In contrast to the situation in Australia, whistleblower laws in the US confer much greater protections and incentives for employees and are considered to be an essential feature of a robust corporate governance regime. In some situations, Australian employees may be eligible for the significant protections and incentives offered under these US laws.

Following the global financial crisis in 2010, the US Congress enacted legislation which established the US Securities and Investment Exchange (SEC) Whistleblower Program. The SEC Whistleblower Program offers eligible whistleblowers significant employment protections, monetary awards and the ability to anonymously report on possible securities violations.

Importantly, each year, Australia has ranked in the top five countries for individuals submitting information to the SEC Whistleblower Program. In August 2016, an Australian employee of BHP Billiton was awarded $3.75 million as a result of successful enforcement arising from information the employee provided to the SEC concerning BHP’s securities violations.

Employment Protections

The law in the United States is clear: employers may not, directly or indirectly, discharge, demote, suspend, threaten, harass, or in any way discriminate against whistleblowers who:

  • provide information to the SEC
  • initiate, testify in, or assist in an SEC investigation or related enforcement action
  • make any disclosures required or protected by law.

If a whistleblower is subjected to retaliation in violation of the law, they have the right to immediately sue their employers in federal court, without having to exhaust the administrative process before filing. The types of remedies available include reinstatement with equivalent seniority, back pay with interest, reimbursement of legal fees and other litigation related expenses.

SEC whistleblowers are able to remain anonymous, as long as they are legally represented and provide their legal representative with a signed copy of their whistleblower submission, signed under the penalty of perjury. However, at the point they apply to receive a monetary award, they are required to disclose their identity to the SEC, who will make every effort to keep it confidential.

Monetary Awards

Under the SEC Whistleblower Program, the SEC is required to pay eligible whistleblowers 10-30% of the monetary sanctions collected as a result of a successful SEC enforcement action or actions in which the sanctions exceed $1 million. In recent years, the SEC has secured more than $4 billion in monetary sanctions per year against offending companies.

A number of factors are considered by the SEC in determining the size of an award to a whistleblower, including:

  • any culpability of the whistleblower in the illegal activity
  • significance of the information provided
  • assistance provided by the whistleblower
  • participation of the whistleblower in internal reporting systems.