You are not required to be an employee to earn a reward. The reason why so many whistleblowers are insiders is more practical: these individuals are most likely to have non-public information indicating the company is violating the law. However, numerous individuals that are not employees can meet the standard created by the various whistleblower laws.
Customers, Consultants, Competitors and Ex-Employees can all be whistleblowers.
Some examples of non-employees earning a reward:
- Doctors have turned in pharmaceutical companies.
- Pharmacists have turned in competitors.
- Consultants and professionals (like accountants) have reported clients.
- Investors have turned in individuals soliciting investments.
Tips from former employees are also welcomed. Individuals have blown the whistle successfully on their employer after they have secured new employment. Others have been terminated by the company after internal reporting and take their information to the government as part of their retaliation lawsuit.
Non-employees generally have specialized expertise or non-public information that gives them unique insight into the company’s misconduct.
Tips based solely on public information or speculation are unlikely to lead to a reward. When individuals are not employees, they generally have specialized expertise in the area that allows them to recognize a violation of the law, or non-public information from interaction with the company as a consultant, customer or other relationship.
For example, there was a qui tam lawsuit filed by a former manufacturer of guardrails under the False Claims Act which had a $100+ million verdict at trial. Millions have driven by the guardrails on public highways that are the subject of the lawsuit. Only the relator, a former manufacturer of guardrails with knowledge of the regulatory process and the company’s patent, detected a difference between the approved design plans and the finished product sitting in the highway median.
There are some potential pitfalls when not operating from the inside. It can be difficult to speak to the knowledge of the company and the intent behind certain actions. There may be pieces of the puzzle that the informant does not have and can not obtain. The more speculation involved, the less likely there is the basis for a successful whistleblower action.