Hagens Berman Blog

Corporate Crime and the "Age of the Whistleblower"

by Steve Berman

04/04/2016

How Dieselgate Served as the Perfect Paradox

In recent news, The Economist dubbed our present time the “Age of the Whistleblower.” While it may appear to be dawning on some corporate giants that it would behoove them to listen torather than threatenwhistleblowers, corporate retaliation against whistleblowers remains the norm and threatens to undermine this golden age of whistleblowing on corporate fraud and public safety.

When The Economist’s article was published in December of 2015, the author noted that in then-recent news, Volkswagen had set a deadline for employees to come forward with information (even self-incriminating information) in return for avoiding dismissal or damages claims (but not protection from prosecution). “Whistleblowers have already played a part in exposing the company’s exaggerated claims on carbon-dioxide emissions—though no one from within VW lifted the lid on its other scandal, the fiddling of its vehicles’ output of nitrogen oxides during tests,” the piece read.

At the time, “Volkswagen, caught up in two devastating emissions scandals, [was] belatedly embracing whistleblowers,” The Economist wrote; but flash forward a few months deeper into the Dieselgate scandal and VW has revealed its true nature.

A Volkswagen whistleblower filed suit against the automaker for retaliation it took against the employee when he asserted that co-workers had illegally deleted electronic data shortly after the U.S. government accused Volkswagen of cheating emissions tests.

This latest episode highlights the article’s underlying reminder that while we may be living in an “Age of the Whistleblower,” retaliation against whistleblowers is also a part of the current landscape, and whistleblowers need to be aware of how to avoid these landmines when reporting fraud.

Certainly VW, with its current spotlight of scrutiny, isn’t the only corporate wrongdoer to employ this duplicitous, face-saving tactic of publicly applauding whistleblower heroes, while showing them the door upon their disclosure and often bringing additional claims against them.

The article spotlights some of the advantages of the many laws that exist to protect and benefit whistleblowers, but the reality exists that blowing the whistle is a risk—a telling sign of why more than 90 percent of whistleblowers sound the alarm internally before taking other measures or consulting with a whistleblower attorney.

Despite existing protections in place for whistleblowers, it’s important to be smart about how you blow the whistle. Many companies have their own “whistleblower” protocols in place to entice employees to report wrongdoing within the company, as was the case with Volkswagen.

Such reporting can have dire consequences.

Before reporting internally, it is best to speak with experienced whistleblower counsel at a law firm with a depth of experience ranging from financial fraud to retaliation protection laws of the False Claims Act and the SEC and CFTC whistleblower programs. Federal whistleblower laws give whistleblowers more agency, and finding the right legal representation can help ensure you won’t face repercussions for righting wrongs.

Whistleblowers need to remember that while internal “whistleblower” protocols may promise a safe space for the one coming forward, it doesn’t always work out that way. Having your own attorney can make all the difference both in making sure your claim puts an end to the fraud in question, and in making sure you can blow the whistle without facing retaliation.

The Economist surmises that, “to stifle whistleblowing is to harm the business. Bad news tends to come out eventually,” but if companies truly valued the integrity of reporting fraud and becoming a whistleblower, corporate cover-ups and corruption would be left as examples in companies’ nightmare-laden crisis training handbooks, instead of escalating into worldwide calamities.

But while there are pitfalls for whistleblowers, the current laws that exist and protections available serve as a lifeline, and with a knowledgeable whistleblower legal team at your disposal, your information regarding fraud can lead to high rewards and protection from employer retaliation.