm and/or keep the company out of trouble. For example, 76 percent of employees who reported externally said that “keeping quiet” and failing to report would cause harm to other people, while just 43 percent cited a potential monetary reward as a reason to blow the whistle.

Commitment to ethics, personal relationships, and job security are among the many factors that can influence an employee’s decision of whether to report wrongdoing. Whistleblowers are twice as likely to speak up to an internal source when management’s ethical commitment appears to be strong. The majority of employees look directly to their supervisor to address a problem, and are more likely to report when they feel a greater sense of agency and are confident that their word will be taken seriously. Inherently, top-level management files a report nearly 90 percent of the time, while non-management employees did so at a rate of just 50 percent. In addition, employees who feel confident in both their job security and financial standing are more inclined to report business misconduct internally.

In general, more severe issues will push employees to look to an outside source for help, regardless of the factors mentioned above. However, there is a greater likelihood that the problem will be addressed internally when management holds a strong ethical commitment, when employees value their relationships with co-workers and supervisors, and when employees are confident they can blow the whistle internally without the threat of employer retaliation. Whistleblowers usually follow a morally-bound agenda, looking first to keep others out of harm’s way rather than realize any personal financial benefit.

The ERC’s study makes clear that whistleblowers want to resolve most issues within the companies they work for; an internal compliance program, then, can be invaluable to a company. Encouraging employees to come forward with observations of fraud or other misconduct protects both the employer (from a False Claims Act lawsuit) and the employee (from employer retaliation).  Those who report wrongdoing usually look to keep the company’s best interests in mind, so establishing a whistleblower program is clearly the most logical approach to deterring fraud and other misconduct in the workplace.

Source: EthicsResourceCenter. “Inside the Mind of a Whistleblower: A Supplemental Report of the 2011 National Business Ethics Survey.” May 31, 2012: Arlington, VA. Web. 8 Aug. 2012.