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After Theranos … What Protections Exist for Whistleblowers?

In January 2022, entrepreneur Elizabeth Homes was found guilty of defrauding investors in her now defunct company, Theranos. Theranos had sought to change the way that blood testing was administered, requiring only a small amount of blood from a finger prick to run a number of tests, rather than the usual phials taken in an intravenous draw.  However, Theranos’s technological abilities did not measure up to the claims, and Elizabeth Holmes was found to have deliberately lied about this.

How did Theranos go from at one time being valued at $9bn, to nothing? Two people who played an important role in exposing the false claims were Tyler Shultz and Erika Cheung; amongst others, both former Theranos employees sought to raise the concerns about the technology internally, but their concerns were dismissed. When both had left the business, Theranos attempted to silence them using aggressive legal tactics, and Tyler’s relationship with his own grandfather (former US Secretary of State George Shultz), who has a close relationship with Elizabeth, was also impacted.

Theranos was based in the USA, but people working in organisations around the world may feel the need to ‘blow the whistle’ for a range of reasons.  As such, in the remainder of this blog, we consider what constitutes whistleblowing, and the protections in place for employees in England and Wales.

Whistleblowing is when an employee raises a concern about potential wrongdoing, usually in the workplace, that is in the public interest, i.e. something that affects others and not just them (if it just affects them then this would be a grievance).  Legal protections exist for those that ‘blow the whistle’, meaning that they should not be treated unfairly or lose their job because they raised their concerns.

Whistleblowing legislation protects those who report any of the following:

  • a criminal offence, for example fraud;
  • someone’s health and safety is in danger;
  • risk or actual damage to the environment;
  • a miscarriage of justice;
  • the company is breaking the law, for example does not have the right insurance;
  • you believe someone is covering up wrongdoing.

If you are an employer who is in receipt of an employee raising concerns, you may already have an up-to-date Whistleblowing policy in place, and should follow this if so.  However, if not, you should begin by meeting with the employee to gather the necessary information to understand the situation.  You should allow the employee to be accompanied, as you would for a grievance hearing.  From this, it may be that a resolution can be easily reached through discussion, or it may be that a full investigation should be undertaken.

All disclosures should be treated seriously, and you will need to consider who is suitable to look into matters (to ensure that they are suitably independent).  Employees may request confidentiality, and if they do, every effort should be made to protect their identity.

Once you have undertaken the necessary steps to understand the employee’s concern, you will then decide if any action is needed.  Employees are often well-placed to identify opportunities for improvement, and so it may be helpful to listen to any suggestions that they have, however gov.uk warns employees that“You will not have a say in how your concern is dealt with.”.

Employees who ‘blow the whistle’ are legally protected from any unfair treatment, including losing their job, but also experiencing other detriment, such as not getting a promotion or pay rise that they otherwise would have, or being disciplined for raising their concerns.  As such, you should treat the employee in exactly the same way as if they hadn’t.

Creating an open and transparent culture where people feel safe to speak up can provide opportunities to protect the organisation’s performance, reputation and those that work within it from harm.

If your organisation would benefit from guidance on how to respond to a whistleblowing concern, or support to create a culture where employees feel able to raise concerns, please contact a member of the View HR team for a discussion.