Statutes

When an employee discovers criminal activity in his or her company, that employee can be placed in a difficult situation. Perhaps an employer has asked an employee to keep illegal activity confidential, or that employee knows a company is violating the law or breaching public trust for a fact. In situations like these, an employee can take on personal liability for personally participating in the crime within that employee's company. To avoid this personal liability, employees can report criminal activity and be protected by whistleblower statutes.

Threat of Retaliation

When an employee "blows the whistle" and reports an employer to authorities, the employee may be compromising his or her position within the company. The employer may become angry and resent the employee, and thus fire the employee simply for reporting the situation to the appropriate authorities. Or, maybe the employer decides to demote the employee and transfer him or her to another department within the company.

Whistleblower Protection

The employee may feel the contradictory pressures to be loyal to the employer, as well as loyal to the public and government. Whistleblower statutes work to prohibit inappropriate dismissals in regards to employees and may even provide the whistleblower with hefty compensation. The statutes can also protect employees from other forms of retaliatory action.

Statutes Differ by State

Whistleblower statutes can take place at the federal and state level. In some states, only employees that work for government contractors or are public employees will be protected by whistleblower statutes. Statutes can also differ based on which company is being protected and on whom an employee may "blow the whistle." In some states, co-workers that help the whistleblower may be extended certain, special protections.

Financial Compensation

The actual monetary compensation whistleblowers can receive also differs, depending on the state with whistleblower statutes. In many states, an employee may only receive back pay as compensation or fringe benefits. However, it really depends on the whistleblower case at hand in the court system. In some cases, an employee may be eligible, according to the judgment of a judge, for a specific money award in relation to the illegal activity exposed. For example, in a state like South Carolina, if an employee complaint results in savings of funds on behalf of the public, then he or she may receive up to 25% of the savings or up to $2,000 in the first year following the case.

Federal vs. State Protection

Essentially, federal whistleblower statutes protect employees in similar ways like state whistleblower statutes. The differences are in how these federal statutes end up affecting employers, and not the employees as much. Employers often face much harsher penalties in regard to federal whistleblower statutes. However, the federal statutes can affect special cases in which an employee may risk his or her life and career by reporting criminal activities within a company or contractor that also negatively impacts the trust of the public.

Company Complaint Systems

Some companies have now put complaint systems into place, in which a whistleblower may feel more comfortable reporting illegal activity. If you are an employee that feels illegal activity is occurring in your organization, or you happen to know illegal information, then you should definitely consider taking advantage of your company's complaint system. Sometimes employees may be granted nearly complete anonymity through these complaint systems.

Legal Consultation

The key when facing a potential whistleblower case is to fully understand the state whistleblower statutes that affect your case, as well as possible federal statutes that may affect your case. In addition, you may want to consult a legal department or law firm outside of your company's legal department to avoid bias within your case. A company law firm may simply be preserving the reputation of the company, so it is in your best interest to consult with outside attorneys to help you with your case.