DOJ’s new whistleblower incentive program: Implications for employers

DEPOSIT PHOTOS

The U.S. Department of Justice (DOJ) has announced the launch of a 90-day “policy sprint” as it works to develop a rewards program for whistleblowers who report corporate and financial misconduct.

The program, announced by Deputy Attorney General Lisa Monaco during the American Bar Association’s 39th National Institute on White Collar Crime, aims to fill gaps in existing federal whistleblower programs and encourage individuals to report misconduct to the DOJ.

Eligibility for a reward under the new pilot program includes:

• Providing original, voluntary information not already known to the DOJ.
• Not being involved in the reported criminal activity.
• The absence of other applicable financial disclosure incentives (i.e., other whistleblower incentive programs).

While the DOJ will welcome information on any violations of federal law, the department is particularly interested in criminal activity within the U.S. financial system, foreign corruption cases outside the SEC’s jurisdiction, and domestic corruption cases.

The program emphasizes the importance of being “first in the door” to be eligible for a reward. for both whistleblowers and companies considering voluntary self-disclosure.

Analysts have expressed concern that the DOJ’s policy, when finalized, will disincentivize people from using their company’s own reporting hotlines. After all, an organization cannot disclose conduct of which it’s not aware.

Therefore, companies should evaluate and fortify their internal reporting mechanisms, training, and messaging to ensure employees and managers are aware of internal reporting options and are encouraged to use them. Organizations should also prepare to handle internal reports promptly and appropriately.

In light of the forthcoming incentive program, employers should:

• Consult with outside counsel regarding key decisions related to investigating allegations and considering self-disclosure.
• Ensure compliance policies, programs, and procedures are up-to-date and effective, including whistleblower protections and investigation procedures.
• Stay informed about the development and implementation of the DOJ’s incentive program and any updates to the department’s voluntary self-disclosure policy.

The DOJ’s new whistleblower reward program is part of an ongoing effort to encourage corporate self-disclosure and individual accountability.

By proactively reviewing and strengthening their compliance programs and internal reporting mechanisms, employers can work to foster a culture of transparency and hopefully preserve their opportunity to address potential misconduct before it is reported to the DOJ.