The devastating wildfires in Maui have called attention to a crucial gap in current whistleblower law.

The fires have claimed at least 115 lives, becoming the deadliest U.S. wildfire in more than a century. While the analysis is ongoing, investigators are evaluating the role of downed power lines and decisions by the state’s main power company, Hawaiian Electric.

A recent opinion piece in The Wall Street Journal said that after Maui — as well as California’s 2018 Camp Fire, the deadliest and most destructive wildfire in state history — the nation must examine whistleblower protections for electric grid workers. Such protections would guard whistleblowers from retaliation by their employers.

“Is it possible that there are employees of Hawaiian Electric — which serves 95 percent of the state’s electric customers — who may have recently identified risks but didn’t speak out of fear of losing their jobs?” wrote Tommy Waller, CEO of the nonprofit, nonpartisan Center for Security Policy.

Federal laws protect whistleblowers in industries such as nuclear, transportation, finance, and pipelines, as well as in food safety, tax fraud, and occupational health, “yet there are no parallel federal protections for employees who work on the infrastructure on which all modern life depends: the electric grid,” Waller wrote.

That means electric company employees who point out security or regulatory concerns can be fired.

And, in the case of the California fire, a veteran PG&E employee claimed he was fired after alerting the company about wildfire risks of certain equipment more than a year before the Camp Fire.

PG&E eventually pleaded guilty to 84 counts of involuntary manslaughter in connection with the fire, as well as one count of unlawfully starting a fire.

The COVID pandemic disrupted a March 2020 effort in the U.S. Senate to protect electric-grid whistleblowers; Waller called for renewed action in this area.

“The absence of such safeguards puts our nation at risk of additional wildfires and other dangerous consequences associated with electrified infrastructure, such as blackouts,” he wrote.

Indeed, the significance of an update to federal law here promises to be increasingly relevant. Steven Hawks, CAL FIRE chief, said in an analysis of the Camp Fire that “there’s no reason to believe that fire activity and severity is going to lessen anytime soon.” He added that fires are burning quickly, creating a greater risk of people getting trapped.

It’s particularly troublesome, Waller noted, to consider that perhaps these tragedies could have been prevented had employees been empowered to speak out.

Whistleblowers provide an invaluable — even lifesaving — service to our nation, and we believe they deserve the best advocates. Keller Grover provides confidential, free consultations to advise those who have observed suspected wrongdoing. We can guide them in determining the best path forward from the very beginning, helping minimize the impact of reporting, protect their rights, and achieve the best possible outcome for the situation. If you need advice, contact us today.

A recent survey found that employees who witness misconduct are increasingly willing to report it — an admirable posture when it comes to acting ethically and protecting the best interests of the public.

Whistleblowers, however, often have many additional questions that go beyond starting the process. To help address these concerns, here are answers to some frequently asked questions:  

Can I remain anonymous?

Maybe, but it’s often difficult. Different whistleblower laws apply in different situations; certain of them — such as the program created by the Dodd-Frank Act — make it more possible to guard your identity. But anonymity is not guaranteed, and it may be unlikely in many cases. Details in a complaint may make a whistleblower’s identity obvious, even if he or she isn’t named. Sometimes, the filing of public documents after an investigation concludes will state the whistleblower’s identity. 

Consulting an attorney before taking whistleblower action offers the best chance of guarding your identity; various strategies include creating a corporate entity to file the complaint or requesting that a case be sealed. The Anti-Fraud Coalition provides excellent resources for individuals considering becoming whistleblowers. Keller Grover is a proud supporter of TAF and Kate Scanlan and Jeff Keller are both active members.

Will becoming a whistleblower cost me my job/career?

This is a complex question. Whistleblowers often continue working for a company, but they sometimes face negative consequences if their identities become known. Those consequences may vary, such as termination, denied promotions, a forced transfer, pay cuts, ostracism or intimidation, poor performance reviews, or other actions. 

However, retaliation is against the law. The California Labor Code, which would govern California employees, states that employers who retaliate against a whistleblower must reinstate the employee’s employment and work benefits, pay lost wages, and take any other necessary steps to comply with the law. Administrative proceedings or legal action may help whistleblowers achieve remedies. Federal laws that apply to employees in all states also protect against retaliation. An experienced whistleblower attorney, like those at Keller Grover, can help a potential whistleblower evaluate which laws may apply to protect them.

Can I be sued for blowing the whistle on a fraud on the government?

This is possible but uncommon. And it can be viewed as retaliation, which would result in more legal trouble for an employer. As TAF notes, courts often reject counterclaims against whistleblowers, reasoning that whistleblower laws reflect a broad public policy that favors private citizens reporting suspected fraud against the government.

However, if there are lawsuits related to sharing a company’s confidential information with outsiders, they typically fall under the categories of breach of contract or breach of fiduciary duty, TAF says. That’s because employment or separation agreements may include a confidentiality clause. However, companies that sue a whistleblower often have a hard time proving that the lawsuit isn’t some form of retaliation.

Certain whistleblower laws have stronger protections against counterclaims; getting legal advice before taking whistleblower action can be incredibly helpful. In addition, would-be whistleblowers can protect themselves by taking only documents they have permission to access, not taking privileged documents (such as communication with lawyers), and taking only documents that are reasonably necessary to support the whistleblowing claim.

