Protecting Whistleblowers by Contract

Numerous statutes and the tort of wrongful discharge pur-port to prohibit companies from retaliating against employee whistleblowers. However, whistleblowers often lose retaliation lawsuits because these statutory and common law tort protections depend upon a variety of nuanced factors, such as the employer for whom the whistleblower works, the kind of wrongdoing reported, the way in which the employee blew the whistle, and, under some laws, the willingness of an administrative agency to investigate the whistleblower's claim. Given these difficulties, this Article explores an alternate route for whistleblower protection: enforcing the existing contract protections that private employers currently provide employees when they report misconduct. Rules recently enacted by the major stock exchanges now require each publicly traded company to publish a Code of Business Conduct and Ethics promising not to retaliate against employees.

These Code anti-retaliation promises potentially provide broader whistleblower protection than statutory and tort protections, and enforcing the Codes contractually could address the weaknesses of the traditional remedies. This Article highlights the benefits of breach of contract claims based on corporate Codes, addresses the potential difficulties that whistleblowers may face when asserting such claims, and presents possible solutions to these problems.