Employees who decide that they are going to report misconduct by their employer to the government face a difficult decision early on: Should they take the evidence demonstrating that the company violated the law? Without documentation of the wrongdoing, it is usually difficult to convince the government that misconduct happened. A “smoking gun” strengthens the case for government action.
On the other hand, unauthorized removal of documents from an employer can lead to termination, civil liability or even criminal prosecution. Although there have been judicial decisions upholding the decision of a whistleblower to take documents, courts have reached the opposite conclusion enough to create a potential risk of negative consequences. It is impossible to say for certain what will happen in any particular case as this area has recently been described as a legal minefield.
Two Examples for Illustration of the Law
The employee discovers the document inadvertently as it was left on the copier. There is no confidential material in the document, such as trade secrets, attorney advice or client information. The employee has not signed a confidentiality agreement and does not owe any other duty of confidentiality to the employer. After it is taken, the document is shown only to the government for purposes of reporting the misconduct.
After learning of misconduct, the employee engages in a surreptitious search for documents and electronic evidence that they weren’t authorized to access. A large quantity of documents were taken, some unrelated to the issue the employee wants to report. The material contains confidential information, patient data or trade secrets. In taking, disclosing or failing to return the documents, the employee has violated an employment agreement or confidentiality agreement.
The first scenario is the one less likely to result in negative legal consequences for the employee. Judicial decisions suggest that, in at least some instances, public policy permits an employee to take documents and hand them over to the government in order to report a crime. In this hypothetical, the individual did not go rooting around for evidence that they were not permitted to access. They took only the document that was necessary to report the crime and limited disclosure to the government. Disclosure did not reveal any protected material or violate an employment agreement.
The second scenario raises a host of issues that have resulted in trouble for employees in past cases. In this hypothetical, the employee accessed material they were not authorized to view. The “theft” was not limited to evidence of the misconduct; it included a broad range of documents. Some of the documents also contained corporate secrets which the employee was under an obligation not to disclose. It is in this scenario where the employee is more likely to run into trouble under the law.
Even if the employee is ultimately victorious in the legal system, that does not mean taking the documents will have no consequences. Many employers have terminated individuals caught taking documents and litigated the merits of this decision in the court system.
Summary: Proceed Cautiously
1. Do not access material you are not authorized to access without consulting an attorney.
2. Do not take documents that contain trade secrets or highly sensitive confidential material. This includes evidence protected by attorney-client privilege or containing HIPAA information.
3. Do not take documents unrelated to the misconduct.
4. Do not disclose documents to anyone other than the government and make sure any disclosures are narrowly tailored to evidence of the misconduct.
5. Seek the assistance of an attorney to advise you on your specific situation.
What is the potential exposure of a whistleblower who takes documents?
An individual who takes documents inappropriately could create a legitimate reason for termination by their employer. The result could be the employer has a valid defense to a retaliation lawsuit brought as a whistleblower.
If taking the documents or disclosing them violates an employment agreement, it could open the employee up to a potential civil lawsuit for breach of contract. In cases where there is no employment agreement governing conduct, but the employee owes a fiduciary duty to their employer, there can also be civil liability.
Criminal prosecution is also a possibility in certain circumstances. Obviously, the government does not want to be prosecuting individuals who bring forth legitimate evidence of corporate misconduct. Still, a whistleblower who takes documents with trade secrets or exceeds their authority to access computer networks exposes themselves to criminal liability. Individuals might be prosecuted criminally for theft, theft of trade secrets, or even unauthorized access to computer systems under the Computer Fraud and Abuse Act (“CFAA”). Ideally, a criminal lawyer would be consulted before taking any documents to better understand the potential pitfalls in the chosen course of conduct.
What do whistleblower laws say about taking documents?
Under the False Claims Act and Dodd-Frank Act, whistleblowers are protected from retaliation when they are engaged in lawful acts. The False Claims Act authorizes relief for discrimination in the terms and conditions of employment “because of lawful acts done by the employee, contractor, agent or associated others in furtherance of an action under this section or other efforts to stop 1 or more violations of this subchapter.” 31 U.S.C. § 3730(h)(1). Similarly, Dodd-Frank prohibited discrimination against “a whistleblower in the terms and conditions of employment because of any lawful act done by the whistleblower….” 15 U.S.C. § 78u–6(h)(1)(A). The SEC will also not pay a reward for information that is obtained in violation of federal or state criminal law according to a United States court. Rule 21F-4(b)(4)(iv).
Taking corporate documents, however, raises the potential for the individual’s acts to be considered unlawful and outside of the protection offered by these laws. Under some circumstances, courts have permitted employers to terminate employees who have purloined documents. The determination of what is a “lawful act” has been left to administrative bodies and the courts to decide, resulting in some uncertainty in a crucial area for whistleblowers.
The New York False Claims Act, for example, addresses this problem, defining a “lawful act” to narrowly permit an individual to obtain and disclose documents which might otherwise violate a duty to the employer. It permits “obtaining or transmitting to the state, a local government, a qui tam plaintiff, or private counsel solely employed to investigate, potentially file, or file a cause of action under this article, documents, data, correspondence, electronic mail, or any other information, even though such act may violate a contract, employment term, or duty owed to the employer or contractor, so long as the possession and transmission of such documents are for the sole purpose of furthering efforts to stop one or more violations of this article.” N.Y. STF. LAW § 191. However, even in New York where “lawful act” is defined, it does not completely resolve potential issues. A whistleblower does not have unfettered permission to take documents. “Nothing in this subdivision shall be interpreted to prevent any law enforcement authority from bringing a civil or criminal action against any person for violating any provision of law.” Id.