Whistleblower rewards programs are often touted by government officials as an important tool in encouraging employees to bring unlawful activity that they observe at work to light. Studies have shown that company employees have more often brought fraud to light than shareholders, regulators, auditors, or the media, proving that employees’ voices play a critical role in combating corporate misconduct. Large awards, occasionally reaching tens or hundreds of millions of dollars, are thought to act as incentives for individuals with vital information to come forward who might otherwise be deterred by retaliation from their employers. While these programs send a powerful message about the value of blowing the whistle to protect the financial and physical wellbeing of the public, and recent trends in the SEC and CFTC award programs suggest that more people are learning about and starting to utilize these programs, studies show that whistleblowers are often not thinking of any personal gain when they do decide to speak out.
Integrity Trumps Payouts
Numerous studies show that whistleblowers are often motivated by their own personal sense of integrity and a genuine desire to protect the public. Researchers have found that even when their disclosures come within federal statutes that provide for large monetary awards, few whistleblowers are aware of or driven by reward programs at the time they begin speaking out. Most individuals raise concerns about unlawful and unsafe practices at their workplace because they are unwilling to participate in conduct they believe is wrong, even though doing so can have a negative impact on their careers.
Even whistleblowers who are aware of awards programs can still be motivated by a powerful commitment to the public interest. In one dramatic example, a whistleblower who qualified for an $8.5 million award in 2015 for reporting wrongdoing to the SEC chose to forfeit his award to protest the fact that executives who engaged in misconduct were never held personally responsible. While he acknowledged that he began working with the agency in part because he knew he might qualify for a large award, the whistleblower came to believe that it was more important to hold executives accountable than recover the sum for himself.
Whistleblowing as an Ethical Obligation
Studies of whistleblower motivations confirm what our attorneys see every day – most employees speak out because they genuinely believe they have an ethical obligation to do so. These individuals act at great personal and professional risk to bring wrongdoing to light, and they almost always face serious retaliation from their employers, including discipline, demotion, and even termination. Despite the risks, these brave employees speak out because they cannot stand to see others suffer from the illegal and unjust conduct they have witnessed at work.
Employers often unfairly characterize whistleblowers as disgruntled employees holding a grudge, and industry groups often complain that rewards programs only encourage disloyal behavior. The studies show, however, that neither perception is accurate – whistleblowers are often conscientious individuals acting on behalf of the public, with no intention of getting a financial windfall. Far from being aggrieved and disloyal employees, many whistleblowers even believe that rooting out and reporting corporate misconduct is more beneficial to their companies than remaining quiet and letting the harm continue. In fact, studies show that the vast majority of whistleblowers attempt to redress corporate malfeasance internally, and only file a tip with a government reward program when their employers fail to address the issue. Further showing that employees have stronger motivations for speaking up than the almighty dollar, studies also find that providing financial incentives for blowing the whistle has not resulted in a wave of frivolous claims from employees hoping for a payout.
While whistleblower awards programs do not seem, at this time, to be motivating many whistleblowers to come forward who were not already determined to speak out, they still serve a crucial function. These programs bring attention to the need for employees to act as the eyes and ears of the public, and provide meaningful compensation for some whistleblowers who assist in major investigations at great personal and professional risk. Fortunately for the public, most whistleblowers don’t need a big payout to make protecting us worth it – their courage and integrity are enough.
SEC Whistleblower Program Overview
Corporate Whistleblower Overview
Cybersecurity Whistleblower Program Overview
“Gatekeepers” as Whistleblowers: Compliance Officers, Accountants, and Attorneys