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What Potential Whistleblowers Need to Know About the Proposed FTC Whistleblower Act of 2021

Posted  December 16, 2021
By Taline Sahakian, Kristian Soltes


Employees who are considering reporting wrongdoing by their employers to the Federal Trade Commission (“FTC”) may get some added incentives and protection if a proposed whistleblower bill becomes law.

The proposed FTC Whistleblower Act of 2021 (the “Bill”) was introduced in the House of Representatives on November 30, 2021, by Congresswoman Jan Schakowsky (D-IL) and Congresswoman Lori Trahan (D-MA). Here are some essential facts about it would mean for potential whistleblowers and their employers.

What is its status?

After it was introduced in the House, it was referred to two Committees: (1) the Committee on Education and Labor, and (2) the Committee on Energy and Commerce, Subcommittee on Consumer Protection and Commerce. It still needs to undergo committee review before a vote in the House.

What does the Bill propose to do?

The Bill establishes protections (from retaliation) and incentives for whistleblower who come forward with information about violations of consumer protection and antitrust laws and regulations that are under the purview of the Federal Trade Commission.

Examples of violations of antitrust laws include price-fixing, bid-rigging and market allocation schemes.  Examples of violations of consumer protection laws include unfair and deceptive advertising practices and consumer scams.

Who are the whistleblowers covered by the Bill?

They could be current or former full-time, part-time or temporary employees, contractors, subcontractors, grantees, subgrantees, or agents of any entity or person defined as a “covered entity,” or an employee of a contractor or subcontractor of the covered entity, who report violations to the FTC.  Persons that assist such whistleblowers would also be protected by the Bill.

Who are the “covered entity” employers that would be affected by the Bill?

They would be entities or individual subject to the jurisdiction of the FTC. The Commission regulates virtually every area of commerce, including alcohol, automobiles, human resources, insurance companies, non-profits, real estate and mortgages, transportation and communications common carriers, air carriers, and other industries.

What anti-retaliation protections does the Bill provide?

The Bill provides that employers may not “directly or indirectly, discharge, demote, suspend, threaten, harass, blacklist, or in any other manner discriminate or take an adverse personnel action against” a whistleblower or potential whistleblower. It also gives the whistleblower subject to retaliation a cause of action.

Efforts to impede or prevent communications by the whistleblower would be treated as violations of the rule prohibiting unfair or deceptive acts or practices under section 18(a)(1)(B) of the FTC Act (15 U.S.C. 57a(a)(1)(B)).

What types of incentives could whistleblowers get under the Bill?

A whistleblower could receive a monetary award that amounts to between 10 and 30 percent of monetary sanctions collected by the FTC, if the whistleblower (1) provided information voluntarily, (2) the information was original, (3) it related to a potential or suspected violation of any law, rule, or regulation enforced by the FTC, and (4) the information provided led to the successful resolution of the action.

Successful resolution of the action would include settlement or adjudication of the action in an administrative or judicial setting brought by the FTC or the Attorney General that results in monetary sanctions exceeding $1 million.

Is an award to the whistleblower discretionary?

Yes. The FTC would consider factors such as: the significance of the original information provided by the whistleblower to achieving a successful result, and the degree of assistance provided by the whistleblower and its representatives.

The FTC would have the discretion to deny an award if the whistleblower did not provide original information, was convicted of a crime related to activity he or she disclosed, or deliberately caused or substantially contributed to the violation of laws.

Would the Bill only apply to future violations?

No. A whistleblower would be able to receive an award even if the violation about which he or she has information occurred before the date of the enactment of the law.

Are there other current legislative initiatives to strengthen whistleblowing to the FTC?

Yes. On February 4, 2021, Senator Amy Klobuchar (D-MN) introduced S.225, the Competition and Antitrust Law Enforcement Reform Act. Among other things, the Senate bill would also provide anti-retaliation protections to any whistleblower reporting a potential antitrust violation, and financial incentives to a whistleblower reporting a criminal antitrust violation. The bill was referred to the Senate Committee on the Judiciary where it is pending review.

Written by Taline Sahakian, Kris Soltes and Yo Shiina

Edited by Gary J. Malone

Tagged in: Antitrust Enforcement,