Whistleblower complaints are increasing across both the public and private sectors, driven partly by enhanced enforcement activity and financial incentives for individuals who report wrongdoing. Employers should take note of this trend and ensure their policies and practices are aligned with evolving legal risks.
In the public sector, whistleblower activity has surged under statutes such as the False Claims Act. This increase has been attributed to enhanced enforcement, as well as financial incentives for whistleblowers. For example, the Dodd-Frank Wall Street Reform and Consumer Protection Act authorizes awards of 10–30 percent of monetary sanctions imposed by the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC), provided the enforcement action results in penalties or recoveries of at least $1 million. On January 29, 2026, the United States Department of Justice issued a $1 million dollar payment under its first-ever antitrust whistleblower award to an individual for a report that exposed a bid rigging and fraud scheme involving an online vehicle auction platform.
Not every complaint or report is considered whistleblowing. Whistleblowing generally arises when an employee reports suspected illegal or unethical conduct—either internally to management or externally to government authorities—and subsequently experiences an adverse employment action as a result of that report. Although whistleblowing plays a critical role in detecting fraud, waste, and abuse, many workplace complaints fall outside the scope of protected whistleblower activity. Allegations of harassment or bullying, compensation disputes, personality conflicts, personal grievances, and disagreements with management decisions typically do not qualify as whistleblowing under applicable laws.
Federal employees are protected under the Whistleblower Protection Act and the Whistleblower Protection Enhancement Act when reporting violations of law or regulation, waste of government funds, abuse of authority, or threats to public health or safety. In the private sector, whistleblower protections arise from a patchwork of federal and state laws, including laws enforced by the Occupational Safety and Health Administration (OSHA), laws under the False Claims Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, as well as state whistleblower laws. OSHA alone administers more than 20 federal statutes that prohibit retaliation against private-sector employees who report concerns related to workplace safety, consumer products, transportation, food safety, environmental protection, and financial fraud. Many states also recognize whistleblower protections as exceptions to the employment-at-will doctrine, allowing employees to bring wrongful discharge claims when they are terminated for refusing to engage in illegal conduct or for reporting such conduct in good faith.
Who is considered a whistleblower? A whistleblower is typically an individual who reports suspected wrongdoing learned through their employment or professional role. Whistleblowers may include employees, contractors, interns, and, in some cases, job applicants. Being in a supervisory or management position is not required. However, to receive legal protection in most jurisdictions, the report must be based on a reasonable belief of illegal or improper conduct, made in good faith, involve more than a mere opinion or disagreement, and be reported through appropriate channels, as required by law or employer policy.
On the state level, whistleblower claims frequently center around whether the reported conduct implicates a recognized public policy, which varies significantly by state. Some jurisdictions narrowly define public policy to health or safety matters, while others apply broader standards. In addition, the method of reporting may also affect whether protection applies. For example, in some states, reporting an employer’s illegal conduct related to its business may be covered under the public policy exception if reported internally to the employer or externally to anyone else. In other states, similar protection may apply only when the report is made to outside authorities. Because state laws differ widely, employers should evaluate whistleblower complaints on a jurisdiction-specific basis.
What are the retaliation risks for employers? Employers are prohibited from retaliating against individuals who make whistleblower complaints in good faith. Retaliation may result in wrongful discharge claims under state law and liability under federal statutes, including exposure to damages, attorney’s fees, and litigation costs. Importantly, a whistleblower complaint does not immunize an employee from legitimate disciplinary or personnel actions that were underway before the complaint or that are based on valid business reasons. However, such actions should proceed only after careful legal and factual review, as from an employer’s perspective, employees need only a reasonable, good-faith belief of wrongdoing, retaliation claims are often easier to establish than the underlying violation, and the potential damages can be substantial.
What should employers be doing now? Whistleblower complaints present significant and growing risk for employers. Increased enforcement activity, expanded whistleblower incentives, and broad retaliation protections mean that even routine workplace issues can escalate into costly legal disputes if not handled carefully. As a result, employers should take proactive steps to reduce risk; those steps include implementing and/or reviewing whistleblower policies to clearly define reporting procedures, as well as training managers and supervisors on non-retaliation obligations, proper escalation of the complaint, and establishing investigation protocols for handling complaints promptly and consistently.
Since whistleblower matters are fact-intensive and sensitive, proper policies, training, and response procedures are essential to minimizing exposure.
This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.