Most US firms taking steps to encourage whistleblowers, says survey

Roughly two-thirds of US companies have taken steps in the past year to encourage employees to report potential fraud or other misconduct internally before turning to regulators amid a nationwide surge in encouragement of whistleblowing, according to Littler Mendelson’s second annual Executive Employer Survey.

Of 417 respondents, 66 percent reported that their organization encouraged employees to report potential misconduct or fraud internally before going to regulators as a whistleblower. Some 28 percent of respondents said they have taken no action and another 6 percent said they plan to take action within the next year. Littler Mendelson, a US labor and employment law consultant, conducted the survey by sending e-mails to in-house counsel, human resource professionals and C-suite executives in April and May. 

`The survey inexorably demonstrates that many companies are actively implementing or strongly considering changes to compliance programs to create more of an open forum so that people will be encouraged to come forward,’ says Gregory Keating, co-chair of Littler Mendelson’s whistleblowing and retaliation practice. `They are adopting new training and new protocols and managers are being vigilant not to be seen as retaliating. The engine that is whistleblowing continues to soar down the track.’

A recent surge in attention to whistleblowing stems mainly from an explosion in legislative action, an increase in whistleblowing rewards such as the payout program by the Securities and Exchange Commission, and Administrative Review Board opinions that have `dramatically broadened protections for whistleblowers and marked a 180 degree turn from the Bush administration era,’ says Keating.

The survey showed that 58 percent of respondents are improving anonymous reporting procedures within the company while 53 percent are holding training sessions for managers on how to respond to potential whistleblower complaints and to avoid the perception of retaliation. Fifty-two percent of respondents said they’re teaching employees about their companies’ whistleblower policies and 51 percent are also developing or strengthening internal whistleblowing programs.

The increase in protections for and public approval of whistleblowers in the US over the last five years has propelled the US to the forefront of whistleblowing regulation globally. That’s due not only to new laws and tougher enforcement, but also to ‘a very, very well-funded activist movement,’ says Keating.

He warns that the proliferation of legislation and approval for whistleblowers may lead to some employees taking advantage of this environment for personal gain. Unlike the US, in countries such as Sweden and Germany, whistleblowing is frowned upon, and there could be a pendulum swing in that direction in the US as well, he adds.

In addition to whistleblowing, the survey highlighted issues related to the potential impact that immigration law reform may have on employers and hiring practices. In light of the 2014 cap on H-1B visas for foreign skilled workers being reached in less than a week, which triggered a lottery that left some American employers unable to fill needed positions, the survey results reflect the potential for immigration reform to increase companies’ access to highly skilled workers.

‘The findings echo concerns expressed by the technology industry and others regarding problems with the current H-1B visa system and caps that do not meet employers’ demands,’ the survey report said. Elsewhere in the survey, 13 percent of companies reported they can’t find candidates with both US citizenship and an applicable degree or specialized skill while 30 percent said they’re unable to pay the salaries requested by job applicants.

In another survey chart, 63 percent of respondents said two areas where they expect immigration law reform to have potential for the most positive impact on employers and their hiring practices are 'Improving verification systems to prevent employers from hiring undocumented workers' and 'Increasing visas allotted to highly skilled foreign workers with STEM (Science, Technology, Engineering and Math) degrees from U.S. universities.'  

Still, Thomas Bender, co-managing director of Littler Mendelson, says the survey results show that very few companies expect immigration law reform to be disruptive and certainly not in a negative way for employers. He says the low percentages of companies citing low wages or work visas as a problem -- 6 percent in both cases -- suggests that immigration reform will likely not significantly alleviate employers’ recruitment challenges.