Whistleblower

With increased public and governmental scrutiny of corporate finances and reporting, and with the plaintiff’s bar leveraging allegations of wrongdoing under federal law when pursuing claims of retaliation, whistleblower complaints have spiked dramatically. For example, since its inception in 2011 the Securities and Exchange Commission's Office of the Whistleblower has received more than 6,500 tips about alleged securities law violations. Under this new bounty program, individuals who provide information resulting in sanctions stand to collect between 10 percent and 30 percent of those valued at more than $1 million. Although most of the initial bounties paid were less than $100,000, the SEC announced the payment of a $14 million bounty to one individual in September 2013. The lure of a payout like this is likely to sustain the flow of tips coming into the SEC in the coming years.

While virtually any business is at risk of whistleblower complaints, companies in the health care, biotech, and pharmaceutical industries, as well as institutions of higher education, have become particular targets for whistleblower suits. As a further challenge to employers, penalties for retaliation and discrimination against whistleblowers can result in thousands of dollars per allegation.  Employers also face unique management challenges when it comes to current employees who have raised False Claims Act allegations or alleged other violations of law.

Crowell & Moring has a long history of success defending employers against claims asserted under Section 3730(h) of the False Claims Act, the Foreign Corrupt Practices Act, Sarbanes-Oxley (SOX), the U.K. Bribery Act, New Jersey's Conscientious Employee Protection Act (CEPA), and other state, federal, and international whistleblower laws. Our Labor & Employment Group lawyers team with lawyers from our White Collar and Government Contracts practices to conduct investigations of potential wrongdoing and retaliation, including reviews of activities that may have driven the whistleblower's report, as well as management responses to these activities and the information they receive. We also provide advice on how to cope with suspected whistleblowers who encounter performance problems or in some other manner threaten the stability or security of the business.

For reports and analysis of developments in whistleblower law, please visit our blog, Whistleblower Watch, at whistleblowerwatch.com.