Astronology

Welcome, New Subscribers!

In 2011 we met many new friends during travels to several Human Resource related conferences across the United States.  We welcome many of you to Astron Solutions’ on-line newsletter, Astronology!  Astron Solutions publishes Astronology every other Tuesday, to keep you apprised of the latest in HR and at Astron Solutions.  To manage your subscription, please scroll to the bottom of this e-mail and access the links provided. 

Welcome to our family!

Fact or Fiction

In a recent Littler Mendelson Whistleblower Survey 41% of employers said they will be conducting whistleblower and / or retaliation-related training within the next 12 months.

FACT!

A recent study conducted by Littler Mendelson surveying senior executives, many of whom represent    S& P 500 organizations, cited that 41% will be conducting training within the next 12 months, and 27% will be considering adding training.

Whistleblowing in 2012

Whistleblowing. In today’s world this word can be synonymous with “snitch” or “truth-teller,” depending on which side you stand. Why is this subject so controversial? What can Human Resources do effectively act when faced with a whistleblowing situation?

Whistleblowing is such a critical topic that Littler Mendelson has created a stand-alone Whistleblowing & Retaliation Practice in recent months. They have observed an increase of 25% in retaliation and whistleblower cases since 2009. The recent Dodd-Frank Wall Street Reform and Consumer Protection Act is noted as being instrumental in this spike. The law was created mainly to protect the United States from experiencing another Madoff-like scandal. The Dodd-Frank Act also presents more questions in regards to ethics.

The Dodd-Frank Act includes a component that grants a whistleblower as much as 30% of court awards and settlements in actions filed by the Securities and Exchange Commission, or SEC. While the incentive is great and will motivate honest individuals to come forward with information they may fear would damage their reputations and livelihood, others can take advantage of the opportunity. For instance, Douglas Durand, former vice president of TAP Pharmaceutical Products, suspected foul play and spent seven months gathering evidence of fraud. Quitting within a year of gaining the position, he filed a lawsuit against TAP. Once the dust settled, Douglas gained an estimate of $126 million.  Some speculate that Douglas was playing both sides, setting up former colleagues while the FBI documented. Douglas, on the other hand, believes he was only protecting his name. Forbes Magazine also lists several other companies’ settlement payments and the rewards given to the whistleblowers:

Company	Government Loss	Settlement Paid	Whistleblower Reward
AstraZeneca	$39 Million	$355 Million	$47 Million
Schering-Plough	$293 Million	$345 Million	$32 Million
Warner-Lambert	$150 Million	$430 Million	$25 Million

Viewing the estimated amount of money a whistleblower can stand to gain if his / her claims are substantial, one can wonder if these whistleblowers are truly coming forth with this information ethically.  Or, are they being motivated by greed?

Regardless of the whistleblowers’ motivations, the SEC reported a total of 217 claims in 2011, and 2012 already has 13 claims. With these increases, HR needs to be concerned. Littler Mendelson surveyed senior executives on the new whistleblower laws.  67% anticipated whistleblower claims to increase within the next one to two years, and 65% are only moderately prepared to handle whistleblower claims.  Although Human Resources can’t be held responsible for the SEC whistleblowing investigations, we are responsible for making sure the organization does not retaliate against the employee. What can we do to effectively fulfill this role?

Russell E. Adler, an attorney with the Labor and Employment Practice Group of Pepper Hamilton, suggests the following:

1. Take everything seriously. Immediately consider the employee a whistleblower and follow the law in regards to his / her treatment. Dismissing a complaint can cost more in the end.
2. Communication with the supervisory chain should be considered. Remind the supervisors of the anti-retaliation laws, and simply inform them that the complaint is being investigated in accordance with policy.
3. Communicate with the employee on the organization’s policy on retaliation and inform him / her of the estimated time of the investigation.
4. If retaliation does occur, take immediate steps to stop it.

As whistleblowing becomes a growing concern for all organizations, it is important to stay well informed of organizational policies, and update policies if needed. It is better to be prepared than regret not taking preventative steps.

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