What if I have an employment claim or signed a severance agreement?

These types of agreements may include phrases such as relinquishing “any and all” claims against an employer, but there can be many variables that affect how these would be interpreted under the law. Under some whistleblower laws, employers can’t use these agreements to undermine efforts to expose a fraud. In other cases, it matters whether an agreement was signed before or after a whistleblower steps forward to provide information. Again, an experienced whistleblower attorney can help navigate the nuances. Read more here.

What if my report would include protected information, such as health information covered by HIPAA?

It’s always best to exercise caution when handling information you know is subject to privacy or confidentiality requirements. We touch on some of these considerations in the second question. However, there can be exceptions. Regarding HIPAA privacy rules, a whistleblower is allowed to share protected health information with a health oversight agency, public health authority, or retained attorney (read more from TAF). Any prospective whistleblower who plans to provide such HIPAA protected information to the government as evidence of a fraud just needs to be diligent to secure the information so that the information does not fall into the wrong hands. Another way to share information is by first redacting information that would allow a patient to be identified. An experienced whistleblower attorney would be able to guide a whistleblower through any privacy rules.

Could I get a reward?

Yes. Many of the best-known whistleblower laws, such as the False Claims Act and Dodd-Frank, include incentives for voluntary whistleblowers who provide original, timely and credible information. These awards are set by statute and can be as much as 30 percent of recoveries. For example, under the Dodd-Frank Act, in August alone, the Securities and Exchange Commission announced more than $120 million in awards to eight whistleblowers. However, situations vary; consult an experienced whistleblower lawyer to find out the specifics and potential for yours.

Keller Grover provides confidential, free consultations to advise potential whistleblowers. We can guide them in determining the best path forward from the very beginning, helping minimize the impact of reporting, protect their rights, and achieve the best possible outcome for the situation. If you need advice, contact us today.

Cybercrime has surged, particularly since the pandemic, targeting the sensitive information of consumers, businesses and governments. The FBI’s 2022 cybercrime report tallied nearly 801,000 complaints, adding up to nearly $10.3 billion in losses. While the number of complaints has held fairly steady since 2020, the breaches have gotten much more lucrative for bad actors: reported losses were $4.2 billion in 2020 and $6.9 billion in 2021. 

These figures show why companies that aren’t enacting strict cybersecurity measures are at risk of costly attacks. The federal government has enacted a two-pronged strategy to push more companies to take these threats seriously, and face liability and fines for failing to do so.

Recognizing that these breaches are material to investors’ evaluations of whether to buy or sell a company stock, the Securities and Exchange Commission adopted new disclosure rules about cybersecurity breaches. If there’s a “material” breach, a publicly traded company must file the appropriate form within four business days. Alongside that requirement are various other rules about regularly disclosing risk management strategies and other cybersecurity measures. 

“Whether a company loses a factory in a fire — or millions of files in a cybersecurity incident — it may be material to investors,” SEC Chairman Gary Gensler said in the announcement. “Currently, many public companies provide cybersecurity disclosure to investors. I think companies and investors alike, however, would benefit if this disclosure were made in a more consistent, comparable, and decision-useful way. Through helping to ensure that companies disclose material cybersecurity information, today’s rules will benefit investors, companies, and the markets connecting them.”

There is one exception to public reporting: If the U.S. Attorney General considers immediate disclosure to pose a substantial risk to national security or public safety and informs the SEC in writing.

Failure to make a disclosure under these new rules will be a violation of the securities laws. The SEC Whistleblower Office is authorized by Congress to provide monetary awards to eligible whistleblowers who come forward with information about violations of the securities laws that lead to an enforcement action in which over $1 million in sanctions is ordered. The range for awards is between 10% and 30% of the money collected.

In addition to the SEC rules, the federal government has cybersecurity requirements for all its contractors and grantees; the Department of Justice started the Civil Cyber-Fraud Initiative in October 2021 to enforce those requirements under the False Claims Act. Whistleblowers can file qui tam lawsuits if they have information that government contractors or grantees aren’t meeting those requirements, and if successful, receive a percentage of the recovered funds.

Today, government vendors and publicly traded companies (and indeed, some companies fall into both categories) must demonstrate heightened compliance with cybersecurity requirements. Potential violations can include:

• Companies contracting with the federal government that knowingly lack adequate cybersecurity measures.
• Publicly traded companies that don’t notify the SEC/investors of a material cybersecurity breach within four business days (apart from recognized exceptions).
• Government contractors and grant recipients that don’t make timely reports of a cybersecurity breach.

While the incidence of these breaches may be on the rise, whistleblowers are going to play a critical role in reporting to the government when companies fail to comply with these tighter requirements. For those who want to report such wrongdoing, it’s critical to engage a whistleblower attorney early in the process. With more than 30 years of combined experience litigating fraud and employment cases — and billions in recoveries for its clients — Keller Grover is uniquely positioned to represent whistleblowers. 

If you want to report cybersecurity fraud in your organization, we are here to help. For advice about how to handle suspected fraud, contact Keller Grover for a free and confidential consultation.