EMPLOYMENT LAW: Employment Whistle-Blowers now Granted with Monetary Reward

May 24, 2011

The US Securities and Exchange Commission has voted a split 3-2 in favor of giving monetary rewards to corporate whistle-blowers in the most controversial employment requirement of the Dodd-Frank Wall Street law.

The reward amount will have a range between 10% and 30% of any sanction garnering a worth of more than $1-million.

Various protests have arisen among corporate groups regarding the effect of the new SEC measure on internal compliance. “[They are] putting trial lawyer profits ahead of effective compliance”, the US Chamber of Commerce said.

Google and JPMorgan Chase & Co. also expressed the same sentiments on the measure as it will prompt employees to go immediately to the SEC instead of reporting it internally first. The National Whistleblowers Center, however, congratulated SEC for resisting corporate lobbyists in their agenda to stop the measure.

SEC Chairman Mary Schapiro said, in answer to the sentiments of businessmen, that the provision is a balance between whistle-blower protection against retaliation and company interest.

“Today’s rules are intended to the [sic] break the silence of those who see wrong,” she said.