Despite recent court decisions favoring corporate whistleblowers, there is some good news for companies: Research shows most whistleblowers choose to report their concerns internally first, according to both a recent study and blogger analysis.
And that means general counsel and their companies would more often have a chance to deal with a complaint—and keep the problem from spreading into a legal action or a public relations nightmare.
The study, “Encouraging Employee Reporting Through Procedural Justice” [PDF], is the latest report on employee hotline reporting by the nonprofit Ethics Resource Center. It found 84 percent of whistleblowers who reported a compliance concern outside their company had reported it internally first.
“Satisfied employees are less likely to take their complaints to outsiders such as the news media or government, sparing the company from the bad publicity, distraction or legal action that might result from external involvement,” the report states.
The report goes on to say, “A procedurally just process … substantially increases the chances that reporting employees will accept the [company’s] outcome.” It defines a just process as one that combines fair decision making with respectful treatment of employee concerns.
The study was cited on a blog post written by attorney Lorene Schaefer, a former division general counsel for General Electric Company. Schaefer is founder and managing partner of Win-Win Resolve, a law firm that focuses on workplace investigations and alternative dispute resolution.
She told CorpCounsel.com Monday that the research suggests it’s time for companies to rethink how they handle employee complaints. “Forward-thinking companies are developing protocols and training curriculums that help translate the precepts of procedural fairness into daily practice,” she explained.
She offered several recommendations in-house counsel can use to increase the likelihood that an employee will go to internal reporting tools first and be more likely to accept a company’s result.
Among Schaefer’s suggestions:
The ethics study also points out that the impact of procedural justice varies with the type of complaint involved. And the impact of a just process is not as strong in cases involving hot-button issues like discrimination, harassment or violence, it says.
“But, as a general rule, companies that work hard to provide procedural justice will greatly improve the odds that employees will accept the results of the handling of their ethics reports,” the report concludes.
Finally, the report states the obvious: “In today’s world of social media, where a disgruntled employee can with a few keystrokes share his or her complaints with the world, prudent employers are working hard to give their employees a clear way to report workplace concerns.”