EU Whistleblower Directive, Poison Pill No. 2: Liability shield loophole

One of the draft Directive’s most significant features is the shield on civil and criminal liability when the whistleblower makes a protected report. The Council’s proposal (Article 15, at 50) qualifies that there only is immunity if the whistleblower “had reasonable grounds to believe that the reporting or disclosure was necessary for revealing a breach pursuant to this Directive.”

This unprecedented new requirement would mean it is not safe to have engaged in “protected” speech. The whistleblower also must properly guess whether his or her disclosure was indispensable, and then again whether a court would agree. Otherwise, the whistleblower will be defenseless against criminal or civil prosecution.

It would be unprecedented in global whistleblower law to impose a second test for protection against retaliation – the importance of the whistleblower. To date protected speech always and only has depended on the credibility and significance of the whistleblower’s disclosure.

1. The new test is irrelevant for the Directive’s purposes. The purpose of whistleblower policies is to create safe channels for the free flow of credible information to responsibly exercise authority. It is not relevant for that goal whether any individual report is necessary to make a difference. Indeed, it would create a constant, subjective loophole to condition protection on guessing right about significance, rather than merit. That is why the Council proposal maintains protection for reports of illegality too trivial to require investigation. That principle should apply to litigation, not merely workplace actions.

2. The new test is unreasonable. Actually it is hopelessly unfair. How are whistleblowers supposed to know in advance whether they are indispensable? The police are not going to tell whistleblowers how many other witnesses have provided which evidence.

3. The weakened liability shield could lead to worse substitute retaliation. Protections against retaliatory liability must keep pace with protection against workplace reprisals, or one will replace the other. In the U.S., whistleblower remedies only cover workplace harassment. As a result, since new laws made employment retaliation more difficult, the harassment of choice has shifted to retaliatory criminal actions and civil lawsuits. Those forms of retaliation have far more severe consequences than workplace actions.

4. The new test will have a severe chilling effect on disclosures. Whistleblowers cannot know how important their disclosures are until enforcement proceedings are over. In the meantime, whether they have rights will depend on guessing the same as some future decision-maker about being indispensable. Many understandably will choose not to gamble. If the risk of getting fired is frightening, the risk of going bankrupt or to jail is terrifying.

Solution: The Council’s proposal bans workplace reprisals, but enables retaliatory litigation with a wild card immunity test. As a result, it could end up substituting a worse form of retaliation compared to today, with a worse chilling effect. The offensive text should be substituted so that there is immunity “for making a report protected by this Directive.” The Directive should conform to all other global whistleblower laws by conditioning protection only on the report’s merits, not its predicted significance.