Alert: European Union Adopts Sweeping New Whistleblower Protections
On October 7, 2019, the European Union (EU) adopted a directive to enhance and expand legal protections for whistleblowers reporting breaches of EU law. Although the United States was at the forefront of developing whistleblower protection laws, the new EU law is broader and provides more whistleblower protections than any current U.S. law.
WHAT YOU NEED TO KNOW
The directive sets forth common minimum standards for the protection of persons reporting breaches of EU law. The key aspects of the new law include:
- Expanded Scope: the new law provides whistleblower protection for employees, trainees, volunteers, shareholders, and self-employed workers. It broadly protects reporting any violation of EU law, including tax fraud, money laundering, data protection violations etc. The expanded law also only requires that the whistleblowers believe the misconduct they reported to be true. In contrast, under U.S. law, the whistleblower has to believe they are actually disclosing a violation of law.
- Required Internal Whistleblowing Channels: employers must have a clearly stated policy about whistleblower procedure and clear reporting processes to protect the confidentiality of the employee. The new law also requires that employers provide a timely response to whistleblower reports – generally, the employer must follow-up on the report within 3 months, with the possibility to extend to 6 months in certain cases. Furthermore, companies with more than 50 employees are required to set up internal whistleblowing channels, separate from external regulators. Employers must designate a person to receive whistleblower complaints within the company, such as a legal counsel, compliance officer, head of human resources or other executive.
- Broad Retaliation Provisions: the EU law not only covers workplace retaliation (termination, demotion, or other adverse action), but also protects against other forms of retaliation such as threats of criminal or civil suits against the employee. The law prohibits all forms of retaliation against whistleblowers, as well as their supporters, such as other colleagues and family members. The law also provides protection against retaliation to shareholders, labor unions, non-government organizations, suppliers, future employers and others who support the employee.
- Lower Burden of Proof: unlike U.S. law where the employee has to prove a causal connection between their protected speech and the employer’s retaliation, under the new EU law, the employee only has to show that they engaged in protected speech when the retaliation occurred. The burden is on the employer to prove there is no connection between the two.
- Resources and Support: the new law provides whistleblowers with access to legal, financial, and psychological support. For example, the law provides legal aid to whistleblowers who cannot afford to hire a lawyer. In further contrast to current U.S. law, the EU also guarantees whistleblowers in federal civil services access to courts to pursue claims, rather than being forced to bring their claims in administrative hearings.
WHAT YOU NEED TO DO
Now that the EU has formally approved the directive, its member countries will have two years to incorporate the approved rules into their own national laws. Employers should monitor this issue and consider taking affirmative steps to comply with the requirements of the directive. Although the EU law offers much stronger protection for whistleblowers than current United States law, both the United States House and Senate have proposed legislation in recent months to enhance whistleblower protections. It may not be long before the broader and stronger provisions provided in the EU law make their way to the United States. As always, it is recommended that employers engage in best practices for monitoring, training, and reporting violations of existing laws.