There are dozens of federal, state, and local whistleblower laws in the U.S. These generally fall into two categories: 1) whistleblower protection laws, which prohibit retaliation against whistleblowers who report wrongdoing, and 2) whistleblower reward laws, which pay rewards to whistleblowers who report certain kinds of fraud and other wrongdoing to the government.
Before you start the legal journey of becoming a whistleblower, here are ten important facts to keep in mind:
1. Whistleblowers can receive a financial reward in exchange for information leading to a successful enforcement action.
Various federal and state agencies oversee whistleblower reward programs, including:
- Department of Justice (DOJ)
- Securities and Exchange Commission (SEC)
- Internal Revenue Service (IRS)
- Commodity Futures Trading Commission (CFTC)
- Department of the Treasury
- Certain states’ Attorney General offices
- and others.
Under these programs, whistleblowers who report misconduct to the government can receive between 10-30% of a qualifying recovery that the government makes based on the whistleblower’s information. The decision to issue a reward—and how much—is at the government’s discretion, though the decision can be appealed in some instances.
2. Whistleblower rewards are primarily about fraud.
People often use the word “whistleblower” to simply describe someone who reports wrongdoing. Legally speaking, however, not all whistleblowing qualifies for a reward, and not all whistleblower activity is protected from retaliation. Most reward programs involve some kind of fraud, such as:
- Fraud against the federal, state, or local government
- Fraud against shareholders or investors
- Commodity fraud
- Predatory fraudulent schemes like Ponzi schemes, investment scams
- Money laundering
- Tax fraud.
While many whistleblower protection laws make it unlawful to retaliate against individuals who report workplace harassment (for example, discrimination, sexual harassment, etc.), these are generally not whistleblower reward matters unless the misconduct resulted in some fraud by the company against the government, taxpayers, investors, customers, or the public.
3. Most whistleblowers don’t make headline news—and many can do so confidentially or anonymously.
You’ve probably heard of famous whistleblowers who publicly exposed massive corruption and changed the course of history. Even the term “whistleblower” suggests that to be one, you must do so loudly and publicly.
That isn’t usually true. Even publicly filed whistleblower lawsuits are typically resolved with little public fanfare. And some whistleblower reward laws protect against the public disclosure of whistleblowers’ identities. For example, the Dodd-Frank Act protects the confidentiality of whistleblowers who report to the SEC and CFTC.
It’s important for whistleblowers to understand, however, that confidentiality doesn’t mean a company can’t figure out who a whistleblower is. If you’re concerned about the risks of being outed as a whistleblower, an attorney can help explore your options.
4. You don’t need to be an employee.
A whistleblower can be anyone with insider or non-public knowledge of a company’s fraudulent practices. This includes employees, contractors, subcontractors, vendors, customers, business partners, advisors, competitors, friends, family, or members of the public.
5. There are deadlines to file a whistleblower claim.
Most whistleblower laws, and the laws that whistleblowers help the government enforce, have a statute of limitations. In other words, whistleblowers have a deadline to file a claim in court based on when the violation occurred. These deadlines can be anywhere from 30 days to 6 years from the date of the violation. The exact statute of limitations depends on various factors, such as what type of misconduct occurred and where.
If you think you have a whistleblower claim, you should consult with an attorney right away, so you do not miss the reporting deadline.
6. There’s always an advantage to being first to report, and sometimes you need to be first.
All whistleblower reward laws favor whistleblowers who report first. Some, like the False Claims Act (FCA), have a “first to file” requirement. Under the FCA, to be eligible for a whistleblower reward, you generally must be the first person to file a complaint detailing the fraud.
Most whistleblower laws also require some non-public information to qualify for a reward. Whistleblowers cannot rely solely on information that is already public to satisfy the first-to-file requirement, such as news reports or a previously existing lawsuit.
If you’re thinking about becoming a whistleblower, it’s important to get in touch with a qualified whistleblower attorney quickly, especially if others were privy to the fraud.
7. There is no requirement to report internally first.
Most corporate whistleblowers first raise their concerns to their supervisors or their company’s whistleblower hotline. But many whistleblowers ultimately decide to report wrongdoing to the government after the company ignores their concerns or punishes them for speaking out.
Fortunately, when it comes to whistleblower reward programs, you can take your information straight to the government. There is no requirement that you report internally first, especially if you have legitimate concerns that doing so will put your job or safety at risk.
8. Retaliation is common—but there are legal protections.
Many federal, state, and local laws protect whistleblowers from retaliation. Unfortunately, retaliation is still common. And retaliation isn’t just getting fired. Companies and executives have taken all sorts of unlawful retaliatory actions against whistleblowers, such as exclusion from important meetings, denial of a raise or promotion, reduction in pay, demotion, denial of bonus or other owed compensation—and termination.
Whistleblowing often comes with major risks, and you must carefully weigh the emotional and financial risks against the potential to expose massive wrongdoing. Plus, not all whistleblower activity is protected from retaliation. An experienced whistleblower attorney can help guide you on the best decision for you. If you are already facing retaliation for speaking out, it’s important to speak with an attorney who can help you assert your rights.
9. You are generally protected from retaliation for raising reasonable concerns, even if you’re wrong.
Under most whistleblower laws, whistleblowers are legally protected from retaliation as long as they have a “good faith” or reasonable belief that the company has committed fraud—even if they’re wrong.
If you report your good-faith concerns and you turn out to be wrong, but your company still punishes you for speaking out, you may be entitled to legal protections. Speaking with an attorney before you blow the whistle can help you understand what conduct is protected and what conduct is not protected.
10. The average whistleblower case takes several years.
Whistleblowing takes time. These matters often deal with complex financial frauds that have been carefully concealed by company executives. As a result, these cases can take anywhere from months to many years to prosecute.
In our experience, the average reward case takes between two and four years, but many cases have lasted 10-15 years or more. Retaliation cases sometimes move quicker, but not always; they can be resolved in a matter of months, but can also last several years or longer. As a general rule of thumb, the bigger and more complex the fraud, the longer the case will take. There are other factors at play, such as whether the company is a repeat offender, or if the government already knows about some of the fraud. Thankfully, most whistleblowers are able to rely on their attorneys and the government to handle most of the investigation, but it’s important to realize that whistleblowing and fighting fraud is a long, slow process.
