Whistleblower Protection Blog : Whistleblower Lawyer & Attorney : National Whistleblower Legal Defense and Education Fund : Whistleblower Protection, Fraud Claims : Washington DC

Retaliation is a company felony because it works like a cancer on the culture of the organization. It is the opposite of transparency and accountability. It not only punishes those trying to do the right thing, but broadcasts a clear message to others around them that “this is what happens to those who get out of line.” Employees are nothing if not observant to every nuance of their supervisor’s words and action. Every act of direct or indirect retaliation reverberates in the halls and around the water cooler 100 times more loudly than any CEO letter touting integrity. When a company leader retaliates, whatever advances have been made in the “balloons and barbeques” stage of the program in that part of the organization vanish like the wind, and are replaced by fear and blame.

Retaliation is a cancer that also acts like a communicable disease. A leader who sets the tone of fear and retaliation can often count on others within the team to help reinforce the group dynamic against the disfavored team member. [1]   The disease can also move from team to team and spread throughout other areas of the organization, crushing out competing efforts to encourage transparency, accountability and ethical culture. Role modeling can be a powerful force for either good or evil.

At a recent RAND Symposium on ethical culture, David Gebler, author of “The Three Power Values” made some insightful observations about organizational culture, including leadership actions that must be mobilized to stop the slippery slope of bad culture before it becomes the norm. On the flip side, retaliation is a leadership action that actually hastens the slippery slope and enables misconduct, because it fosters fear, silence and acquiescence. That’s the lesson of Enron & WorldCom 101.

One question I ask when evaluating company programs is “How many times have you fired someone for retaliation?” You’d be surprised how many companies have never found an act of retaliation within their ranks, or alternatively, actually fired a manager for the offense. Workplace retaliation isn’t always spelled out in black and white as an outright dismissal or demotion. That would be easy. Often, it manifests more indirectly, such as exclusion from important meetings or discussions, change of workload, lack of cooperation, social ostracism and malicious gossip. These are harder to pinpoint and requires a committed management that condemns it and the vigilance of trained HR, legal and compliance personnel – factors missing in many organizations.

Another useful question is “What is your implementation plan for monitoring and enforcing the nonretaliation policy?” Organizations that are serious about compliance and ethics not only make retaliation a major offense, but actually have protocols and mechanics in place to ensure team leaders understand and comply. Do managers believe they will be disciplined for retaliation against a team member? Do investigators routinely warn supervisors during investigations that the team may be audited for retaliation? How carefully does the company enforce a “need to know” list? Is there a retaliation monitoring program? [2]  Again, the answer to these questions is often …. crickets.

All this suggests that boards and senior management who are quick to proclaim the ethical culture of the company as their priority should pay much closer attention to seeking out and punishing retaliation as the number one force undermining that lofty goal. Retaliation is a company felony and should be treated accordingly, with swift and consistent public punishment for the perpetrators, no matter how senior. That’s also reason #487 why the chief compliance officer and her team must have the independence, positioning and empowerment to address retaliation wherever and however it manifests, and to otherwise implement and oversee the critical elements of an effective compliance program. [3]

A true ethical culture reflects the better instincts of company leadership, and retaliation does the opposite. One way or another, retaliation must be met with purpose and vigor, and eradicated.

[1] See my related column on an ATF official’s warning to agency employees to “respect the chain of command.” 

[2] Vicki Sweeney, partner-in-charge of KPMG’s ethics and compliance group, has developed a leading edge retaliation monitoring program. 

[3] See RAND Symposium on “Perspectives of Chief Ethics and Compliance Officers on the Detection and Prevention of Corporate Misdeeds” (2009) and “From Enron to Madoff: Why Most Corporate Compliance and Ethics Programs are Positioned for Failure” (2009)
 

Of those reporting retaliation, most experienced exclusion from decisions and work activity (62%), a cold shoulder (60%), and verbal abuse by a supervisor or manager (55%). The survey reports that 48% say they almost lost their job, 43% say they lost promotions or raises, 18% were demoted, and 4% experienced physical harm to person or property. The survey included only respondents who are currently employed -- a methodology that might cause underreporting of discharges as a form of retaliation.

The ERC study associated retaliation with the ethical culture of the employer.  Retaliation is much more common in organizations that have a weak ethical culture. If management tolerates retaliation, employee trust levels drop markedly. Employee engagement and commitment to the organization drops from 78% to 38% when employees experience retaliation for reporting misconduct. Among all employees who reported misconduct (including those who experienced retaliation and those who did not), engagement is 66%.

The ERC makes the following recommendations:

• Examine and, as needed, revise systems of procedural justice to make sure that reports are handled appropriately and that reporters feel heard, respected and protected.
• If your company has not done so already, develop a non-retaliation policy. Make sure that it is communicated broadly, included in your code and addressed in all-employee and management-level training and enforced when situations arise.
• Sanitize cases that have been reported and use them as case studies so reporters know that their decision to report made a difference.
• Be mindful of groups that are more likely to feel retaliated against. Take extra steps to make sure that these employees are safeguarded from punishment for reporting and, just as importantly, that they do not feel vulnerable to retaliation.
• Train everyone who is likely to receive reports—especially supervisors—to follow-up with reporters in an appropriate manner and to be mindful of how unrelated actions might be misinterpreted by an employee who is feeling uncertain and exposed after deciding to report.
• Encourage managers at all levels to communicate that retaliation is unacceptable and to back it up with action.

SAI Global sponsored the survey. Ann Wootton, President and General Manager of SAI Global Compliance Americas, told the Examiner, “This report demonstrates just how toxic the fear of retaliation can be in an organization.” She adds, “Companies that make zero tolerance their goal are doing their employees and themselves a big favor. Retaliation brings a lot of baggage with it that can truly damage an enterprise.”

Patricia J. Harned, president of the Ethics Resource Center. told the Examiner, “ERC’s research shows workplace retaliation for what it is – a destructive attitude-killer. The best antidote is a company-wide ethical culture where employees feel that reporting is not only tolerated but welcome. And surveys are the best way to assess what’s on employees’ minds.”

Management later fired Ms. Obradovic, claiming that she missed work due to private matters. Management also claimed that she was dishonest when she requested to have that time off. However, it is clear Sandra Obradovic was retaliated against for blowing the whistle on practices in her office, not for one day’s missed work.

Ms. Obradovic’s right to free speech has been violated, and MANS writes that this treatment is becoming the norm, instead of the exception in Montenegro. Now is the time for the government of Montenegro to take a stand for whistleblower rights, by protecting Ms. Obradovic and others like her who choose to come forward with the truth.

*Philip Barrett (NWC Intern) contributed to this post

 The Washington Examiner has reported that the Justice Department has a 2003 email showing that First Choice's founder, Edward Dovner, knew that the vests would fail after exposure to heat and humidity.  The Justice Department is suing Dovner and his wife, Karen Herman, for transferring assets to evade the government's collection efforts.