Whistle-Blowing
Ronald F. White, Ph.D.
Professor of Philosophy
College of Mount St. Joseph
What is Whistle-Blowing?
• “The term whistle-blower was initially used to describe
government employees who went public with complaints of
corruption or mismanagement but it is now applied to
employees in the private sector as well. Whistle-blowing is
ethically problematic because it involves a conflict between
an employee’s obligation to his or her company and a
general obligation to the public. Employees are required
not only to do the work they are assigned but also to be
loyal to their employer, preserve the confidentiality of
company information, and work in the best interest of the
company. Deciding when whistle-blowing is morally
justified and when it is not requires a balancing of many
different obligations.”
From: John Boatright , The Ethical Conduct of Business
Why is it morally problematic?
• Conflict of interest
– Loyalty to employer
• Moral
• Legal (contractual)
– Utility
– Beneficence
– Nonmaleficence
• Harm to others
• Harm to self
– Liberty
– Justice
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Abuse of whistle-blowing by Whistle-Blowers
Retaliation by Stakeholders
Utility
Role of Government
Misinformation by Whistle-Blowers
Conflict of Interest and Obligation
• Conflict of Interest
– Employees interests
– Employer interests
– Social interests
• Conflict of Obligation
– Employee Obligations
• Self and Family
• Employer
• Society
– Employer Obligations
• Stakeholders (stockholders, employees, suppliers etc..)
• Employee
Loyalty
• Loyalty as a moral obligation
– Agency Problem
– Employee to employer
– Employer to employee
– Other Stakeholders
• Loyalty as a legal obligation
– Contractual obligations
Utility
• Whistle-Blowing and Harm
– Degree of harm being reported
– Degree of harm resulting from whistle-blowing
Beneficence
• Advance the most important interests of
others and remove harms
– Whose interests are at stake?
Non-maleficence
• Do no harm
– Harm of act being reported
– Harm of Whistle-blowing
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Stockholders
Employees
Consumers
Suppliers
Financiers
Local Community
Liberty
• Liberty of Employee
– Right to free speech
• Liberty of Employer
– To conduct business as it sees fit
• Liberty of other employees to retaliate.
Justice
• Treat equals equally and unequals unequally.
– Justice in distribution
– Justice in retribution
Criteria for Whistle-Blowing
• A whistle-blower is a member or former member of an
organization and not an outsider.
• The information that is revealed by the whistle-blower is
non-public information and not already-known facts.
• The information concerns some significant misconduct by
the organization or some of its members.
• The information is revealed outside of the normal channels
of corporate communication within an organization.
• The information is revealed voluntarily and not by a legal
mandate.
• The information is revealed as a moral protest in order to
correct some perceived wrong.
Conditions for Whistle-blowing
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Is the situation of sufficient moral importance to justify whistle-blowing?
How serious is the potential harm compared to the possible benefits? To what extent is the harm a
predictable and direct result of the protested activity? How imminent is the harm?
Do you have all the facts and have you properly understood their significance? Whistle-blowers
must support allegations with adequate evidence and not draw conclusions about matters beyond
their expertise.
Have all internal channels and steps short of whistle-blowing been exhausted? Most organizations
require employees to address concerns with an immediate superior or through internal channels of
communication.
What is the best way to blow the whistle?
To whom should the information be revealed? How much information should be revealed? Blowing
the whistle in a responsible manner avoids charges of being merely a disgruntled employee.
What is my responsibility in view of my role within the organization?
An employee’s position in the organization may increase or decrease an obligation to blow the
whistle.
What are the chances for success?
An employee should only blow the whistle when there is a reasonable chance to achieve some
public good.
Components of a Whistle-Blowing
Policy
• An effectively communicated statement of
responsibility.
• A clearly-defined procedure for reporting.
• Trained personnel to receive and investigate
reports.
• A commitment to take appropriate action.
• A guarantee against retaliation.
Stockholder Theory Approach
• Free Market Approach
• Liberty
– Whistle-blower
– Corporation
• Minimal role of government
– Whistle-Blowing is a private matter
– Law punishes corporate wrong-doing
– Law punishes fraud and employment contractual violations
• Whistle-Blowing Policy
– Employer/employee contractual negotiations
• Result: The free market will punish ill-advised whistleblowing and ill-advised retaliation by employers.
Stakeholder Theory Approach
• Corporations are persons and have both moral
and legal obligations.
• Categorical Imperative
– Treat Persons as Ends not Means
– Truth-Telling
• Whistle-Blowing Policy
– A public matter requires government oversight
• Arguments in Favor of Legality
Existing Legal Protections
• The Civil Service Reform Act of 1978 prohibits retaliation against
federal employees who report waste and corruption in government.
The Merit System Protection Board was set up by this act to receive
and act on complaints of retaliation.
• The Whistle-Blower Protection Act of 1989 further strengthened
this protection with the creation of the Office of Special Counsel for
processing whistle-blower reports.
• Anti-retaliation provisions in various pieces of federal legislation
protect whistle-blowers in both the private and public sectors, and
some statutes even encourage whistle-blowing in fraud cases by
awarding a percentage of the funds recovered.
• More than 35 states have laws that protect whistle-blowers
(although most of these apply only to government employees), and
many state courts are limiting the grounds on which employees may
be fired.
Is there a duty to whistle-Blow?
• Is whistle-blowing “above and beyond the call
of duty?
– Risk of retaliation by stakeholders
• Is retaliation by stakeholders morally justified?