Whistleblower laws at the federal and state level aim to create a safe avenue for individuals to report wrongdoing, but statutes on what is considered protected activity have specific limitations for in-house counsel. So what happens when in-house attorneys who want to report violations are bound by attorney-client privilege and ethics rules?
There are two types of whistleblower claims: bounty and qui tam, and retaliation cases.
The False Claims Act, the Internal Revenue Service and The Dodd–Frank Wall Street Reform and Consumer Protection Act include whistleblower protection provisions. U.S. Securities and Exchange Commission rules stipulate that in a bounty case, individuals reporting “original information” to federal or state government may join in a suit brought by the government or prosecute it themselves. In the event of a successful federal recovery of more than $1 million, the relator may obtain 15 to 30 percent of the funds.
Ogborn Mihm partner Clayton Wire noted that there’s a difference in the way the two types of cases have been approached, and that protections seem to be stronger for retaliation cases while he has seen case law that aims to discourage bounty cases from coming to light.