Examples of Whistleblowing in Business

Whistleblowers are company employees who report inappropriate or unethical behavior they discover at work. Whistle-blowing covers many areas of business in every industry, including but not limited to internal discrimination, predatory sales practices and dangerous working conditions. Business owners can learn the ramifications of well-known whistleblower examples to avoid catastrophic legal and financial penalties.

JP Morgan Chase: Alayne Fleischmann

Alayne Fleischmann was a securities attorney that worked for JP Morgan Chase. In her tenure at the company, Fleischmann witnessed repeated and egregious acts of securities fraud. Upon taking action, Fleischmann found herself unable to find a job in spite of her impeccable credentials. With a public lawsuit about to take center stage in the media, JP Morgan Chase settled with Fleischmann to keep the details of the fraud confidential. Fleischman received $9 billion, while JP Morgan Chase settled the case behind closed doors.

Kerr-McGee Nuclear Power Plant: Karen Silkwood

Karen Silkwood's story was memorialized in the movie starring Cher, Silkwood. Karen Silkwood worked for the Kerr-McGee Nuclear Power Plant and took action by reporting the company to the Atomic Energy Commission. Nuclear power plants are dangerous environments to work in under the safest of conditions. Silkwood noted numerous conditions that put herself and coworkers at increased risk, noting the major health and safety violations the company knew about.

Karen Silkwood could not enjoy her success in creating a safer standard in nuclear plant working conditions, because she was mysteriously found dead when she threatened company officials with taking her evidence to the media, namely The New York Times.

Enron: Sherron Watkins

Enron suffered one of the biggest corporate scandals in history thanks to the company's then-vice president, Sherron Watkins. She wrote a letter to her boss regarding the fraudulent accounting practices that equated Enron stock more to a Ponzi scheme than a publicly traded company. She demanded that the company take action. Her letter became public five months after she wrote it and was fodder for national outrage against those heading Enron, along with its accounting firm, Arthur Andersen.

In spite of the public and congressional scrutiny that followed the whistle-blowing, Watkins continued to work for Enron without being retaliated against.

Tip

Whistleblowers are protected from employer retaliation under the Whistleblower Protection Act. Employers must allow investigations to occur without taking action against the reporting party. Understand the laws to ensure you are not subject to whistle-blowing, and follow legal protocol should someone report the company for infractions.