Japanese whistle-blower wins damages in high court

TOKYO — The still fledgling protection for whistle-blowers in Japan received a boost Wednesday by a high court that reversed an earlier decision and awarded damages to a worker who suffered retaliation through a transfer.

The Tokyo High Court ordered Japanese camera and precision-equipment maker Olympus Corp. to pay 2.2 million yen ($29,000) to Masaharu Hamada for transferring him from a sales division where he had a strong work record to a more solitary assignment.

Hamada sued Olympus in 2008, demanding 10 million yen ($130,000) in damages, saying the transfer was punishment for relaying a supplier’s complaint that employees with technological expertise were being lured away by Olympus. According to reports, Hamada first relayed the complaint to his boss, then to the company’s compliance unit.

“I thought I did the right thing for my company and for society. Something is wrong when an honest person loses out,” the 50-year-old Hamada was quoted saying by the Asahi newspaper after his victory.

Olympus said in a statement the ruling was “regrettable” and it was still considering whether it will appeal to the Supreme Court.

Japan is a conformist society that tends to respect the power of companies and demand unquestioning loyalty. A law to protect whistle-blowers was enacted only in 2006. But critics say it is still inadequate since it does not penalize companies that punish employees who report bad company conduct or actions.

Whistle-blowers still need to file lawsuits if they wish to win damages or draw attention.

Last year, the Tokyo District Court ruled against Hamada, saying a company had the right to dole out assignments. The latest ruling reversed the earlier finding and said the company had violated its own internal laws by not protecting Hamada.

Numerous corporate scandals have been brought to light by whistle-blowers — a systematic cover-up of defects at Mitsubishi Motors Corp., illicit pocketing of government subsidies at Snow Brand Foods, and nuclear plant defects at Tokyo Electric Power Co., the utility behind the nuclear disaster in northeastern Japan.

“Whistle-blowers are still seen in Japan as traitors who go against the system,” said Hiroaki Kushioka, who exposed price-rigging at his trucking company 30 years ago, and was confined for years to a closet-like office, denied promotion and pressured to quit. He sued for damages in 2002, and won a landmark victory in 2005.

“In Japan, it is all about the sake of the team, and not about the individual at all,” he said.