Whistleblower statutes protect employees when they find themselves in the difficult position of discovering their employer violating a law or in some way breaching the public trust. If the employer is warned of the problem but takes no action, or asks the employee to keep the situation confidential, the employee may be personally participating in a crime and may be exposed to a certain amount of personal liability. Sometimes, the right thing to do is to report the employer to the authorities (or, “blow the whistle”), but the employee may risk losing his job or position within the company. In this situation, the employee may be torn between a legal or ethical duty and perceived loyalty to his employer. “Whistleblower” issues arise in various circumstances, such as when an employee discovers that his employer that is a government contractor is over billing the government, or when a public or private employer is discovered cutting corners on safety matters in violation of rules and regulations under state occupational health and safety acts. Other situations may involve employer practices of job discrimination, abuse of adult or juvenile patients in a health care facility, or medical malpractice.
In these situations, if an employee exposes an unsafe, illegal or unethical practice to the authorities, the employee may be the subject of punitive or retaliatory action, such as, dismissal, transfer to an undesirable job assignment, demotion, etc. Whistleblower statutes may prohibit dismissal or other retaliatory action against the employee. They may also provide for enhanced monetary awards to employees who “blow the whistle” on an unscrupulous employer.
State whistleblower statutes vary in a number of respects. Some states only provide explicit protection of public employees or those working for government contractors. Statutes also vary with respect to whom is protected or on whom the whistle may be blown. Some states extend protection to other co-workers who assist the whistleblower; some explicitly protect an employee who blows the whistle on fellow employees or another person or business entity with a business relationship with the employer.
Most states limit remedies that an employee may recover to actual damages, such as back pay or fringe benefits. In some cases, however, the employee is given a money award tied to the illegal or unethical activity exposed. In South Carolina, if the employee’s report or complaint results in a savings of public funds, s/he may recover 25% of the estimated net savings in the first year after corrective action is undertaken, up to $2,000.
It should be noted that in addition to state statutes, there are a number of federal whistleblower provisions which protect employees in much the same way. However, many federal laws include much harsher penalties for employers and greater rewards for employees who risk careers and livelihoods by reporting activity that is damaging to the public trust.