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Fraud and Financial Whistleblowers

Dealing With a Whistleblower?

There is a lot going on with whistleblowers in the news right now but most employers prefer to ensure that their workplaces avoid newsworthiness. People who are fraud or fiscal whistleblowers tend to fall in categories like concerned citizen, tattle tale, or chronic victim. Unfortunately, it is often difficult to determine which flavor of whistleblower you are dealing with until after you have conducted an investigation. The information brought forward by appropriately-intentioned whistleblowers is invaluable but it can be a struggle to deal with the other types.

There is a lot of movement in several key whistleblower provisions that seem to guarantee that whistleblower protections will continue to grow. Discrimination protections, which are outside the scope of this post, seem slated to continue growing at a fast pace. Experts predict that other legislative whistleblower provisions are also likely to continue covering more types of whistleblowing activity. All of the various whistleblower types seem to be building off the concepts and experiences of the other types but there is particular movement in the following:

The False Claims Act

This Act is one of our nation’s oldest and makes it a crime to defraud the government or to retaliate against someone who reports fraud against the government. Recent cases and out of court settlements from private employers who receive federal money, such as hospitals, make it clear that new types of False Claims Act whistleblowers are gaining broader protections.

Sarbanes Oxley Act, or SOX

Very generally, SOX prohibits public companies from retaliating against employees who report fraud, SEC rule violations, or shareholder fraud. Courts are currently deciding whether or not to allow contract worker whistleblowers to be protected by SOX.

Affordable Care Act

This act is still confusing and perplexing most companies and it does have employee whistleblower protections. The most important issue so far for employers is to find an expert to ensure you are implementing the Act correctly at your worksite.

As with most things in employment, a strong offense is the best defense. It is important to 1) require concerned employees report any suspected illegal behavior, 2) allow anonymous reports, 3) document your reporting requirement, 4) conduct investigations into all whistleblowing reports that are unbiased and thorough, and 5) that all whistleblowers be treated identically.