- Research Handbooks in Financial Law series
Edited by Barry Rider
Chapter 49: Rewards for whistleblowing
Whistleblowing involves a conflict between an employee’s duties of loyalty to her employer and her duty to uphold the law – to participate in enforcement of the law by disclosing wrongdoing. When the disclosure involves issues of national security, as in the case of Edward Snowden, governments, claiming to be guardians of the public interest, see employee duties of confidentiality (or non-disclosure) as consistent with the public interest. Wikileaks and Edward Snowden’s disclosures have raised general questions about what citizens have a right to know about how their governments behave. Governments may discourage or fail to encourage whistleblowing even where it might help to improve the quality of public services. In these non-national security contexts governments which fail to encourage whistleblowing are more vulnerable to criticism. When governments have made commitments to open government and transparency (whether by proclamation, as in the case of the US, or by treaty, as in the case of the EU), these failures to encourage disclosures of wrongdoing and problems are especially significant. Whistleblowing in the private sector does not involve the same type of conflict between different public interests. Arguably duties to private sector employers should cede to the obligation to comply with the law – especially where breaches of the law carry criminal sanctions. An employee who discloses insider trading, market manipulation, or sanctions-busting should not be criticized for breaching duties to an employer who, at the very least, did not work hard enough to prevent such activities.
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