PUBLICATION in Le Monde du Droit: "The European whistleblower protection status is applicable in France"

Since September 1er 2022, the European whistleblower protection status applicable in France.

Following established case law, the Cayenne Court of Appeal, on September 2, 2022 [1] recalled that an employee who reports a crime under the conditions of Law No. 2016-1991 of December 9, 2016 "Sapin 2" [2] benefits from the protective status of "whistleblower". His employer may therefore not dismiss him for the report he has made.

This decision came 24 hours after the entry into force of the new laws of March 21, 2022 - the Organic Law No. 2022-400 [3] (hereinafter the "Organic Law") on the Human Rights Defender and the Law No. 2022-401 [4] (hereinafter the "Law") on whistleblowers transposing the European Directive on the protection of whistleblowers [5].

The status of whistleblowers, which had been the subject of several legislations in France, is now unified and stabilized, after having been validated by the Constitutional Council [6].

This status concerns both the public and private sectors. Let's see what it is for companies.

The Human Rights Defender is invited to support whistleblowers.

The Human Rights Defender has a constitutional status. Therefore, an organic law, if not a revision of the Constitution, was needed to modify it. After the Constitutional Council declared in 2016 [7] that the extension of the competences of the Human Rights Defender provided for by the Sapin 2 law to support whistleblowers was unconstitutional, this extension has now been declared compliant since it stems from a European directive which takes precedence over domestic law. The Constitutional Council recalls that it "is not competent to review the conformity with the Constitution of legislative provisions that merely draw the necessary consequences from unconditional and precise provisions of a directive" [8].

The Rights Defender, assisted by a deputy, is thus given the mission of guiding, informing, advising and, if necessary, defending whistleblowers. Anyone can ask him to give an opinion within six months on "his status as a whistleblower" by assessing "whether he has complied with the conditions for benefiting from the protection provided". Companies must inform their employees of this new role of the Human Rights Defender, through internal communications and/or training.

The Human Rights Defender is finally becoming one of the possible channels for reporting. When a whistleblower contacts the Ombudsman, he will either process the report or pass it on to the competent authority.

The whistleblower, who must be acting in good faith, may choose to remain anonymous.

The Act defines a whistleblower as "a natural person who reports or discloses, without direct financial compensation and in good faith, information concerning a crime, an offence, a threat or harm to the general interest, a violation or an attempt to conceal a violation of an international commitment duly ratified or approved by France, of a unilateral act of an international organization taken on the basis of such a commitment, of the law of the European Union, or of a law or regulation".

The requirement of good faith is an essential condition of the public interest mission of reporting offences or reprehensible facts. The intention to harm has no place in the motivations of the whistleblower. The jurisprudence considers that the good faith of a whistleblower can only be challenged "if it is established that he or she was aware of the falsity of the facts denounced" [9]. A whistleblower can therefore be mistaken if he or she is acting in good faith.

The whistleblower can now remain anonymous. This is an important change, as the Sapin 2 law, unlike most foreign laws, only allowed it in exceptional cases. Anonymity will multiply the number of reports and sometimes make it more difficult to investigate them. Sanctioning bad faith is not possible in this case, whereas reporting facts that are known to be false can cause serious harm. Nevertheless, anonymity constitutes a necessary protection, as the act of whistleblowing - even if it is entirely justified - is of a serious nature, not to mention the retaliatory measures to which whistleblowers may fall victim when they act openly.    

The whistleblower can report facts that he or she does not know that another person has reported to him or her.

Under the Sapin 2 law, whistleblowers could only report facts of which they had personal knowledge. From now on, he can denounce facts that have been reported to him in the professional context. He can, for example, echo a colleague who does not want to report himself. This protection is in addition to the protection of anonymity. The whistleblower must therefore be vigilant to avoid being manipulated by a third party.

Only if the information was not obtained in the course of professional activities must the whistleblower have personal knowledge of it.

