Littler Employer Survey Highlights Whistleblowing Concerns, Regulatory Enforcement

Author: Marta Moakley, XpertHR Legal Editor

July 18, 2014

A new employer survey by law firm Littler highlights employers' concerns with respect to regulatory enforcement and whistleblowing activities. Over 500 HR professionals, in-house counsel and corporate executives completed the survey.

Whistleblower Bounties

The availability of bounties for whistleblowers, such as those available through the Securities and Exchange Commission's Office of the Whistleblower, may be increasing incidences of external whistleblowing, according to survey respondents. Fifty-three percent of employers said that whistleblowers would be more likely to report instances of fraud or misconduct to regulators rather than within the organization. And Edward Ellis, Shareholder and Co-Chair of Littler's Whistleblowing and Retaliation Practice Group, calls the SEC's October 2013 $14 million payout to a whistleblower the "tip of the iceberg." The SEC's Office of the Whistleblower is "getting something like 300 tips a month," Ellis explains. "Those are big numbers." Although not all tips provide actionable information, the next big bounty award could be announced at any time.

This has been a recurring concern for organizations trying to focus on a corporate culture of integrity. In fact, 56 percent of respondents report taking proactive steps to address whistleblowing concerns. But Ellis cautions that not all proactive steps are "the right steps." "Some companies try to shut information down," explains Ellis, sometimes by insisting on employee confidentiality or nondisclosure agreements.

Ellis explains that the most effective proactive measures focus on proper training. Employers should "train line managers, compliance officers and HR to recognize problems early, to have a sense of the reporting system and to take complaints seriously." According to Ellis, a wise employer would view a whistleblower as "an asset."

Uptick in Enhanced Enforcement, Employee Lawsuits

Littler's survey provided information on other trending employer concerns. Specifically:

  • Fifty-six percent of survey respondents identified rulemaking and enhanced enforcement by federal agencies as the most troubling outcome of a divided government. The Obama administration's "income inequality" agenda, emphasizing minimum wage increases and overtime pay expansion, was of concern to 29 percent of respondents.
  • Forty-eight percent of survey respondents reported that current economic conditions are leading certain employees to bring more lawsuits or charges against employers, a 25 percentage-point increase from last year's survey.
  • Eighty-eight percent of respondents felt that workforce retention presented the most difficulty in managing their workforce.