Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
According to the recent Littler Mendelson Whistleblower Survey (pdf), companies are increasingly concerned about the potential impact of whistleblower claims on their organizations, although the level of concern has not fully peaked as companies are still adapting to the new regulatory environment created by Dodd-Frank:
- 73% of respondents identified whistleblowing and retaliation as an emerging risk area and 96% are either very concerned or moderately concerned about potential whistleblower claims.
- Although a high percentage of respondents (45%) indicated that their company had experienced a whistleblower claim in the last 12-24 months, 67% anticipated whistleblower claims to increase within the next 12-24 months.
- While respondents were undoubtedly concerned about whistleblowing activity and were anticipating an increase in claims, the financial incentives created by Dodd-Frank are relatively new and it is anticipated that the level of concern will rise in the next 12-24 months as companies continue to feel the impact of these changes.
- Respondents also expressed concern that provisions within Dodd-Frank could undermine their compliance programs. Only 12% of respondents indicated this was not a concern, while 51% were concerned and 37% remain unclear on the impact on their current procedures.
Littler surveyed 51 senior legal, compliance and human resources executives at publicly traded or highly regulated companies, the vast majority of which were based in the United States. Of those participating, by Standard and Poor's definitions, 60% were LargeCap companies, 26% were MidCap and 14% were SmallCap.
The survey also found that companies were somewhat confident about their ability to protect against whistleblower claims, but were taking steps to better prepare and train management on compliance with government regulations and proper handling of whistleblower claims:
- The majority of respondents (65%) believed that their companies were only moderately prepared to handle whistleblower claims and 8% were not prepared at all. Furthermore, only 54% were confident that executives in their organizations understand unlawful retaliation concepts and knew not to engage in such conduct, while 32% were not confident and 14% did not know.
- 84% of respondents indicated their companies had taken preventative steps to protect against unlawful retaliation claims. In addition, whistleblower and/or retaliation-related training appeared to be prevalent at the companies surveyed, with 41% conducting training in the next 12 months, 18% planning to do so and 27% considering implementing such training.
- Respondents from LargeCap companies expressed greater concern about whistleblower claims, with 73% anticipating claims will increase within the next 12-24 months (compared to 66% of all respondents). A higher percentage of respondents from LargeCap companies indicated they have taken preventative steps to protect against unlawful retaliation claims (93%) and 59% will be conducting training in the next 12 months.
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