By: Walter J. Liszka, Esq. 

There are currently forty-seven federal laws protecting the right of corporate workers to report wrongdoing, approximately twelve of which were passed in the last decade - obviously the most well-known being the Sarbanes-Oxley Act. The most recently passed legislation involves, among others, the Food Safety Modernization Act, which affects food industry workers; the Patent Protection and Affordable Care Act, which affects healthcare workers; and the Dodd-Frank Act, the most recently passed (2010), which affects all employees at publicly-traded companies and their private subsidiaries or affiliates. In addition, every state, with the exception of Alabama, has some type of whistleblower protection (for example: Illinois - Illinois Whistleblowers Reward and Protection Act - 740 ILCS 175/1 et seq.) which gives certain "whistleblower" protections to various employees. This area is becoming the "new litigation frontier" that is causing immense difficulties for employers.

According to a 2009 National Business Ethics Survey, women are more likely to report wrongdoing than men; managers are more likely to report wrongdoing than rank-and-file employees; and senior managers consistently report misconduct more than any other group. Why the increase in reporting? Because a vast number of these laws provide the potential of a very large monetary award to the whistleblower. For example, last October, Glaxo Smith Kline agreed to pay $750,000,000 to settle criminal and civil complaints with regard to the sale of contaminated drugs made by Glaxo Smith Kline at a now-closed plant. The involved employee whistleblower received $96,000,000 of that $750,000,000 settlement. It should now be very clear as to why this is the new frontier for litigation.

One of the most important things that any employer can do to escape becoming one of the entities involved in this new litigation, besides doing "everything right all the time," is have and maintain a good and respected relationship with its employee compliment. Every truly successful business has a positive and long-sustained employee relations component. Employees must believe in the organization and its fairness to get employees to internally raise concerns rather than run to the "Feds" or a courthouse. The best way to assure internal complaints is to provide a valid and sustainable internal complaint procedure that will facilitate complaints being raised within an organization. This policy must have the support of top management and be viewed by employees as having "integrity." While almost all employers now have some version of an open door policy or a complaint procedure, the biggest failing most employers make is not fully investigating, documenting, and resolving an internal complaint - i.e. the "integrity" of the policy.

It is incumbent upon every employer to protect its assets by establishing that it has a good complaint procedure and every complaint is fully investigated and documented and any problems resolved. It is crucial that any individual raising a complaint is kept abreast of what the investigation discloses and how the problem is resolved. This even deals with situations where, after investigation, there is no positive resolution in the involved employee's favor. It is crucial that the complaining employee be kept abreast and advised as to what has happened and how the problem has been resolved or dealt with. In the opinion of the author, this is the best defense for an employer in that it maintains the "integrity" of the policy.

It is the writer's feeling that one of the major potential issues in this complaint scenario is the fact that complaining employees who are later disciplined or terminated will contend that their discipline or termination was for retaliation in filing their initial complaint. That is the reason it is crucial to document fully the investigation and resolution of any complaint, including resolutions that are not in the best interest of the employer. As well, it is crucial that when any employee, whether a whistleblower or not, is disciplined or terminated, that accurate and complete documentation be made to substantiate the reason for the action taken, and that it is not "to get back at" someone for raising a complaint. Since our society has become more litigious and employee loyalty to any business organization is at an extremely low point, all employers must protect their businesses. Only time will tell the full impact of this new litigation frontier but the wise employers will take appropriate action now to minimize their exposure.