A person who reports his or her employer's illegal activity in order to help put a stop to it is often referred to as a "whistleblower." Although these whistleblowers play a crucial role in making sure that business is conducted safely and fairly, in reality they are often faced with harsh consequences for having the courage to make a stand.
Fortunately, there are a number of laws meant to protect whistleblowers from retaliation by their employers - and those laws are getting tougher.
Last year, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act to protect and reward individuals in certain types of whistleblower cases. The law applies to those who provide information to the Securities and Exchange Commission about violations of federal securities law.
Under the Dodd-Frank Act, it is illegal for an employer to retaliate against a whistleblower who provides information to the SEC, so long as he or she reasonably believes that the information related to a possible violation of securities law.
The new law also provides a financial incentive to whistleblowers to come forward. Whistleblowers who provide original information about securities fraud to the SEC can receive up to 30 percent of the funds recovered as a result. In some cases, these rewards can amount to tens of millions of dollars.
Since the Dodd-Frank Act was passed last year, whistleblower lawsuits have been on the rise. This trend seems to indicate that many employees who may have been reluctant to speak up in the past for fear of losing their jobs now have the confidence they need to take a stand, knowing that the law is on their side.
If you have questions about how this law applies to your specific situation, contact a California employment law attorney at our firm.
