It is illegal for an employer to retaliate against whistleblowers or other employees who report various types of illegal activity. An employee who is fired, disciplined, or otherwise treated differently because the employee has complained about illegal activity may have the right to sue the employer under several legal theories:
Most laws that provide workers with basic rights also prohibit employers from retaliating against workers who assert those rights by, for example, complaining internally, filing a complaint with an administrative agency, or filing a lawsuit. These laws include:
Whenever an employee complains, to an employer, outside agency, or court, about a violation of workplace rights, chances are very good that the employee is protected from retaliation.
Employees are also protected from retaliation when they report other types of employer misconduct. There are a number of whistleblower protection laws that prohibit employers from retaliating against employees who report particular kinds of illegal activity. For example, the Sarbanes-Oxley Act protects employees who complain of employer actions that they believe to be shareholder fraud. The Dodd-Frank Act, passed in 2010, provides whistleblower protections for employees who raise concerns about the conduct of financial firms and ratings agencies. Employees who report safety or environmental violations are protected by a number of federal laws. And, employees who report fraud against federal agencies or contracts are protected from retaliation by the False Claims Act.
These are all federal protections; many states have their own whistleblower laws, which protect employees from reporting everything from safety hazards to fraud against consumers.
A number of states allow employees to sue for wrongful termination in violation of public policy if they are fired for reporting illegal activity by their employer (or for refusing to commit illegal actions). In these states, an employee who is fired for reporting criminal conduct or fraud can sue for damages.
If you believe you have been retaliated against for asserting your rights or reporting illegal conduct, talk to an employment lawyer right away. The statute of limitations for these types of claims can be very short, particularly for whistleblower claims. And, there are very specific rules about what kind of report you have to make (and to whom) in order to be protected. An employer can quickly assess the facts of your situation and give you some advice about how to proceed.