Retaliation against workplace whistleblowers is climbing, yet companies are still falling short in their responsiveness to employees and their transparency in reporting retaliations and misconduct, according to recent surveys.
In a supplemental report to its 2011 National Business Ethics Survey issued in September, the Ethics Resource Center (ERC) reported that more than 22% of employees who reported workplace misconduct in 2011 said they also experienced some form of retaliation—compared to 12% in 2007 and 15% in 2009. The ERC study included 4,683 responses from employees in the for-profit sector.
Another report, “Retaliation in the Workplace,” by ethics and compliance consulting firm Navex Global, finds that despite this rising trend, only 15% of 279 ethics and compliance professionals, including multinational and Fortune 500 organizations, say their organizations inform employees about retaliation trends and reports on suspected misconduct.
Further, 21% of those respondents have seen an increase in retaliation claims in the past year, NAVEX says. This supports ERC’s supplemental report, which found that retaliation rates increased 83% in the past five years.
For its study, NAVEX looked into retaliation prevention and the ways ethics and compliance programs can cultivate trust between workers and management. “There’s such a concern about retaliation,” says Shanti Atkins, president and chief strategy officer of NAVEX Global. “It’s a huge, increasing risk for organizations.”
Atkins explains that in the vast majority of cases, employers can be held liable for retaliation against employees who speak up to oppose wrongdoing.
From a legal perspective, she says, retaliation is defined as “a negative job action taken against an employee for exercising a right protected by law (including opposing wrongdoing) that would deter a reasonable employee from exercising that right again in the future.”
Supervisors and managers are most frequently in a position to take a negative job action, such as firing, demotion, denial of training, assignment of worse work schedules and poor performance evaluations, according to Atkins. Most retaliation is thus directly attributable to the employer, she adds, noting that employers can be held liable for that reason.
The only exception, Atkins notes, would be retaliation from co-workers. Even then, however, the employer could be held liable unless it could clearly demonstrate that it took reasonable actions to prevent the retaliation in the workplace.
Employers must focus on the rules against retaliation and the importance of reporting incidents, according to Atkins. The Sarbanes-Oxley whistleblower provision, for example, prohibits companies from retaliating against employees who report corporate wrongdoing. She points out that legal claims for retaliation can be brought against employers for retaliation under other statutes as well. Under Dodd-Frank, for example, the whistleblower only needs to demonstrate a reasonable belief there was a violation.
Employees have a reason to be concerned as well. The National Business Ethics Survey revealed that nearly half (45%) of employees observe misconduct each year. The majority (65%) of those who observe misconduct report it, but more than one in five employees (22%) who report experience retaliation for doing so.
The results of the Navex survey shows the importance of training and awareness programs for companies, to ensure the organization’s commitment not to engage in retaliation and to encourage employees to report misconduct, Atkins says. Seventy-five percent of the respondents say the best way to curb retaliatory behavior is through training, and half note that their companies do online training annually for employees and management.
But while such training can be helpful, it must extend beyond simple education about how to observe codes of conduct to “speak-up training” that lets employees know they’re expected to report wrongdoing, she says.
Part of employees’ hesitation in reporting, she also points out, stems from a lack of transparency when it comes to sharing ethics and compliance data. Employees are often left in the dark about what happens after they raise a concern, she says.
“Employees leave anonymous complaints on the company’s help line, speak to someone in human resources or to their manager but never hear anything about what happened,” she says.
While many organizations do an excellent job of investigating and resolving issues, they risk falling short on keeping all whistleblower information confidential, she says. Employees, however, often believe that their reports and what they say in meetings held in a closed environment are handled confidentially. Although investigators know that they need to keep the details of an investigation as private as possible, that doesn’t mean that absolutely no details are shared with anyone, she says.
“Indeed, the investigation process itself requires that some information be discussed with witnesses and others as the investigator seeks evidence related to the issue raised,” Atkins explains. “Investigators, however, if they have been trained properly, will share information only with those who have a ‘legitimate need to know.’”
At the end of an investigation, she says, many employers will provide the complainant and the accused feedback on the outcome, while some may even provide a summary of what was found—but the investigative report itself is highly confidential.
“Of course, there also is the risk that witnesses involved in the investigation share details with other employees (and perhaps even outside of the organizations), even though they have been warned not to,” she says.
Best practices dictate that a company should have a centralized intake system in which all complaints—which must be processed anonymously via a help line, a front-line manager, or legal channels—are logged, tracked, and appropriately escalated and managed. “But a missing component is the feedback to the very people you’re relying on to make the reports in the first place,” Atkins says. “That’s where we’re flagging a lack of transparency.”
She adds that this can be accomplished with aggregated data rather than specific case details, which can be used to point out key trends to the entire employee population, and show the outcomes of investigations. This also provides proof of an organization’s commitment to lack of retaliation and provides input that “becomes more real to employees than an online training program or a poster.”