The whistleblower may denounce any facts of any nature, regardless of their degree of seriousness.

He may denounce infractions, but also a "threat" or a "prejudice to the general interest", all notions that will have to be specified by the jurisprudence. The Court of Cassation, in a decision of January 19, 2022, which occurred before the status of whistleblower was established in France, considered that an employee who denounces in good faith facts constituting a breach of the provisions of the code of ethics of the profession of statutory auditor, should be protected in his freedom of expression [10]. It can be assumed that conflicts of interest, subject to the sovereign appreciation of the courts, could be considered as a "prejudice to the general interest".

The whistleblower can also denounce "a violation or an attempt to conceal a violation of an international commitment regularly ratified or approved by France, of a unilateral act of an international organization taken on the basis of such a commitment, of the law of the European Union, of the law or of the regulations", i.e. an extremely broad spectrum. The new law therefore no longer requires that the misconduct complained of be "serious or manifest".

However, the report cannot, of course, concern facts covered by national defense secrecy, medical secrecy, lawyer's professional secrecy - prohibitions introduced by the Sapin 2 law - to which the new law adds the secrecy of judicial deliberations and the secrecy of the investigation and inquiry. Nothing is said about industrial and commercial secrecy, the disclosure of which implies that the obligation of confidentiality imposed on employees is lifted.

The whistleblower cannot be paid for reporting.

He must not receive any "direct financial compensation", whether from the person receiving the alert or from a third party. "Indirect" financial compensation is possible under conditions to be specified by case law.

The prohibition of remuneration for whistleblowers distinguishes the European Union from the United States, where whistleblowers are paid. Three federal laws authorize it: the False Claim Act [11], the Dodd-Frank Act [12] and the Internal Revenue Act [13]. In 2021, three whistleblowers received approximately $200 million [14], $110 million [15] and $50 million [16] respectively from the Commodity Futures Trading Commission ("CFTC") and the Security Exchange Commission ("SEC") for exposing fraud. The Internal Revenue Service ("IRS") also has a whistleblower compensation program. Depending on the jurisdiction, compensation ranges from 15% to 25% or 10% to 30% of the earnings made by the agency, which can be significant. Each agency has its own whistleblower policy, but in most cases, whistleblowers are assisted by a lawyer to enhance the value of their reports and their personal involvement.

Inspired by the American system, France has created a system of remuneration for "tax advisors". This system, which was originally experimental [17], was made permanent by a decree of May 15, 2019 [18] in application of the Finance Act for 2020 [19]. According to this decree, "the General Directorate of Public Finance may compensate any person outside the public administrations who has provided it with information leading to the discovery [of tax fraud]". It is the director general of public finance who sets the compensation, on the proposal of the director of the national tax investigation department, by reference to the estimated amounts of taxes evaded. Six tax auditors have been paid and twenty-four tax audits have been carried out after a report [20], as confirmed by a judgement of 7 July 2022 of the administrative court of Montreuil [21] concerning tax fraud. Paid tax advisors should survive the creation of the European whistleblower status.

The whistleblower is free to use the reporting channel of his/her choice.

In accordance with the case law of the European Court of Human Rights [22], the Sapin 2 law required that a three-step procedure be followed: the whistleblower was first required to use the company's internal system and only considered reporting to the judicial or administrative authorities if the whistleblower's report was not processed within a reasonable time. Finally, it was only if the whistleblower's report was not dealt with within three months by the public authorities that he could publicly disclose the facts.

This gradation has been eliminated. However, public denunciation is subject to conditions: it is only allowed if the judicial authority does not deal with the report within a period of time to be determined by decree in the Council of State, if there is a risk of reprisals, if the report has no chance of succeeding, or finally in cases of serious and imminent danger, particularly in the face of "emergency situations" or if there is a "risk of irreversible harm".

