In September 2024, the U.S. Department of Justice (DOJ) published an updated Evaluation of Corporate Compliance Programs to provide a roadmap for companies on how to run their internal compliance to avoid prosecution, decrease monetary penalties, and streamline the settlement process. The updated document includes a new section focused on whistleblower protocols.

The new guidance comes on the heels of the DOJ’s new corporate whistleblower award program unveiled in August. In addition to waiving mandatory rewards, putting caps on maximum awards, and limiting anonymity, the pilot program encourages whistleblowers to report internally before submitting information to the DOJ. In contrast to reporting directly to the government, there are significantly weaker whistleblower protections for internal reporting. By reporting internally, whistleblowers risk their identity being exposed and retaliation by their employer and in turn the possibility of corporate disclosure to the proper authorities—critical to investors, law enforcement, and the general public—dims.

The new DOJ release is another formal step to align the interests of law enforcement and corporate enterprise. As good-intentioned as it may be, it will have a perverse effect on accountability due to deficiencies within the corporate compliance regime that Justice has not addressed. These include failure to recognize that under key whistleblower laws such as Dodd-Frank, internal whistleblowing is not protected and those...

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