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March 10, 2009

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We hear lots of talk about corporate ethics programs and newly appointed "Ethics Officers", and it may seem as though companies are serious about identifying and addressing ethical issues, but the hard evidence for that is often somewhat lacking. Although programs have been put into place, we still hear too many sad tales of what REALLY happens when some individuals choose to "blow the whistle" on their employer. Hollywood has glamorized many of these situations but the results are typically not as successful as they are sometimes made out to appear.

Whistle-blowing can occur in various ways, sometimes through anonymous tips to regulatory or enforcement agencies, and more frequently it is becoming a public process as individuals are filing lawsuits in increasingly large numbers. In some cases individuals may have far greater incentive for doing so than merely keeping a clear conscience for doing the right thing. One piece of legislation, the federal False Claims Act, gives people the right to sue companies (and individuals) for cheating the federal government, and if they prevail they can collect a sizable reward that is based on a percentage of the penalty assigned for the respective violation. In some cases, individuals have received rewards for several million dollars.

However, many more individuals end up spending significant amounts of money on legal fees pursuing legal battles that last for many years, often without achieving any desirable result, and in many cases with very harsh consequences. For example, according to one university study approximately 60% of whiste-blowers are fired or forced to resign, and many who tough it out and remain with their employer are harassed, threatened, alienated, and otherwise intentionally made miserable by management and/or their co-workers.

Individuals who were once regarded as prized employees by management suddenly have received unsatisfactory performance reviews, been reassigned, and/or have been accused of wrong-doing themselves. Additionally, one research study indicated that more than 50% of whistle-blowers were subjected to harassment by their co-workers, including from those who had nothing to do with the alleged ethical issues. Such retaliation often occurs regardless of the serious nature of the alleged ethical wrongdoing, and is condoned or otherwise overlooked by employers. These situations end up causing the individual serious emotional trauma and physical distress, and impact family members as well. One study reported that 80% of whistle-blowers end up with stress-related illnesses, and 60% indicated that their spouse had been similarly impacted by the ordeal.

Frequently the adverse impact of whistle-blowing results in legal action taken by these individuals in regard to the harassment and/or unfair employment practices they have experienced. The problems are evident but the solutions may not be so easy to see for some. The increasing prevalence of whistle-blowing activity and unfair employment practices complaints both provide clear evidence that employees expect more ethical conduct from their employers (and their co-workers) -- and both should be regarded as serious issues in need of immediate attention.

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Filed Under: Workplace Issues

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