Business Law: Analysis of Whistleblowing Theories and Practices

This report delves into the multifaceted realm of whistleblowing within the context of business law. It meticulously examines three prominent theories: the standard theory, De George's theory, and the universal dignity theory, providing a comprehensive understanding of their ethical underpinnings and practical implications. The report explores the moral permissibility and requirements of whistleblowing, the criteria for determining its justification, and the varying perspectives on loyalty within these frameworks. Furthermore, the analysis extends to a global perspective, comparing the legal and regulatory landscapes of whistleblowing in countries such as Canada, the United States, and Australia. It highlights the specific laws and protections afforded to whistleblowers, along with the nuances of each jurisdiction's approach to this critical issue. The report underscores the importance of whistleblowing in upholding ethical standards, protecting public interest, and ensuring accountability in various organizational settings. This assignment solution is available on Desklib, a platform offering past papers and solved assignments for students.

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BUSINESS LAW
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Theories of whistleblowing
The term whistleblowing refers to the disclosure of hidden information about fellow
members in an organisation who have been a part of immoral and illegitimate practices under
their employers' supervision. Such disclosure of facts is usually done to an organisation or
authority which has the potential to stop such immoral practices from going on further.
Whistleblowing also refers to the disclosure of information which has been hidden or control
by an organisation, affecting a public policy or interest. Therefore whistleblowing could be
categorised into internal whistleblowing, public whistleblowing and whistleblowing to
regulatory agencies. Whistleblowing being a critical issue is therefore being dealt by several
laws in order to protect the whistle-blowers. A few theories of whistleblowing is studied
through different ethical approaches that helps to explore the different objectives and
purposes behind whistleblowing.
The standard theory
The standard theory refers to the instance of whistleblowing which is morally
permissible. Whistleblowing is morally permissible as per the standard theory when: a) the
organisation against whom the whistleblowing would be done is involved in in an illegal or
immoral activity that breaches public policy or public interest; b) the whistle-blower has
identified that the conduct of whistleblowing may result to certain harmful consequences
when reported to the senior management agency about the hidden information; and c) the
whistle-blower has exhausted the different internal sources that could be approached for
disclosing the sensitive information and therefore the whistle-blower reaches up to an
external source which is a regulatory body in order to secure his own personal safety (Davis
1996).
According to the standard theory, whistleblowing is necessary when:

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a) The whistle-blower has sufficient evidence in regard to the hidden sensitive
information which if disclosed to an impartial source, would give the real picture of
the moral players of the whistle-blower’s organisation.
b) The whistle-blower believes that the disclosure of the sensitive information that has
been hiding by the immoral players of the organisation, blue lesson the harm at a
reasonable cost.
As per the standard theory, whistleblowing is morally needed as man is under a moral
duty to take actions in order to prevent serious harm that might be a significant issue to
another, jeopardizing people's safety or even life. Therefore, as per the theory,
whistleblowing that meets all the five conditions seems like a 'minimally decent
Samaritanism' rather than a 'good samaritanism'. The standard theory is not a definition of
whistleblowing or accounts to justify whistleblowing. It is just a theory that provide sufficient
conditions for the applicability of whistleblowing. These five conditions identify the centre
point of whistleblowing by supporting it with morality. It could be deduced that this theory
lays down certain conditions that purports whistleblowing but not the 'necessary conditions’,
that is, the situation 'when’ and not 'only when’ whistleblowing would be justified. Even
though it seems like in incomplete theory, yet it is as useful as any other theories of practical
ethics.
De George’s Theory of Whistleblowing
Richard De George, in his book ‘Business Ethics’ held an essay on ‘’Whistle-
blowing’ and his theories supporting whistle-blowing. He specified that whistle-blowing has
three positions which indicate that whistleblowing as morally permitted, whistleblowing as
morally prohibited and whistleblowing as morally required (Davis 2013). He began his essay
with the position that whistleblowing should be morally prohibited due to the cultural

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resistance. He mentioned that American tradition does not support the idea of ‘rattling; or
speaking against others in any given situation in a business setup. In support of this position,
De George mentioned that the rationale behind speaking against whistleblowing is that it is
contrary to the idea of loyalty. However, he further discussed the position of ‘whistleblowing
as morally permitted’ and ‘whistleblowing as morally required’ by stating that this position
should be strongly supported (Davis 2013). In this regard, he laid down five criteria for
determining whether whistleblowing should be morally permitted or required:
 Whistleblowing should be morally permitted, when:
a) the company or organisation is purporting to do a serious harm to the public through its
products or policies;
b) an employee or member of such company or organisation identifies a threat to the user of
the product, he must report such threat to his supervisor, thereby making it his moral concern
to stop or disclose it;
c) internal possibilities of addressing the threat ends even after the person in superior position
does not takes necessary actions, the employee or member must escalate the matter up the
managerial level and even to the board of directors.
 Whistleblowing when morally required:
a) when the member or employee of the company or organisation has an access to evidential
documents as to the potential threat that any person of ordinary prudence could be convinced
about the danger or harm that the purchasers of the product or the general public would be
open to; and
b) when such member or employee could justify that his disclosure of the hidden information
is likely to bring a necessary change in the system and would have the purchasers or general
public safe, thereby justifying the risk-taking.

