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How Compliance Officers Can Become Whistleblowers

May 7, 2021

As we recently shared, WLC member Suzanne Durrell spoke at the 25th Annual Health Care Compliance Association (HCCA) Compliance Institute. Her panel was titled “Whistleblowers: Who are They and Why do they Become Whistleblowers and How Do You Evaluate a Whistleblower Case?”  We’ve already shared some of the panel’s thoughts on best practices for successful compliance culture.  Today we wanted to share some of the panel’s thoughts on how compliance officers can become whistleblowers.

How Compliance Officers Can Become FCA or SEC Whistleblowers

The panel explored how and when compliance officers can bring an SEC or FCA whistleblower complaint. This may happen, for example, where the compliance professional is frustrated that the company is not listening to them and taking their position or their concerns seriously. It may also happen where the compliance professional fears for their own liability unless the company changes its behavior.  Likewise, it may happen when an employer retaliates against the professional.

There have been instances where a compliance professional has been a successful FCA or SEC whistleblower.  A former compliance executive was the whistleblower in an FCA case against pharmaceutical company Incyte Corporation, and a compliance professional was the whistleblower in an FCA case against Halifax Hospital.  The  SEC has made whistleblower awards in at least three cases where the whistleblower was a compliance professional.

But the panel cautioned that the compliance professional and the whistleblower lawyer should consider whether the whistleblower complaint relies on information protected by the attorney-client or some other privilege.  In evaluating that issue, one relevant factor may be whether the compliance professional is a lawyer or reports through the legal department. The Department of Health and Human Services Office of Inspector General recent pronouncements on compliance programs and Corporate Integrity Agreements stress that the compliance professional should not report through legal. Instead, reporting should be to the Audit Committee, the Board, or other officer. This makes it more likely the report gets into the right hands, but may also help minimizes potential privilege concerns.

Successful Compliance Whistleblower Actions Start with The Right Lawyers

The vast majority of our clients have raised concerns and tried to rectify problems internally with the company before coming to us for advice.  Some of these companies lacked a robust compliance program (this can happen especially with startups and small companies). In other companies the compliance program had been marginalized, rendered ineffective within the organization, or outright overruled. And sometimes the company was under a Corporate Integrity Agreement with HHS-OIG but the employee was ignored or worse, the employee was fired or otherwise retaliated against.

If you are in this situation,  it is important to consult a firm who can evaluate not only the merits of the potential fraud claim, but also the potential privilege problems that could expose you to ethical challenges and derail an otherwise promising case. Our firm is dedicated to recovering monies for the government and the whistleblower, but also to protecting employees from retaliation  and preventing fraud from happening.