Who Blows the Whistle?

We see whistleblowers in the news every day, like Michael Bawduniak (who blew the whistle on Biogen’s kickback schemes) and Frances Haugen (who shared Facebook’s secrets with the world). But these high-profile whistleblowers are the exception, not the rule, as are both the costs and rewards these publicly lauded figures incur.

The DOJ doesn’t provide the kind of statistics that would help us understand who the “typical” whistleblower is, and often the information is hidden behind a seal or a confidential settlement. In 2021, two Harvard researchers looked at complaints filed in 1,926 False Claims Act qui tam suits between 1994 and 2012, involving 2,318 individual whistleblowers. Their analysis was directed at determining the effect of “cash-for-information” programs on court filings and whistleblower behavior, but the study provides some insight into who whistleblowers are and how they fare after the litigation is completed.

The popular image of a whistleblower is a courageous employee, usually a manager or executive, who observes misconduct and risks everything to uncover it. As it turns out, that picture is only partially correct.

Most False Claims Act suits—70%—are filed by employees, but customers (4.5%), contractors (2.2%), suppliers (0.5%), and competitors (0.4%) also blow the whistle, as do myriad others with connections to firms behaving badly.

Those employees are mostly rank-and-file line workers (59%); another quarter are in middle management (27%). Just 4% of whistleblowers are in upper management. They are also comparatively well off: their average income one year before filing a qui tam case is $75,592.(Median income in 2012, the last year for which the researchers had data, was about $50,000.)

More than half of employee whistleblowers—53.8%—report the misconduct internally before they report to a regulatory agency or pursue a False Claims Act action. Employees who do try to report internally tend to report to top management (37.5%) or their direct supervisor (34.4%). Reports to legal compliance and HR are much less frequent, at 9.6% and 3.9%, respectively. The companies respond most often by simply ignoring the report (more than 60%). Only 6% result in an internal investigation.

Whistleblowers who don’t report first are balancing the likelihood of being ignored against the real possibility of retaliation. Those who don’t report internally first, when they give a reason for avoiding internal channels, most often point to fear of retaliation. And that fear is valid; 70% of those who report internally describe some form of retaliation in their qui tam complaints, including firing, demotion, suspension, and harassment and threats. Less than half of employee whistleblowers (45%) still work at the same firm one year after filing a qui tam suit. On average, they are without a job for just over a year.

Whistleblowers pay a very real price for speaking up, one that is not always offset by the reward. The average reward is $140,000, and it’s paid 4 to 5 years after the complaint is filed. But whistleblowers see their income fall after reporting, by as much as 8.6%, and those reductions persist for a decade after filing. And whistleblowers pay in other ways as well — 16% leave their state to find other work, and more than a third (35%) end up working in an entirely different industry.

MaryAnne Hamilton is an Attorney at Miller Law Group, PLLC