CHAPTER § 8.01 General

• Jurisdiction: United States

§ 8.01 General

[1] Introduction

Whistleblowing is becoming increasingly common in the pharmaceutical industry, in part because of the nature of the industry and the significant legal regulations governing the marketing, promotion, and selling of pharmaceutical products. As virtually all companies now know, certain federal (and often state) statutes allow employees to collect money for "blowing the whistle" on their employer, and the amount at stake can be substantial. In 2012, the largest health care settlement in U.S. history was reached after an individual sued his former employer under the False Claims Act. As a result, that employer—a pharmaceutical company—paid $3 billion to settle the case.¹

However, it does not always end there. After paying the government, the company may take some type of reprisal against the whistleblower. The whistleblower may suffer an adverse employment action like a transfer, reduction in hours, or termination because they blew the whistle. In such cases where employers retaliate, former employees may be awarded a significant payout for emotional and economic damages.

Given the money at stake, as well as the company's reputation, it is vitally important that management understands the framework of various whistleblower-retaliation provisions, and how to properly manage whistleblowers in the organization. This chapter provides both a history of the legal provisions governing whistleblower protection and guidance for properly and lawfully dealing with employees who make claims against the company.

[2] The Nature of a Whistleblower

In simplest terms, a whistleblower is a person who raises a concern about misconduct occurring within an organization. Usually, the whistleblower is an employee of the organization. Whistleblowers have ranged from hourly part-time employees to some of the most senior-level executives. Often, but not always, they have access to confidential company information such as product-, financial-, or process-related information.

Whistleblower complaints can be internal or external. Internal whistleblowers make their complaint within the organization, such as, for example, by calling a compliance hotline, sending an email to a superior, or informing the human-resources department of a concern. External whistleblowers voice their concerns to state or federal regulators, law-enforcement agencies, or advocacy groups. Sometimes, these whistleblowers also go to the media.

[3] Whistleblowers Are Protected from...