Employee Compliance: Is Your Company Ready for a Whistleblower Protection Program?

Employee Compliance

When you hear the term “whistleblower,” you probably think of large corporations. But, a recent Supreme Court case showed that it’s not just large companies that need to concern themselves with with this issue. Small businesses also need to be on the lookout for criminality – they may need to develop whistleblower policies.

The Problem

Traditionally, the problem with whistleblowing has been retaliation. The government has been a long-time supporter of those willing to tattle on others who break the law. But, mostly, individuals do it because they have a strong need to correct a perceived wrong.

But, employees do fear their employer. If an employee rats out upper management, there may be reprisals. In the past, this sort of thing was restricted to large companies and the government put into place protections for those willing to stand up and do the right thing.

Until recently, however, those protections didn’t extend to small and medium businesses. 

How The Government Protects Whistleblowers

In a recent case, Lawson v. FMR LLC, the court ruled that section 806 of the Sarbanes Oxley Act (SOX), which protects employees from retaliation, also applies to private companies, contractors, and subcontractors that provide services to public companies.

The term “retaliation” is expanded to include discharge, termination, demotion, suspension, harassment, threats, or any other type of discrimination that would imply negative consequences for the person turning in evidence to the federal government.

Are you ready, as a private company, to handle whistleblower complaints? You know, from personal experience, how difficult it is to follow every law on the books to the letter. In many cases, it’s impossible from a logistical standpoint.

How you deal with whistleblowers will define the future of your company – indeed even whether you have a future to define.

The government has a long history of backing whistleblowers, and protecting them in large corporations, and they also leverage witness information in law enforcement, often cutting deals to get the information needed for a conviction.

It’s a known fact that anonymous tips, and first-hand knowledge, are the most effective source of information about suspected fraud.

Developing Protocols

If you haven’t already, it’s time to put in place a protocol. Whether that includes contacting a vendor who deals with whistleblowers to handle inbound calls or keeping a dedicated staff member on-site to handle regulatory concerns, you need to take action now.

Whistleblower protections need to be deeply rooted in your compliance and ethics policy. If you don’t have a compliance department, now is the time to get one.

You should provide rewards and incentives for whistleblowers, a reporting mechanism for handling increased reports, and accept anti-retaliation policies across all divisions of your company.

These procedures need to be written, and passed around to all departments. You should dedicate training to them, practice mock procedural violations, and do a test-run of your compliance procedure.

Set up an audit group to periodically, and actively, audit the company for any internal violations. Finally, continue to interact with your employees to enhance communication and make it clear that you have definite whistleblower protocols and protections in place.

Antonia Logan is a retired personnel director of several years. She now spends her day in the garden and her nights blogging about the corporate and business world.

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