Whistleblowing has recently become a common phenomenon in Korea, especially given the strong statutory protections and incentives for whistleblowers including under the Whistleblower Protection Act. Companies must not only consider the relevant laws when designing their respective whistleblower response policies and procedures, but also consider an additional factor which has become increasingly important in recent years – the proliferation of whistleblower-type reports through anonymous social media apps.
 
Whistleblower Protection Act
 
A key aspect of Korean whistleblower protection laws is the prohibition against retaliation. More specifically, there are potential criminal penalties when a company or individual imposes a “disadvantage” on a whistleblower in connection with whistleblowing activity. “Disadvantages” are broadly construed, and there is a general presumption that any such disadvantage imposed within two years of a whistleblower report is connected to the report, unless the company/individual can prove otherwise.
 
Korean whistleblower protection laws also require companies to take measures in response to receiving a whistleblower report, such as ensuring the confidentiality of the report and the whistleblower. Moreover, in certain circumstances, there is a de facto obligation to investigate (e.g., where the company is obligated to take measures against a perpetrator if the claims are confirmed), as in the case of workplace harassment.
 
These statutory requirements do not extend to anonymous reports, so companies often disregard claims made through anonymous means.
 
Anonymous Apps
 
In recent years, there has been a proliferation of so-called “Anonymous Apps,” which include job recruiting related sites and sites enabling anonymous communication among employees within a given workplace. An example of an Anonymous App is Blind, which is an app where “verified employees” can anonymously discuss issues. Individuals sign up by using their work email address to verify their place of employment, but then such information is encrypted and separated from the relevant Blind account to prevent tracing of user activity.
 
Blind’s credibility (with verified employees) combined with true anonymity has created the ideal environment for employees to have unfiltered discussions about their company, and the media often view it as a credible source. Blind’s reputation has grown further in the wake of notable controversies and scandals involving company executives. For example, details of the infamous “nut rage” incident in 2014, where the then-vice president of Korean Air ordered the return of an aircraft to its gate in order to dismiss an employee who “incorrectly” served her nuts, initially appeared on Blind, which the media then picked up. This incident not only led to numerous investigations and lawsuits, but also caused significant reputational damage to the company. Anonymous Apps have also been used to report incidents of sexual misconduct as part of the #MeToo movement; workplace harassment leading to the suicide of an employee; and presence of a toxic substance in a product, requiring it to be recalled.
 
Appropriate Response by Companies
 
Under Korean laws, there is no legal obligation for companies to monitor or investigate anonymous complaints. At the same time, the proliferation of Anonymous Apps and dissemination of information about the company through Anonymous Apps have led companies to consider pre-emptive monitoring of Anonymous Apps, which could alert the company to major issues and allow it to create a response strategy to alleviate legal consequences and reduce reputational damage. However, whether to engage in such activity and how to do so still remain subject to controversy.
 
Another developing area in relation to Anonymous Apps is the process by which anonymous posts can form the basis of non-anonymous reports that trigger whistleblower protection obligations on the part of the company.
 
Reports on these Anonymous Apps give rise to other novel issues for company management, including whether and how the company should respond to unfounded or malicious allegations (including possibly through a defamation claim), whether the company should take actions to confirm the identity of the person posting relevant information, and whether the company should commence an investigation. Some companies have adopted active policies and procedures to prevent employees from using Anonymous Apps in relation to their workplace, while others have had their human resources or public relations employees regularly monitor posts on Anonymous Apps.
 
Companies doing business in Korea should be aware of the prevalence and implications of Anonymous Apps, recognize the interaction between reports under these apps and whistleblower protection obligations, and prepare accordingly, as part of their overall whistleblower response policies and procedures.