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Employers: Now Is the Time to Encourage Internal Whistleblowing

| Nov 23, 2020 | Employment Law |

These are trying times for employers. Transitioning to a remote workforce—especially on short notice—is fraught with challenges. One unanticipated side effect of this seismic shift? An increase in whistleblowing.

The last few months have seen a dramatic rise in whistleblower claims. There are several possible explanations for this spike:

  • Physical distance from the office makes workers less hesitant about possible retaliation after whistleblowing;
  • Disgruntled employees who were laid off or furloughed due to the pandemic have axes to grind against their employers;
  • An increase in sloppy business practices caused by the stress and novelty of a pandemic; and
  • Employees working remotely now have access to business systems and sensitive information in the privacy of their homes.

These factors create a situation ripe for whistleblower complaints. Employers must face the challenge of determining how to direct those complaints toward the most effective—and least damaging—resolution.

Internal versus external whistleblowing

The spike in whistleblowing has largely involved external complaints, meaning direct reports to outside parties like government agencies or the media. Internal whistleblowing, by contrast, involves reporting misconduct through in-house channels.

Employers should ensure they have clearly articulated policies regarding how an employee may report misconduct in the workplace. Such policies allow employers to handle issues inside the company without the stress and time associated with dealing with an external agency. Established internal reporting mechanisms also:

  • Prevent costly legal disputes;
  • Boost employee morale;
  • Create a culture of accountability; and
  • Catch gaps in training and best practices.

In short, employers can actively avoid the costs of public whistleblowing by establishing strong measures for handling employee complaints and encouraging internal whistleblowing.

Steps to consider

Employers should be aware that an employee may to resort to external whistleblowing even if there are internal protocols in place. For example, remote workers with less opportunity for face-to-face communication may jump straight to external outlets.

When whistleblower claims allege violations of certain state or federal laws, powerful incentives for external whistleblowing come into play.  Most notably, the whistleblower may see the potential for financial compensation. A successful claim can generously pad the whistleblower’s pockets.

Employers can counteract those incentives by:

  • Establishing quick and easy ways for remote employees to raise concerns (for example, through a phone hotline or secure online submission form);
  • Outlining clear policies and procedures for investigating complaints in a fair, thorough and neutral manner;
  • Assuring employees that they will not face retaliation for reporting concerns in good faith;
  • Allowing whistleblowers to remain anonymous;
  • Conducting regular trainings so employees are aware of internal complaint procedures; and
  • Providing incentives (financial or otherwise) for employees who speak up about misconduct.

A robust internal whistleblowing procedure is a win-win all around. It gives employees an effective channel for voicing concerns while helping the employer foster accountability and internal transparency, reduce the risk of liability, and promote continual improvement within the organization.

Reach out to an employment and business lawyer for guidance on how to develop or fine-tune your internal whistleblowing procedures.