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Criticising Richard de George, Gene James has pointed out that the criteria mentioned
by De George has been very extensive and therefore it becomes challenging to meet all the
criteria which may lead to a hostile situation (James 2001). Organisational issues like
industrial espionage, sexual harassment at workplace insider trading and such other critical
issues may not see the light of the day due to the strict rules of meeting so many criteria.
The Universal Dignity Theory of Whistle-blowing
It is held that the significance of business ethics is to prescribe a guidance of ethical
conduct to the players of business which includes practices like whistle-blowing. Thereby it
is held that the main principle of ethical principle of business is to lay down the universal
dignity of human and their necessity to take actions in regard to establishing dignity for all.
As per this foundation, the Universal Dignity Theory of Whistleblowing (UDTW) has been
formed. Its most essential principles is that Whistle-blowing is not only permissible but also a
moral and universal duty of employees by which they must strive to protect the dignity of the
stakeholders involved (Hoffman and McNulty 2017).
To draw a differentiation between the Universal Dignity Theory of Whistleblowing
and the theory held by Richard De George, it could be held that De George’s theory is much
more stringent that UDTW as the former speaks more against whistle-blowing while the
latter supports whistle-blowing in case the employee has an intimation about the a any
possible threat or risk that might affect anyone (Hoffman and McNulty 2017). Both the
theories are based on different notion of loyalty; to the former loyalty is referred to one’s
employer or the organisation, while the latter focuses more on the loyalty to public policy and
public interest.

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Whistle-blowing as seen in different parts of the world
Whistleblowing is handled quite sensitively by all modern countries of the world,
even though legal protection for the whistle-blower may vary from one country to another
and also on the basis of the how the secret information about the organisation has been
released. Most countries today have adopted comprehensive regulations for whistle-blowing
which involve unique mechanisms of reporting wrongdoing of an organisation.
Canada
A confidential and safe mechanism to report wrongdoings is provided by the Office of
the Public Sector Integrity Commissioner of Canada (PSIC) in regard to enable public
servants as well as general public to disclose the wrongdoings that are committed in the
public sector. This office is governed by the Public Servants Disclosure Protection Act which
is applicable to all the federal public sector including government department. The
commissioner, however, has the discretion to decide whether to accept a case of
whistleblowing and address it.
United States
The federal laws of the US requires all employees to be certain that their employer
has breached some law or regulation in order to testify against him. Whistleblowing has been
counted as tradition since the Benjamin Franklin had leaked certain documents in the
Hutchinson affair in 1773. Another instance would be the whistleblowing case of 1777-8
involving Samuel Shaw and Richard Marven where the two seamen had brought allegation
against the commander in chief of the Continental Navy Esek Hopkins for torturing British
war prisoners. However, in the case of Garcetti v. Ceballos, 547 U.S. 410 (2006) it was held
that the First Amendment of the Constitution of America does not guarantees protection to

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the citizen in respect of a disclosure made in the capacity of an employee, while executing an
employee’s duty to disclose potential threat that might bring harm to the organisation by
another employee or a harm to the public by the organisation.
Laws regarding whistleblowing in Australia
Whistleblowing is the disclosure of hidden information about fellow members in an
organisation who have been a part of immoral and illegitimate practices under their
employers' supervision. Such disclosure of facts is usually done to an organisation or
authority which has the potential to stop such immoral practices from going on further.
Whistleblowing protection is Australia is offered to those who wish to disclose certain
sensitive information, irrespective of the department, be it a federal or state or private sector.
The Public Interest Disclosure Act 2013 (PID Act) was incorporated by the Australia
government n order to protect the whistle-blowers of the commonwealth public sector. It
protects the whistle-blower from the charges of unauthorised whistleblowing or federal
information which is a crime under section 70 of the Crimes Act 1914, penalizing the
unauthorised whistleblower with imprisonment for a period of two years. The National
Security Amendment Act (No 1) 2014 (Cth), on the other hand, has provision to penalize a
person who blows the whistle with authorization of the Special Intelligence Operation, as it
may jeopardize national security. Section 42 of the Australian Border Force Act 2015 (Cth)
penalizes anyone who makes disclosure in regard to an Australian immigration detention
facility, without authorization. It is however an exemption has where people are protected by
the Public Interest Disclosure Act 2013 (PID Act). Therefore it could be clearly pointed that
Australia is not extremely welcoming towards the concept of whistleblowing as it can be
evidenced through such stringent legislative provisions. In this regard, Section 42 of the

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Australian Border Force Act 2015 (Cth) has been criticized by the Lawyers Alliance for
being indifferent towards the concept of whistleblowing and the protection of whistleblowers.
Transparency International Australia (TI) has pointed out that the whistleblowers in
the private sector is less protected in comparison to the whistleblowers in the public sector, as
they lack the support for protective legislation or regulation which would protect them from
the vicious retaliation.

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References
Australian Border Force Act 2015 (Cth)
Australian Border Force Act 2015 (Cth)
Crimes Act 1914
Davis, M., 1996. Some paradoxes of whistleblowing. Business and Professional Ethics
Journal, 15(1), pp.3-19.
Davis, M., 2013. Whistleblowing. International Encyclopedia of Ethics.
Garcetti v. Ceballos, 547 U.S. 410 (2006)
Hoffman, W.M. and McNulty, R.E., 2017. A Business Ethics Theory of Whistleblowing
Responding to the $1 Trillion Question. In Whistleblowing (pp. 45-60). Routledge.
James, G.G., 2001. Whistleblowing: its moral justification. Markets, Finance and the
Professions, pp.310-311.
National Security Amendment Act (No 1) 2014 (Cth)
Public Interest Disclosure Act 2013 (PID Act)
Public Servants Disclosure Protection Act