External vs. Internal Whistleblowers
What It Means for Your Case
If You Report Internally or Externally
Internal whistleblowing means reporting the problem inside your company, to a supervisor, HR, or the legal department. External whistleblowing means taking it outside, to a government agency, a court, or your own attorney. The difference matters: only external reporting through the right channel triggers the strongest legal protections and the chance at a reward, but it also moves fast and largely out of your control. Talk to a whistleblower attorney before you pick a path. Call (888) 713-6653 for a free, confidential review.
Have you considered blowing the whistle about conditions or practices at your place of employment?
If so, it is important that you know the laws involved and what may happen when you decide to come forward.
Whether you are an external or internal whistleblower may play a major role in what happens next. You should understand what these terms mean so that you can decide how to handle your claims.
In this short guide, you’ll learn what whistleblowing is, and how to tell the difference between internal and external whistleblowing.
You’ll learn how to decide between these two options, and how a lawyer can help you if you face retaliation for your choice.
What happens when you become a whistleblower?
State and Federal law provide for a number of protections for whistleblowers who come forward to report fraud, misconduct, and abuse. Your complaint will be investigated, internally or by an external organization like the Dept. of Justice. Your whistleblower attorney will help you manage this complex process.
What is Considered Whistleblowing?
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Whistleblowing refers to the act of reporting waste, fraud, corruption, or other misconduct and abuses.
You can report wrongdoings that occur at either public or private organizations, but not all abuses are against the law.
When the violations you’re reporting are against the law (for example; when they include fraud against government programs) the False Claims Act (FCA) may apply.
The FCA does not apply to all types of whistleblowing. Knowing the difference between external and internal whistleblowing and the protections afforded to whistleblowers who make a protected disclosure is vital to achieving a meaningful and successful resolution.
What role does the FCA play in whistleblowing cases?
The FCA imposes significant penalties against persons or companies who defraud government programs. Health care and military contracting programs are particularly susceptible to fraud, so this law encourages whistleblowers to report this fraud by offering them a reward.
The law includes a qui tam provision that allows whistleblowers to file actions on behalf of the government. If the action is successful, whistleblowers may be rewarded with a percentage of all funds that are recovered. In the past, whistleblowers have earned millions of dollars after being a part of a successful FCA case.
What is the Difference Between External and Internal Whistleblowing
Before you blow the whistle about any practice in your workplace, you should decide whether you are going to be an external whistleblower or an internal one. To make this decision more effectively, you should understand them both.
The following will help you understand the difference between these types of whistleblowers, and help you understand how to make a protected disclosure in each case. The path you and your attorney choose will ensure you protect yourself and help end the misconduct more effectively.
Internal vs. External Whistleblowing at a Glance
| Internal Whistleblowing | External Whistleblowing | |
|---|---|---|
| Where you report | Inside the company (supervisor, HR, legal or compliance) | Outside the company (a government agency, a court, or your own attorney) |
| Legal protection | Protected in many situations, but narrower | Strongest federal protections when filed through the right channel |
| Reward eligibility | No reward for an internal report alone | 15% to 30% of the recovery in a successful qui tam case |
| Control | You keep more control early, but the company may bury it | Moves into the government's hands; you may lose control of timing |
| Confidentiality | Your identity is often known internally | A qui tam case is filed under seal, protecting your identity |
| Risk | Can tip off a dishonest employer to retaliate or destroy evidence | Preserves evidence and your first-to-file position |
Two legal rules make the channel matter. The first-to-file rule means only the first whistleblower to file a qui tam case on a given fraud can collect; the public-disclosure bar can block a case built on information already public. Reporting externally and under seal, through an attorney, protects both your reward position and your evidence.