Does It Finally Pay To Be A Whistleblower?
The news has been filled lately with stories about whistleblowers getting staggeringly big pay outs for exposing wrong-doing at their workplaces. On Tuesday, Associated Press reported that former UBS banker Bradley Birkenfeld got what may be the largest award ever -- $104 million from the Internal Revenue Service for his tips on a massive tax fraud conspiracy at UBS. Earlier this year, Linda Szymoniak made news earlier this year when she and five other American workers were awarded $46.5 million for blowing the whistle on abuses by the major banks.
The Ethics Resource Center analyzed data from its 2011 study of 2,100 employees at large U.S. companies with annual revenues of $5 billion. And it found that while more workers are reporting wrongdoing, there has been an even bigger increase in the number of whistleblowers who say they've experienced retaliation.
Two out of 3 employees who have seen misconduct reported it in 2011, up from 58 percent in 2007. But 22 percent of them said they experienced retaliation as a result in 2011, up from 15 percent in 2009 and just 12 percent in 2007. And retaliation against workers is prevalent at companies that have strong policies governing ethics. (See the chart below.)
The most common form of retaliation reported by workers was being passed over for promotions or raises (55 percent); but ERC also found a big jump in "physical" attacks, resulting in harm to the workers' property or themselves.
A whopping 31 percent reported such physical retaliation in 2011, versus just 4 percent in 2009.
"This is very surprising number to us," Patricia Harned, president of ERC, said in an interview. "How can that possibly be? This is an area we need to explore more."
According to ERC, these factors seem to heighten a worker's risk of retaliation:
- Working at a company "in transition": Employees in companies that recently had mergers were twice as likely to suffer blowback from reporting misconduct.
- Being the boss: Surprisingly, managers are not insulated from reprisals. In fact, managers who report misconduct are now more likely to experience reprisals than non-management employees -- 24 percent versus 19 percent. In fact, the biggest jump in retaliation rates was among senior managers, the study found.
- Employers that have "strong ethical cultures": More than 1 out of every 4 whistleblowing workers at ethical companies (27 percent) complained of retaliation, compared to just 15 percent of those at companies that had "weak" ethical cultures. ERC theorizes that this may be due to the fact that in weaker cultures, "the rate is already high and might have hits its upper limit."
The ERC report, however, does note that retaliation is far less common when top management is perceived as being "trustworthy" and "committed to ethics." In companies where the employees said "top management would not get away with breaking the rules," only 17 percent of workers said they'd been retaliated against; the number jumped to 42 percent when workers thought top managers could get away with breaking the rules.
"I recognize that mine's a very, very happening ending," Szymoniak, the whistleblower, told CNNMoney after getting her multi-million dollar pay out. "I know there are plenty of people who have tried as hard as I have and won't see these kinds of results."
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