Whistleblowing is an act of bravery. It involves stepping forward to report misconduct, illegal activities, or dangers to public health and safety. However, whistleblowers often wonder whether their employer will fire them, harass them or punish them in other ways. This retaliation could impact their life and their career.
Changing laws could improve the situation for whistleblowers. To further protect workers and clarify whistleblower awards and protections, United States Senators introduced the SEC Whistleblower Reform Act of 2023 on March 15 of last year. How could this act improve the process of reporting securities law violations to the Securities and Exchange Commission (SEC) if it becomes law?
How would this act change the legal landscape?
The law already protects people reporting misconduct to the SEC. It also provides them with rewards for their actions. However, this new act would add several important updates.
The act specifies that reporting securities law violations within internal channels qualifies as whistleblowing. For example, reporting a potential violation to a supervisor would qualify a person for legal protection. If passed into law, the act would encourage employees to bring issues to their supervisor directly so that the company can correct issues. Broadening the definition of whistleblowing also extends retaliation protections to those who report a potential violation to their supervisor.
The act also limits the ability of companies to use non-disclosure agreements (NDA) to silence whistleblowers. Whistleblowers who signed an NDA may fear legal action for whistleblowing. Under this act, an NDA prohibiting employees from reporting illegal activity could not be enforced in court. Whistleblowers also do not relinquish their right to report if they sign an arbitration agreement.
Finally, the SEC Whistleblower Reform Act of 2023 would improve processing time. This would decrease the time it takes to address whistleblower claims and pay whistleblower rewards. Under this act, the SEC would have to award claims within one year of the submission deadline or the completed legal case. Especially as the SEC has received a record-setting number of whistleblower tips in 2022 and 2023, this timely processing could make whistleblowers more effective.
How could the SEC Whistleblower Reform Act of 2023 improve the law?
Whistleblowers are not just protecting themselves. They also protect their colleagues, their industry, and, ultimately, the public interest. The actions of whistleblowers can hold businesses and individuals accountable for their legal violations and protect consumers.
Improving legal protections and rewards could better support whistleblowers. It might also encourage people to report wrongdoing. Future whistleblowers may feel more secure when reporting misconduct. They would also more reliably receive the rewards they earned for those reports.
What if I have securities fraud issues to report?
Navigating changing laws and knowing your rights as an employee can be difficult. If you find yourself in a position where you need to blow the whistle, know that the law is on your side. Exploring your legal options can help you make informed decisions. You can hold others responsible for illegal acts and protect your rights with the proper guidance.