The Tokyo High Court on Aug. 31 reversed a lower court ruling and ordered Olympus Corp. to pay ¥2.2 million in damages to a 50-year-old employee who argued that the firm transferred him to different sections three times in retaliation for blowing the whistle on his boss. The firm appealed the ruling to the Supreme Court on Sept. 9.

In June 2007, the employee told the firm’s compliance section that his boss was trying to hire a worker away from a firm with which Olympus has business relations. He feared that this would lead Olympus to lose the other firm’s trust in it. Despite the obligation to keep acts of whistleblowing secret, the section e-mailed the employee’s name and report to his boss and the personnel affairs section. Four months after the whistleblowing, the employee, a sales expert, was transferred to a research section and later to other sections apparently in a show of corporate displeasure.

The whistleblower protection law came into force in April 2006, following a series of scandals such as food mislabeling and coverups of nuclear power plant problems. Although it prohibits firms from giving whistleblowers unfair treatment such as dismissal or demotion, it does not impose any penalties on firms that treat them unfairly. Therefore those who seek redress have no choice but to file a lawsuit.

In the trial, the employee called on Olympus to pay him ¥10 million in damages. But the Tokyo District Court ruled that the transfers were not for retaliating against him. The Tokyo High Court closely examined the case and ruled that it is reasonable to think that the transfers were designed to isolate the employee and make him feel helpless. The high court said that after the transfer, the company forced the same education as for newcomers on the employee, gave him a goal extremely hard to achieve, deprived him of promotion or wage raises and caused him psychological pains.

The ruling is believed to be the first which has determined that transfers after whistleblowing were illegal. But the case shows that the whistleblower law is useless in protecting whistleblowers. Its provision that a whistleblower can contact mass media only when it is reasonably clear that contacting a compliance section will lead to destruction of evidence is too strict. The Diet should revise the law to strengthen the protection and redress of a whistleblower.

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