What is a 'Whistleblower'

A whistleblower is anyone who has and reports insider knowledge of illegal activities occurring in an organization. Whistleblowers can be employees, suppliers, contractors, clients or any individual who somehow becomes aware of illegal activities taking place in a business either through witnessing the behavior or being told about it. Whistleblowers are protected from retaliation under various programs created by the Occupational Safety and Health Administration (OSHA) and the Securities and Exchange Commission (SEC).

BREAKING DOWN 'Whistleblower'

Different organizations are interested in different sets of illegal activities reported by whistleblowers. While OSHA is more interested in the environmental and safety breaches, the SEC is interested in securities law violations. Organizations such as these offer awards for some information provided by whistleblowers and often allow for online submissions of information as well as anonymity.

A whistleblower may choose to release information to the company in which the activity is occurring or to a large governing or regulating organization. In cases where the possibility of fraud or other illegal activity spreads to higher levels of management within a business, the choice is often to report to the latter.

Whistleblowers and Protection

Whistleblowers receive an offer of a level of protection from retaliation should the information they provide be confirmed to be true. This includes limiting the accused company from taking negative actions on the employee, such as demoting or terminating their employment, as well as preventing the company from being able to take legal action in an attempt to recoup losses from the whistleblower. In certain circumstances, more involved protections may also be available should there be a physical threat made toward the whistleblower and/or those that associate with him.

Whistleblowers and Rewards

When it comes to relaying information to particular government or regulatory authorities, the whistleblower making the report may receive a reward as compensation for coming forward. Often, this reward is a percentage of the dollar amount recuperated by the government agency as a direct result of the whistleblower's information. Recovery of a minimum amount may be necessary to qualify, and the information provided must be unique or otherwise not previously reported.

Whistleblowing and Waste

Many companies also have a mechanism to inform upper management of wasteful practices. These practices may or may not be illegal in nature. This means that, solely by reporting issues of waste, a person may not officially be considered a whistleblower, limiting his access to protections.

In incidences involving discovery of gross waste (waste involving a significant dollar amount of value), especially within government agencies, the reporting of waste can qualify the person as a whistleblower.