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 employees 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

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 whistleblowing

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

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 Whistleblowing

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 employees 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 whistleblowers (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 whistleBlow?

Is whistle-blowing above and
beyond the call of duty?
Risk of retaliation by stakeholders

Is retaliation by stakeholders morally

justified?