By Christine Day
Legal Editor, LawRoom
Whistleblower hotlines for reporting a company or organization’s misbehavior are common ways for employees to report unsafe conduct and violations of law and policy. Employees can usually report internally or externally.
In addition to company hotlines, whistleblower hotlines are also operated by government agencies such as the Securities and Exchange Commission, Environmental Protection Agency, Occupational Safety and Health Administration (OSHA), the Department of Veterans Affairs, and the Department of Defense. But as the US Merit Systems Protection Board (MSPB) found out in its 2010 survey regarding perceptions related to whistleblowing, a third of federal employees who felt they’d been identified as a whistleblower also perceived either threats or acts or reprisal, or both. But saving lives, and whether agencies would act on reports, were more important to the employees than fear of reprisal.
“The most important step that agencies can take to prevent wrongdoing,” said the MSPB, “may be the creation of a culture that supports whistleblowing.”
Although the term “whistleblower” is sometimes used only in the context of an employee reporting to an outside agency, employers benefit when they encourage early reporting by internal whistleblowers. According to a Santa Clara University report on encouraging internal whistleblowing:
the earliest questions are the best questions. They enable the organization to solve a concern while it is small, well before it escalates into a large problem, well before much damage occurs, and well before employees are likely to find the “hard evidence” society wants external whistleblowers to deliver.
In 1963 President John Kennedy established a hotline to the Kremlin in Moscow. During the 1962 Cuban Missile Crisis, the United States and the USSR had to contend with communication delays because messages had to be encrypted and then sent by telegraph or radio. Afterward, the hotline was installed to avoid the chance of future “misunderstandings” and to ensure “quick and reliable communication.”
So hotlines are necessary for quickly conveying important information.
But are hotlines enough?
Ray Dunkle of insidecounsel.com discusses hotlines in the context of employees reporting things like fraud and harassment. According to Dunkle, “multiple reporting channels should be provided” so that there are no obstacles when employees want to report. Dunkle notes that:
Because reporters are often emotional, reports tend to be more comprehensive and understandable when live operators gather the details.
However, he also states that:
Web reporting can uncover very valuable information. Many reporters find web-reporting less intimidating and feel less rushed. Accordingly, web-reporters are better able to articulate important details.
In a Harvard Law School forum on corporate governance and financial regulation, Bill Libit agrees that “Depending on a number of factors (e.g., location, educational background, age and level of employment), employees may differ on their preferred method of reporting compliance concerns.” One whistleblower reporting service states that some employees may prefer to use email so that they can take their time writing down what they know, and step away from the computer for a time if they want to, while other employees may prefer the confidentiality of web-based reporting. Still others may want to report to someone face-to-face.
Libit also suggests that a hotline should have multiple uses, such as also being a helpline, “as this may alter the perception or negativity associated with hotlines and facilitate reducing the fear of calling and the associated stigma.” The Santa Clara University article onencouraging internal whistleblowing makes the same point, stating that reporting channels called Hotline or Alert Line are seen as whistleblower emergency lines for reporting crimes in progress, while hotlines with “friendly names like Open Line or Help Line” are seen as mentoring lines and receive about six times as many calls per year.
Both Dunkle and Libit agree that employees who want to report anonymously may feel that a hotline or reporting system operated by a third party is more trustworthy than one operated by the employer. According to Libit:
employees tend to trust independently managed more than internally maintained hotlines. Further, third-party providers generally have more experience in managing whistleblower calls and may provide company boards and management with insightful hotline data, reports and analyses of the effectiveness of the hotline.
The Santa Clara University article discusses how employees make the decision to report internally or externally:
Field experience answering employee calls indicates people blow external whistles when they hope outsiders will fix the problem but believe the company won’t listen to them. They blow internal whistles when they hope the company will fix the problem but believe the managers won’t listen to them. They feel no need to blow any whistle when they believe—trust—a manager will listen to them and fix the problem. To eliminate the need for any whistleblowing, an organization must build a culture of trust.
No matter what system it uses, an employer must let employees know that ethical leadership starts at the top of the organization and that whistleblowers won’t faceretaliation. They should also be sure that employees know what will happen after a report is made. LawRoom provides ethics and compliance training that can help organizations create a culture of compliance where employees feel free to point out potential problems.
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Christine Day is a legal editor at LawRoom. She writes about employment law issues and tracks case law and legislative and regulatory updates. Before joining LawRoom she worked in legal publishing, researching and writing about tax law, business law, and employment law. She earned her JD from the University of San Diego Law School and her BA from the University of Southern California.