Workplace Misconduct Falls to Historic Low

A biennial survey of workers at for-profit companies declared victory for ethics and compliance programs in 2013. Whistleblowers, however, still face retaliation at alarming levels when they report issues.

According to the Ethics Resource Center, workplace misconduct has steadily and significantly dropped since 2007 when it hit an all time high. Reports of corporate misconduct are now at their lowest since the Ethics Resource Center started conducting the biennial survey in 1994. The results of the survey were released in the 2013 National Business Ethics Survey of the U.S. Workforce in early February.

It will be interesting to see whether the survey results are confirmed by whistleblower statistics in the next few years. The drop in workplace misconduct stands in stark contrast to reports of record whistleblower rewards and increasing submissions to whistleblower programs. There are potential explanations for the discrepancy, of course. Prosecutions for fraud are a lagging indicator, as investigations and enforcement take time. Increased submissions could be explained by the recency of changes in whistleblower law and higher publicity about awards for external reporting.

Despite Drop, Workplace Misconduct Continues.

This doesn’t mean the work of whistleblowers is over. Although misconduct may have fallen to historically low levels, 41 percent of workers surveyed still reported observing misconduct on the job. Among the reports, significant misconduct in 2013 happened at troubling percentages:

– Four percent observed a coworker accepting gifts or kickbacks from suppliers or vendors.
– Four percent observed a coworker offering something of value to influence a client or customer.
– Three percent observed a coworker falsifying and/or manipulating financial reporting information.
– Two percent observed a coworker offering something of value to influence a public official.
– Two percent observed a coworker making improper political contributions to officials or organizations.

Another concern raised by the survey is the percentage of misconduct by supervisors and senior management. Managers and supervisors accounted for sixty percent of total misconduct. Senior managers were involved in an amazing 26 percent of the misconduct reported in the survey. The prevalence of high level misconduct might set a bad example for workers and could lead to an increase in misconduct in the future.

Retaliation against reporters of misconduct also remains near an all time high. Although corporate ethics may have improved, more than one in five individuals who report misconduct at work faced some form of retaliation as a result. The number reached a record high in 2011, when 22 percent reported retaliation by a supervisor or coworker. If high levels of retaliation continue, whistleblowers may become less likely to come forward. The strength of anti-retaliation protections in the whistleblower laws will become even more important.

McEldrew Young represents whistleblowers reporting securities, tax and health care fraud to the government. For a free confidential consultation, please call Eric L. Young, Esquire at 1-800-590-4116 or complete our online contact form.

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