Are whistleblowers in legal danger?

Are whistleblowers in legal danger?

Apr. 3, 2018

Leora Eisenstadt and her co-author examine Title VII of the Civil Rights Act of 1964, under which retaliation against someone who complains of discrimination is prohibited. Nevertheless, the “swiss cheese” laws covering whistleblowing often provide little to no protection for the tipsters, who are likely to be ostracized and blacklisted from their company or even industry after the story breaks.

After reviewing the Whistleblowers Protection Act, Dodd–Frank Act, Sarbanes–Oxley Act, and the False Claims Act, Eisenstadt and her co-author uncovered many of the loopholes that would inherently exclude whistleblowers from potential support. Although the laws prohibit retaliation to some extent, three out of four statutes do not protect whistleblowers from future employers’ prejudices.

Eisenstadt proposes a modest reform involving adding clear statutory language detailing the protections available to whistleblowers. In this way, courts can more fairly apply the law to the many types of whistleblowing cases that occur in both private and public settings.



Leora F. Eisenstadt and Jennifer M. Pacella, Whistleblowers Need Not Apply, 55 American Business Law Journal 665 (2018). 

International events over the last year have propelled the importance of whistleblowers to the forefront. It is increasingly evident that whistleblowers provide immense value to society.

Yet, for years, whistleblowers have been victims of retaliation, commonly experiencing threats, discrimination, and employment termination due to their reporting. Against the backdrop of a society heavily defined by compliance-focused initiatives—where organizations and industries construct robust compliance programs, internal policies, and codes of conduct—this Article highlights a significant gap in legal protections for would-be whistleblowers. While compliance initiatives demonstrate that active self-regulation is increasingly a staple of organizational governance, this Article pinpoints the problems that arise when such initiatives extend beyond applicable legal thresholds for retaliation protection. This over-extension leaves vulnerable employees and potential whistleblowers without legal recourse following adverse employment actions, even if they comply with their employers’ internal policies and compliance programs. We examine this gap in legal protections in the context of compliance initiatives in three domains: equal employment opportunity and sexual harassment; securities fraud; and anti-corruption. We then compare these initiatives with the legal and regulatory compliance postures under Title VII of the Civil Rights Act of 1964, the Dodd–Frank Wall Street Reform and Consumer Protection Act, and the Foreign Corrupt Practices Act, respectively, to illustrate how most compliance initiatives fail to mirror the retaliation protections under those statutes. To remedy this gap in protections, we propose complementary solutions under contract and tort law frameworks, coupled with soft law initiatives