Linda Tripp, Enron Corp.’s Sherron Watkins, “Big Tobacco’s” Jeffrey Wigand…these individuals have scored a place in history as some of the country’s most notorious whistleblowers. When it comes to reporting misconduct, there can be plenty at stake. Just this past month, whistleblowers in a Texas federal court suit against The Boeing Company were awarded $3.9 million out of a total $23 million settlement; another whistleblower will receive part of a $175 million settlement in a case against Dallas-based Trinity Industries. For most whistleblowers, however, the reported misconduct and the potential rewards are much less grandiose. Regardless, the financial and emotional toll can be life changing. Here’s what HR and hiring managers should know.
- The two high-stakes cases cited above were filed under the False Claims Act, which allows whistleblowers to sue companies for alleged fraudulent acts that are harmful to the government. As of 2012, over 70 percent of all federal government FCA actions were initiated by whistleblowers. If your organization contracts with the government, you’d better be familiar with this act.
- Managers are responsible for a large share of workplace misconduct (60 percent) and senior managers are more likely than lower-level managers to break rules, according to a 2013 National Business Ethics Survey.
- In that same survey, more than one in five workers (21 percent) who reported misconduct said they experienced retaliation in return. The rate was only 12 percent in 2007.
- Texas does have a Whistleblower Act, but it applies only to public employees. However, several common law and statute protections may cover a whistleblower in the private sector, particular when it comes to criminally illegal activity, discrimination, workers’ compensation, issues involving healthcare workers and other areas.
So what about the title of our article? Should you really “thank” your whistleblower? “In many cases, absolutely,” reveals Caroline Valentine of ValentineHR. Valentine explains that it’s often a new employee who raises concern. Since that individual hasn’t yet “earned” the trust of the business owner or executive, the concerns can go unaddressed for quite some time. Or, worse yet, result in wrongful termination of the perceived “troublemaker.”
“A common knee-jerk reaction, unfortunately, is to ‘shoot the messenger’ when someone new reports misconduct,” Valentine explains. “But you need to value the fresh perspective that individual brings to the situation. Even though they’re new, they have a lot to lose too.”
Valentine has witnessed several scenarios throughout her career in which employers turned a blind eye to what was being reported. In one classic case, a new sales associate accused fellow employees of stealing from a retail establishment. That employee reported it to the manager, who ignored the claims. The employee then reported it to an executive, who was also skeptical. Only when thousands of dollars became noticeably missing and the company installed security cameras, were the new employee’s original claims proven after all.
“An irrational skepticism of ‘outsiders’ can really hurt your business if you let it,” she comments.
To avoid such a situation, Valentine recommends taking two important steps. First, evaluate your company’s culture and reward system. Has the driving motivation within the company become one of greed, for instance? If so, you may be rewarding the wrong type of behavior. Second, introduce an open door policy: A truly safe, respectful environment in which employees can report misconduct. Be sure employees know that they can report misconduct as far up the ranks as necessary, without fear of retaliation.
“Be prepared to ‘walk the walk’ when it comes to addressing reports of misconduct,” concludes Valentine. “By being open and willing to listen from the start, many situations can be remedied before they get out of hand.”
In the end, the situation may be likened to the allegory of the Emperor’s New Clothes. In a discrete and respectful environment, shouldn’t truth-telling be valued? When you’ve taken proactive steps to create such an environment, those who love to work for you will be thankful…and so will you.
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