Two Legal Changes Which Would Bolster Israel’s Protection of Whistleblowers

Like many other jurisdictions around the world, Israel has long recognized the value of whistleblowers who report and expose illegal acts in their workplaces. Without such whistleblowers, it is almost certain that Israeli citizens and law enforcement would never have learned, for example, about alleged corruption in the Israel Tax Authority, municipalities, Israel Aerospace Industries, the Ministry of Transport and Road Safety, and others. In order to encourage more whistleblowers to come forward, Israel has developed several legal instruments, the strongest and most central being the Protection of Workers (Exposure of Offenses and of Harm to Integrity or to Proper Administration) Law (PoWL) (see here and here). The PoWL, originally enacted in 1997 and amended three times since then, civilly and criminally forbids employers from retaliating against employees for whistleblowing, and establishes an employee-friendly mechanism for the victims of such retaliation to seek damages. These cases are heard by Israel’s specialized Labor Courts. In addition to awarding compensatory damages, the courts are also authorized to order employers to pay exemplary (that is, punitive) damages, and may also invalidate the whistleblower-plaintiff’s dismissal, or order that the whistleblower be moved to “another appropriate position” in the workplace.

While at first glance the PoWL seems to offer strong protections for whistleblowers, the PoWL suffers from two major weaknesses that significantly compromise its effectiveness. These problems must be addressed if the PoWL is to provide whistleblowers with adequate protections against retaliation:

  • First, the statute of limitations period is too short. A PoWL civil lawsuit must be filed within 12 months after a cause of action accrued. This is a much shorter period than the standard Israeli seven-year statute of limitations. While shorter time limits for certain types of lawsuits are not rare, either in Israel or abroad, the 12-month time limit for PoWL suits is unjustified and counterproductive. An individual whistleblower who has suffered (possible) retaliation is in a much weaker position than her employer or former employer. The whistleblower is less likely to be familiar with the law and might not immediately recognize that her dismissal or mistreatment by her employer was potentially unlawful. The short statute of limitations also discourages more “peaceful” alternatives to litigation. Filing a lawsuit is usually a death sentence to the already poor relationship between a whistleblower and her employer, and will put an end to any attempts to resolve the dispute between them in a nonlegal manner. Pressuring the employee to file a lawsuit within 12 months of the adverse employment action will often preclude the possibility of an amicable out-of-court settlement that might be better for both sides. Finally, as pointed out by Parliament Members who have proposed extending the PoWL’s statute of limitations (see here, here, and here), the 12-month statute of limitations for civil suits by whistleblowers does not harmonize well with another legal mechanism meant to protect whistleblowers, the possibility of filing a complaint with the State Ombudsman. The State Ombudsman is authorized to look into complaints of whistleblowers who are public employees, and can order remedies including damages and reinstatement. A complaint to the State Ombudsman, however, does not suspend the running of the time period to file a PoWL lawsuit. As a result, public sector whistleblowers often feel compelled to file a lawsuit against their employers concurrently with, or instead of, filing of a complaint with the State Ombudsman. This is unfortunate, because the State Ombudsman would often be a better forum for resolving some of these complaints.
  • Second, the burden of proof on whistleblower-plaintiffs under the PoWL remains too demanding. On this front, there have already been some improvements. The first version of the PoWL proved to be ineffective because it was too hard for whistleblower-plaintiffs to prove that their whistleblowing activities were the reason for the adverse employment actions they suffered. Parliament amended the law to shift the burden of proof: Now, if the whistleblower makes a sufficient preliminary showing, the burden shifts to the employer to prove that it did not violate the PoWL. While that might appear to be a very plaintiff-friendly change, on closer scrutiny it becomes clear that the amended law still places unrealistic burdens on whistleblower-plaintiffs. First of all, in order to shift the burden of proof, the whistleblower has to prove that “there was nothing in [her] behavior or actions that was a reason to harm [her] employment or fire [her.]” In fact, as argued by proponents of unsuccessful proposed PoWL amendments in 2013 and 2019, satisfying this requirement is not much different from what the whistleblower had to do under the original version of the statute: prove that the employer could not possibly have had any reason to take adverse action other than the whistleblowing. In addition, the burden of proof only shifts if the employee files her suit within 12 months of her whistleblowing. This is even shorter than the statute of limitations period, which starts running at the moment of the (alleged) retaliatory action. (The retaliation always occurs sometime after the whistleblowing itself.) So, if an employee reports corruption, and six months later she is fired, she only gets the benefit (such as it is) of the burden-shifting rule if she files her suit within six months.

In order to promote more effective protection of whistleblowers, the Israeli Parliament should further amend the PoWL to address these deficiencies. Several Israeli lawmakers have pushed for such changes. For example, multiple bills have been proposed that would address the statute of limitations problem (see here, here, and here), either by extending the limitations period or by stopping the clock when a complaint regarding the same incident is pending before the State Ombudsman. Other proposed bills (see, for example, here and here) would amend the PoWL’s burden-shifting provisions, allowing the plaintiff to get the benefit of the burden shift by establishing that the employer knew about the whistleblowing and that the allegedly retaliatory action was close in time to it. While these past attempts at legislative reform have not succeeded, the reformers should keep pushing on these issues. Without genuinely effective anti-retaliation protections, many potential whistleblowers will choose not to come forward, allowing corruption to continue unchecked.

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