Calling the boss or calling the press: a comparison of British and American responses to internal and external whistleblowing.

• Published date: 22 December 2009
• Author: Mendelsohn, Jenny
• Date: 22 December 2009

When Time magazine asked former "Person of the Year" (1) and WorldCom whistleblower, Cynthia Cooper, if she would blow the whistle again, she replied, "Yes, I would. I really found myself at a crossroads where there was only one right path to take." (2) While Cooper believed that there was only "one right path to take," many other whistleblowers do not know what to do when they find themselves at such a crossroads. A potential whistleblower faces a difficult choice: she can either stick her neck out and report misconduct, risking potential retaliation from her employer, or she can keep quiet, keep her job and keep her employer's misconduct hidden.

Deciding whether to report, however, is only one fork in the road to blowing the whistle. After the whistleblower decides to disclose her employer's wrongdoing, she finds herself at a second crossroads: she now must select her avenue of reporting. She can either blow the whistle internally to her employer, or externally. (3) Her chosen path, whether internal or external, is critical in the American and British systems of whistleblower protection, as it determines what level of protection the whistleblower is granted. The American system gives greater protection to external reports, while the British system fiercely protects internal reports. Thus, contrary to Cooper's aforementioned assertion, the difference between American and British preferences for reporting avenues demonstrates that there is not a universal "right path" to whistleblowing. In this Note I will argue that there need not be "one right path." Rather, a model whistleblower protection law would not heavily favor either external or internal reporting; it would offer protection to both types of reports in certain instances. My proposed hybrid model would allow for the appropriate balance between internal and external reporting, while still ensuring that the whistleblower does not find herself at a dead end.

Part I of this Note will examine American whistleblower protections, specifically focusing on the federal statutory (4) and common law protections afforded to public and private employees. Part II will examine British whistleblower protections focusing on the Public Interest Disclosure Act ("PIDA"). In Part III, I will examine the preferences for, and benefits of, internal and external reporting. Finally, in Part IV, I will suggest a hybrid model of whistleblower protection that would give whistleblowers clearer guidance regarding which avenue of reporting is preferable, and would provide more appropriate protections for internal and external reports vis-a-vis the current American and British models.

I. THE AMERICAN SYSTEM

America has a convoluted "patchwork" (5) of whistleblower protections for private and public employees. Yet despite the incomprehensibility of much of American whistleblower law, it still clearly favors external reporting.

A. Common Law Protections for the American Private Employee

While common law protections for the privately employed American whistleblower are limited, the law still evinces a slight preference for external reporting. American common law protection is limited largely because of the at-will employment doctrine. (6) Recognizing the harshness of the American rule of at-will employment, specifically in the whistleblower context, courts began limiting the employers' ability to terminate whistleblowers under the public policy exception to the at-will doctrine. (7)

The whistleblowing public policy exception "protects employees fired for reporting or complaining about their employer's unlawful acts." (8) Whistleblower claims, however, are typically only protected under this public policy exception if the employee reports misconduct that implicates threats to public health and safety. (9) For example, in Hayes v. Eateries, Inc. (10) an employee was fired after he reported (11) and attempted to investigate another employee's attempt to embezzle from his employer. (12) The court held that it did not matter whether the Hayes employee reported internally or externally, he still had not reported pursuant to "a clear and compelling public policy." (13)

While the Hayes court did not favor either internal or external reporting, jurisdictions recognizing the public policy exception to the at-will rule often dismiss cases where an employee only internally reports wrongdoing (14) on the theory that internal reporting "does not further the public interest of detection and enforcement." (15) Such internal reporting is also often discouraged because it disrupts an employer's unfettered discretionary control of his workplace. (16) Nonetheless, a limited minority of courts still extend common law protection to purely internal reports. (17)

The First Amendment sometimes provides an additional source of common law whistleblower protection for the private sector employee. (18) Although First Amendment protection is traditionally only granted to public employees, private employees have received First Amendment protection, successfully arguing that this amendment is a valid source of public policy in its own right. (19) Jurisdictions are mixed, however, regarding whether the Constitution is a valid source of public policy and, accordingly, whether the First Amendment can support a whistleblowing public policy exception claim. Only a handful of courts have ever afforded private employees First Amendment protection, and even when courts have recognized the First Amendment as a source, they have reasoned that the First Amendment's state action requirement is not met in a private employment relationship.

As with the traditional public policy exception cases, the First Amendment cases in the private sector demonstrate American ambivalence towards preferring internal or external avenues of reporting, leaving the private sector employee with little guidance regarding who he should report to should his employer commit malfeasance. Unfortunately, the landscape of whistleblower protection for public employees in the United States is no less convoluted.

B. Common Law Protections for the American Public Employee

As opposed to common law protection for the privately employed whistleblower, the common law protections for public employees are extensive (20) and explicitly favor external reporting. The First Amendment is the primary source of common law protection for public employee whistleblowers.

The First Amendment was established as a source of whistleblower protection for public employees in the landmark case of Pickering v. Board of Education. (21) In this case, the Supreme Court held that a public school teacher could not be fired for speaking out on issues of public concern. (22) The resulting Pickering test requires that courts balance whether the employee was speaking as a citizen on a matter of public concern, against the employer's need for control and harmony in his workplace, when deciding if a termination based on the employee's comments violated the employee's First Amendment rights. (23) Connick v. Myers (24) subsequently amended this Pickering test in 1983 by adding a threshold requirement that the employee be speaking on a matter of public concern before the Piekering balancing test could even be applied. (25)

Together, Pickering and Connick established that "employees speak on matters of public concern [sufficient for whistleblower protection] when they report dereliction of public duties, corruption, or threats to public health and safety." (26) While this public concern test affords whistleblowers some protection, this requirement has also effectively denied protection to employees who report what a court deems are "grievances or criticism concerning workplace conditions." (27) First Amendment whistleblower protection, therefore, inherently discourages internal whistleblowing since any sort of internal grievance might be viewed as just that--not as speech on a matter of public concern.

This explicit disdain for internal reporting was echoed in a recent First Amendment case, Gareetti v. Ceballos. (28) Known by some as "the worst whistleblower decision," (29) Garcetti essentially held that "when public employees make statements pursuant to their official duties, (30) the employees are not speaking as citizens for First Amendment purposes, and the Constitution does not insulate their communications from employer discipline." (31)

Aside from requiring employees to speak as citizens when reporting misconduct of their public employer, the Court in Garcetti was "divided on whether to extend common law protection equally between external and internal whistleblowing." (32) Justice Stevens in his dissent declared that the majority's refusal to protect speech made by a public employee pursuant to his job duties created a "perverse" incentive whereby employees might "bypass their employer-specified channels of resolution and voice their concerns in public, namely through the media." (33)

Thus, Garcetti, Pickering, and Connick demonstrate that protection of whistleblower speech is largely contingent on a court's fluid interpretation of what constitutes a matter of public concern, and what speech might disrupt the employer's business objectives. Furthermore, these previously discussed common law protections, which only protect speech on matters of public concern while ignoring speech relating to the workplace, afford greater protection to external reports. These cases express a distinct preference for external reporting and this tacit encouragement of reports to the media stands in direct opposition to the United Kingdom's approach to whistleblowing addressed in Part II.

C. Statutory Protections for the American Employee

Statutory provisions are the chief source of American whistleblower protection as they offer more specific and explicit protection for those who choose to report. Some statutes apply to both private and public sector employees while others apply only to public employees. (34)

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