In Search of a Model for the Legal Protection of a Whistleblower in the Workplace in Poland. A legal and comparative study. Lukasz Bolesta
compensation for any damage suffered as a result of discrimination, including legal costs, fees of experts, and lawyer fees.136
However, practice shows that proceedings rarely end at this point, as parties to a dispute have a wide range of appeal possibilities against a decision of the Secretary.137
1.2.1.4 The Dodd-Frank Wall Street Reform and Consumer Protection Act
The Dodd-Frank Wall Street Reform and Consumer Protection Act138 signed by President Barack Obama on July 21, 2010, was a response to the 2008 financial crisis.139 It aimed to transform the US regulatory system in a number of areas, including, but not limited to, consumer protection, trade restrictions, credit ratings, financial product regulation, corporate ←34 | 35→governance, disclosure, and transparency.140 The adoption of the law was also a further significant step towards enhancing the protection of whistleblowers in the United States. Although the Act primarily regulated functioning of financial markets and protection of consumer interests, it also contained protection measures and a number of incentives for whistleblowers.141 Pursuant to section 922, a new section 21F was added to the Securities Trading Act of 1934. The Act gave whistleblowers increased protection against employer retaliation, guaranteed confidentiality, and provided the opportunity to receive a financial award.142
Section 15 U.S.C. § 78u-6(a)(6) of the Dodd-Frank Act defines the term “whistleblower” as one or more individuals acting jointly, who provide information about a violation of securities laws to the Commission [SEC]143 in a way determined by rule or regulation of the Commission.144 Furthermore, according to the regulations issued by the SEC after the adoption of this law, a whistleblower must have a “reasonable belief” that the aforementioned regulations have been infringed.145 Only natural persons may report infringements.
The Dodd-Frank Act prohibits retaliatory measures against whistleblowers, who disclose information of violations in accordance with procedures. Whistleblowers who experience such retaliation have the right to be reinstated with the length of service they would have enjoyed had they not disclosed the information, double the amount of outstanding wages with interest, along with compensation for legal fees, litigation costs, ←35 | 36→and court fees.146 The protection against retaliation covers whistleblowers regardless of whether they have reported violations internally within the company or directly to the SEC.147
A particularly effective way of encouraging whistleblowers to act was to create the possibility of receiving financial incentive for the actions.148 Providing important and previously unknown information to SEC by an authorized whistleblower – which leads to the imposition of sanctions on the entity infringing the law in a specified manner – entitles the person who reports the irregularities to receive a reward of 10–30 % of the funds, which the entity will be forced to pay for its infringements.149 Whistleblowers may receive a financial award if their information leads to effective securities law enforcement actions.150 The Act authorized the Commission to grant financial awards to eligible individuals if the sanctions imposed exceed one million dollars.151 A high level of potential reward that a whistleblower may receive is intended to secure the existence of such a person in the event of loss of job, breakdown of professional career or even the need to change the place of residence.152 SEC may exercise its freedom in determining the appropriate percentage of the award and take into account a number of factors in relation to the specific facts and circumstances of each reported case. Factors that may increase the amount of the prize include:
– the importance of provided information;
– the assistance given by the whistleblower;
– the interest of law enforcement authorities; and
– the participation in internal compliance systems.153
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On the other hand, factors that may reduce the amount of a whistleblower’s award are:
– their guilt;
– unjustified delay in reporting a violation;
– violation of internal compliance and reporting systems by the whistleblower.154
The order of the above criteria does not determine their validity. It should be noted that some whistleblowers are excluded from the possibility to receive an award.155 Among others, these are:156
– certain US law enforcement officers;
– employees of foreign governments;
– people convicted in criminal actions related to the information provided to the SEC; and
– certain auditors, including those who would violate Sections 10A of the Exchange Act by reporting information to the commission in order to obtain a whistleblower reward.
Moreover, the Dodd-Frank Act provides a possibility of anonymous transmission of information to the SEC by a counsel.157 However, prior to payment of the award, the whistleblower discloses their identity and other information that SEC may request, either directly or by their counsel.158
It should be noted that the Dodd-Frank Act has strengthened and extended the regulation of whistleblowers’ activities under the Sarbanes-Oxley Act. This includes, for example, the protection of employees of a subsidiary under the SOX rules if its finances are included in the financial statements of the parent company. Moreover, a whistleblower who accuses a company of retaliatory action resulting from a SOX-protected report receives the opportunity to sue directly in a federal court without exhausting ←37 | 38→administrative resources.159 Another change is the extension of the period from ninety to 180 days after the detection of an infringement during which whistleblowers have the right to lodge a claim.
Moreover, the Dodd-Frank Act strengthened the provisions of the False Claims Act, among other things, by amending section 3730(h) by ensuring the protection of whistleblower’s colleagues.160
The protection of people who disclose perceived wrongdoings in the United Kingdom is universally considered to be one of the most developed in Europe.161 The regulations in this respect were included above all in three legal acts:162 the Public Interest Disclosure Act of 1998,163 the Employment Rights Act of 1996,164 and the Enterprise and Regulatory Reform Act of 2013.165 The United Kingdom was the first European state which introduced a regulation strictly related to the protection of whistleblowers,166 that is ←38 | 39→the Public Interest Disclosure Act (PIDA).167 Its objective was to protect public interest by quickly discovering and stopping wrongdoings in private enterprises or public institutions; similarly to American regulations.168 The PIDA fits into the British legislation on employment. Pursuant to its provisions, the Employment Rights Act of 1996 was amended.169 Moreover, it was significantly amended on June 25, 2013, as the result of the Enterprise and Regulatory Reform Act. Among the most important introduced changes at that time was the introduction of “a public interest test,” that is the obligation of an employee to demonstrate their belief that they disclose information in public interest, and the abolition of the criterion of good faith that was previously in force, whose application was limited by the above amendment only to the purposes of determining the amount of compensation for whistleblowers.170
The definition of an employee who is protected under the Public Interest Disclosures Act is broader than the definition in the Act of 1996 and covers people employed in all sectors, except for self-employed, volunteers, and employees of armed forces and intelligence service.171 Below, within the scope of the term “an employee” or “a whistleblower,” this text always includes all protected groups, regardless of the legal basis of their employment.
In the discussed Act, there are terms of protected disclosure