The possibility of a public disclosure will not prevent some from preferring to address the media by benefiting from the protection of journalistic sources resulting from the law n° 2010-1 of January 4, 2010.

Whether public or secret, denunciation in the media can have a considerable impact, notably by triggering prosecutions by public prosecutors acting on the basis of information published in the media. The protection of the respondent suffers. Because if he is then cleared, the damage will have been done.

The whistleblower may not be subject to retaliatory measures.

At the heart of whistleblower protection is the prohibition of retaliatory measures. The Act sets out an impressive list of such measures, including suspension, layoff, dismissal, demotion, refusal of promotion, negative performance appraisal, disciplinary measures, harassment, discrimination, disadvantageous or unfair treatment, failure to convert a fixed-term or temporary contract of employment into a permanent one where the worker had a legitimate expectation of being offered permanent employment, non-renewal or early termination of a fixed-term or temporary contract of employment, etc. The legislator has contemplated virtually every possible scenario.

Under previous laws, judges had the opportunity to censure retaliatory measures against a whistleblower such as wrongful dismissal [23], moral harassment [24], wrongful layoff [25] or even suspension and then reduction of the employee's compensation [26]. But the new law extends the spectrum of possible retaliatory measures.

Protection of the respondent against the bad faith of the whistleblower.

It is regrettable that the Law does not mention the protection of the respondent. It is true that it is ensured by established jurisprudence; the respondent may engage the liability of the whistleblower in bad faith [27]; the burden of proof is on the latter.

An employee who has denounced practices of his employer, for example, must prove his good faith by presenting "sufficient elements to presume that he has reported or testified in good faith to the management of [infringing] facts committed within the company, [failing which] he is not entitled to claim whistleblower status" [28]. The case law is constant [29].

A whistleblower who does not establish these elements may be subject to both civil [30] and criminal legal proceedings, in particular for slander [31] or defamation [32]. However, with respect to the person to whom he has harmed, there is little chance that the whistleblower will be solvent. The European or French legislator should have considered this point.

The Act gives "facilitators" the same protections as whistleblowers.

The "facilitator", previously unknown in French law, is "any natural person or any legal entity under private law with a non-profit purpose who helps a whistleblower to make a report or disclosure in compliance with the law".

The European legislator had envisaged only natural persons as facilitators. The French legislator has added legal entities, i.e. primarily NGOs. It remains to be seen how these facilitators will behave. Will they support the whistleblower publicly or anonymously? Will they encourage people to become whistleblowers? Will they check whether the whistleblower who contacts them is bona fide? These are all open questions.

To conclude, some basic recommendations for companies:

• It is important to consider whether internal whistleblower policies need to be updated to reflect the new law;

• It is important to ensure that the alert system is technically functioning properly and that the alert is handled appropriately so as not to encourage the whistleblower to turn to external channels;

• It is preferable to have a dedicated staff - in house or external provider - to manage alerts;

• Internal investigations, whether or not entrusted to outside counsel, must be carried out both with a punitive aim and to remedy the dysfunctions observed in the company;

• Zero tolerance for retaliatory action is required;

• The protection of the respondent must be a constant concern until the respondent's actions are found to be reprehensible after an investigation;

• Internal communication plans and training programs must be put in place to raise awareness of the new Act;

• An annual review of alerts should be conducted and lessons learned;

• To avoid unnecessary litigation, dialogue must be established with employees and their unions, and external partners;

• In the event of legal proceedings or media controversy following internal or external reports, it is important to be able to document the company's practices.

An external view on the functioning of the alert and the culture of the company is always useful, especially in view of the exponential development of professional alerts.

Noëlle Lenoir, Partner of Noëlle Lenoir Avocats

Irène Lim, Lawyer at Noëlle Lenoir Avocats


[1] CA Cayenne, September 2, 2022, No. 22/00013. 

[2] Law No. 2016-1691 of December 9, 2016 on transparency, the fight against corruption and the modernization of economic life.

