How Employers Should Handle Whistleblower Complaints

Whistleblowers take a considerable risk when they speak up about wrongdoing. Some issues may drag on for months or years before an employee calls attention to them. If your company has never received a complaint from a whistleblower, it may only be a matter of time before you will need to handle unfavorable allegations that will require an investigation.

Most companies will eventually need to address whistleblowers. Here are some tips for handling the situation to reduce the amount of harm it may do to your company. 

Take All Complaints from Your Employees Seriously 

Anonymous tips can include vague information, and the allegations could seem baseless at first. Still, it’s important to take complaints seriously. Shareholders of public corporations can especially gain peace of mind when you launch an objective investigation. This could also look good to the United States Department of Justice and the Securities and Exchange Commission, government agencies that might decide to impose civil or criminal penalties against your company. 

Don’t Retaliate Against Whistleblowers

Avoid trying to punish the whistleblower or change their relationship with the company. Enact a strict policy that prohibits your employees from taking adverse actions, such as demotion, termination, or creating a hostile work environment. Whistleblower protections exist in federal and state laws to protect employees who report wrongdoing against retaliation. If there is evidence that retaliation took place, the whistleblower can use it as ammunition to file a lawsuit against your company. 

Develop a Plan for an Internal Investigation

Once you receive a complaint and decide to investigate it, your in-house counsel must have a comprehensive plan to conduct a thorough, objective, and credible investigation. 

First, consider the scope of the investigation. This may be influenced by the severity of the allegations, the possibility of shareholder litigation, or a potential breach of company policy. The scope may be determined after consulting with outside counsel.

Will your company need to hire outside counsel? In-house counsel can serve many useful purposes, and managers may be best positioned to conduct the investigation due to their familiarity with the company, its employees, policies, and more. It also tends to be more cost-effective to allow your own personnel to conduct investigations, and you might get a better response from your employees because they’re being questioned by familiar faces. 

Still, outside counsel serves the crucial purpose of making the investigation completely independent of your company. Outside counsel may also bring unique expertise and a depth of knowledge that can help guide your company through unknown obstacles. The DOJ and SEC may also look more favorably onto an independent investigation conducted by outside counsel. The ultimate goal when using outside counsel is to conduct an investigation that is as objective and credible as possible.

You should also take into consideration the timing of the investigation. Is your company about to face a government investigation? If so, your own investigation should finish before you cooperate with the government. It should still allow time to interview witnesses and review all relevant documents closely. 

It’s also necessary to consider the financial cost of the investigation. While in-house counsel might be tempted to cut costs, outside counsel may invest more resources into a complete investigation into potentially damaging allegations. 

When conducting any investigation, it’s important to protect any hard evidence of or against wrongdoing. As soon as your investigation begins, you must implement a document prevention and retention policy. Send a notice to all employees, alerting them not to destroy, alter, or conceal communications. These policies should exist whether or not the government issued a subpoena because falsifying, destroying, or hiding evidence damages the credibility of any inquiry. Your in-house counsel should also collaborate with your IT department to create backups of all relevant data.

Contact The Davidovich Law Firm for Critical Counsel Regarding Whistleblower Complaints in Denver

Executives looking to protect their companies need sound advice during a grave situation. If you must respond to allegations of illegal conduct raised by a whistleblower, it’s in your best interests to seek top legal counsel from an experienced employment lawyer. 

Attorney Nathan Davidovich of Denver has served employers for more than 55 years, providing competent legal counsel throughout his entire career. At The Davidovich Law Firm, our goal is to help you protect your business and avoid adverse actions so you can maintain a positive reputation.

For a consultation regarding whistleblower complaints, contact Nathan by calling (303) 825-1325 or complete our contact form.