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Monetary Rewards Make Good Incentive for Whistleblowers, but Aren’t the Only Reason They Report Wrongdoing

Over the last decade, a variety of programs have started up in federal agencies that incentivize whistleblowers to come forward with tips about wrongdoing within their companies or organizations, and potentially share in the money recovered through sanctions. The most well-known of these programs is the Securities and Exchange Commission’s (SEC’s) whistleblower program, but several other federal agencies also have their own whistleblower programs as well.

The potential for monetary reward has definitely been a significant factor in encouraging would-be whistleblowers to come forward when they might otherwise not have. Whistleblowers are often concerned about losing their jobs for speaking up, so having financial incentive to do so means they won’t suffer nearly as big of a blow if they do end up needing to seek work elsewhere.

However, there is evidence to indicate the money is not the only reason whistleblowers report wrongdoing.

Typical actions of whistleblowers

It is important to note that approximately 80 percent of whistleblowers report their findings internally through their proper company channels first. If their primary goal was to make money, they would be less likely to report internally—they might just go straight to the SEC or another agency.

In fact, many people who blow the whistle on wrongdoing do so because their conscience tells them to—they know the actions are wrong, and feel it their duty to say something. The award simply acts as one final push for them to come forward and feel more comfortable doing so.

It is a good idea for companies to establish a strong culture of transparency and supporting whistleblowers. Ultimately, it is only a fraction of whistleblowers who end up with big SEC awards—the vast majority will not end up having that kind of major financial incentive. Encouraging them in other ways is crucial to ensuring whistleblowers come forward with information when they have it.

For more information about the steps you can take to protect yourself when you act as a whistleblower, contact an experienced whistleblower lawyer at Kardell Law Group.

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