[3] Organic law no. 2022-400 of March 21, 2022 to strengthen the role of the Human Rights Defender in the field of whistleblowing.

[4] Law n° 2022-401 of March 21, 2022 aimed at improving the protection of whistleblowers.

[5] Directive 2019/1937 of October 23, 2019 on the protection of persons who report violations of Union law.

[6] Constitutional Council, decision no. 2022-839 DC of March 17, 2022, Law to improve the protection of whistleblowers.

[7] Constitutional Council, Decision No. 2016-740 DC of December 8, 2016, Loi organique relative à la compétence du Défenseur des droits pour l'orientation et la protection des lanceurs d'alerte.

[8] Constitutional Council, decision no. 2022-838 DC of March 17, 2022, Loi organique visant à renforcer le rôle du Défenseur des droits en matière de signalement d'alerte.

[9] Bordeaux Court of Appeal, Social Division, Section A, June 29, 2022, No. 19/01312.

[10] Cass. soc., January 19, 2022 n° 20-10.057.

[11] The False Claim Act (31 U.S.C §§3729) allows the U.S. government to pay whistleblowers 15 to 30 percent of the amount of the fine collected in government contract fraud cases.

[12] The Dodd-Frank Act (15 U.S.C § 78u-6(b)(1)) allows the U.S. securities regulator, the Securities Exchange Commission, to pay whistleblowers 10-30% of the fine collected in financial fraud cases.

[13] The Internal Revenue Act (26. U.S.C §7623(b)) allows the U.S. tax agency, the Secretary of the Treasury, to pay whistleblowers 15-30% of the fine collected in tax fraud cases.

[14] https://www.cftc.gov/PressRoom/PressReleases/8453-21

[15] https://www.sec.gov/news/press-release/2021-177

[16] https://www.sec.gov/news/press-release/2021-62

[17] Decree No. 2017-601 of April 21, 2017, issued for the application of Article 109 of Law No. 2016-1917 of December 29, 2016, on Finance for 2017.

[18] Decree No. 2019-459 of May 15, 2019, amending Decree No. 2017-601 of April 21, 2017, issued for the application of Article 109 of the Finance Act No. 2016-1917 of December 29, 2016, for 2017.

[19] Finance Act No. 2019-1479 of December 28, 2019, for 2020.

[20] Information report AN n° 4489 on the implementation of the conclusions of the information mission on tax advisors, tabled by the Committee on Finance, the General Economy and Budgetary Control and presented by Mrs. Pires Beaune, of 22 September 2021, page 11.

[21] TA Montreuil, 1st ch., July 7, 2022, no. 2101809, concerning a former employee of the UBS bank who helped uncover a tax fraud scheme.

[22] ECHR, January 8, 2013, Bucur and Toma v. Romania, No. 40238/02; ECHR, February 9, 2009, Martchenko v. Ukraine, No. 4063/04.

[23] Cass. soc., Feb. 16, 2022, n° 19-17.871.

[24] CA Paris, division 6 - ch. 10, Feb. 23, 2022, n° 19/07702.

[25] CA Amiens, 5th ch. prud'homale, March 17, 2022, n° 21/01843.

[26] CA Aix-en-Provence, ch. 4-3, Nov. 26, 2021, n° 21/03277.

[27] CA Bordeaux, June 29, 2022, n° 19/01312.

[28] CA Angers, May 19, 2022, n° 19/00636.

[29] CA Bourges, ch. soc., May 6, 2022, n° 21/01146; CA Paris, pôle 6 - ch. 8, Apr. 7, 2022, n° 19/07699; CA Grenoble, ch. soc -sect. b, Sept. 23, 2021, n° 19/01778.

[30] CA Angers, May 19, 2022, n° 19/00636.

[31] T. corr. Paris, Nov. 26, 2020, no. 2.

[32] Cass. crim., Apr. 12, 2016, n° 14-87.607.