TOKYO - Whistleblowers who expose suspected wrongdoing at companies and other organizations in Japan are increasingly finding themselves targeted by multimillion-yen damages claims, raising questions over whether the country's legal system adequately protects people who report misconduct.
Those facing lawsuits say the claims are intended as retaliation or an attempt to silence them. Cases involving demands exceeding 20 million yen and approaching 50 million yen have imposed severe financial and psychological burdens, even though Japan's Whistleblower Protection Act is intended to protect people who disclose wrongdoing in the public interest.
One case involves the operator of Momuri, a resignation agency that attracted widespread attention for helping workers leave their jobs. Investigators searched the company's offices after allegations that it had violated the Attorneys Act, with information from former employees among the factors that brought the case to light.
Former company president Shinji Tanimoto has been charged with violating the Attorneys Act and admitted the charge in court, saying he deeply regretted engaging in such conduct in a high-profile business providing resignation services.
At the same time, however, litigation has been proceeding against people involved in exposing misconduct at the company.
Nozomi Fukuda, 25, worked for the Momuri operating company for eight months last year. She said that while she was employed there, she was instructed to refer clients to lawyers and was told that the company would receive 16,500 yen for each referral.
According to Fukuda, she was also warned not to tell anyone outside the company because the arrangement was illegal.
Resignation agencies notify employers on behalf of clients that they intend to quit. Momuri's operator referred clients seeking to resign to affiliated lawyers and allegedly received compensation for those referrals.
Japanese law prohibits people without attorney qualifications from referring legal business to lawyers for profit.
Fukuda said the company had made such referrals part of its business despite knowing the practice was prohibited. Recorded discussions showed questions being raised about whether the company could receive around 30% of fees, while a lawyer explained that paying a referral fee was prohibited under the Attorneys Act but suggested compensation equivalent to that amount could potentially be provided under another name.
After confirming that payments had actually been made, Fukuda concluded that illegal conduct was occurring. She resigned four months later and reported the matter to organizations including a bar association.
Another former employee who joined Fukuda in making disclosures also posted online about alleged illegal conduct and suspected harassment within the company.
The company subsequently announced that it would sue three people. About two months later, Fukuda received court documents.
The Momuri operating company and Tanimoto alleged that online statements concerning harassment were false and sought 22 million yen in damages. Their lawsuit did not address the allegations concerning violations of the Attorneys Act.
Fukuda said the litigation transformed her life. While raising a child, she had to devote time to gathering evidence and dealing with the lawsuit, cutting into time with her family.
The pressure eventually became so severe that she suffered a cerebral infarction. She also found it increasingly difficult to manage family life and later divorced her husband.
The effects of her illness continue, while the lawsuit with the company remains unresolved.
Asked whether she would have taken part in the whistleblowing had she known how much time and money the litigation would consume, Fukuda said she was no longer certain.
"When I think about my child and my life, I might not have participated," she said.
Asked about the purpose of the lawsuit, the Momuri operating company said it would refrain from commenting because the matter was being contested in court.
A request for an interview with Tanimoto was made through a relative and his attorney earlier in August, but no response had been received.
Japan's Whistleblower Protection Act was enacted in 2004 to protect people who report organizational misconduct.
The law contains provisions intended to prevent companies from seeking damages simply because a whistleblower made a protected report. However, companies may still bring lawsuits if they cite reasons other than the act of whistleblowing itself.
That has prompted concern over so-called retaliatory lawsuits, in which litigation may be brought primarily to silence or pressure people rather than to establish the truth of a dispute.
Calls have been made for stronger legal restrictions, but the government has pointed to a constitutional dilemma. Freedom of speech and expression supports the protection of whistleblowers, while the Constitution also guarantees access to the courts.
Because the right to bring a lawsuit is itself constitutionally protected, restricting litigation even when it appears retaliatory requires careful consideration.
The issue remains unresolved, leaving lawmakers to consider how far legal safeguards should extend.
Critics argue that companies can absorb the cost of filing lawsuits seeking tens of millions of yen in damages far more easily than individual defendants. If litigation succeeds in silencing a whistleblower, they say, a company may regard the legal expense as worthwhile.
Another case illustrates the scale of that imbalance.
Yutaka Kato was an accounting manager at medical device maker STAAR Japan when he reported suspected bribery involving the company.
Former executives were later issued summary orders and fined over allegations that 600,000 yen in cash had been given to a hospital doctor in connection with the use of the company's surgical lenses for cataract treatment in 2023.
Kato said he learned about the questionable payments during an internal company meeting.
He raised concerns that the payments could constitute bribery, but said his objections were ignored and that he was excluded from subsequent meetings.
According to police investigation records and other material, the company later provided money to a doctor in return for supplying surgical video footage.
Kato said he decided to make a public-interest disclosure because patients could potentially be affected. In one case, a doctor who received money allegedly used the company's lens even though a different manufacturer's lens had already been implanted in the patient's other eye, creating a difference in color perception.
The company did not sue Kato over the act of whistleblowing itself. Instead, it sought approximately 50 million yen in damages over his removal of company data used to support the disclosure.
Because legal fees rise with the amount being claimed, Kato said his litigation costs have reached around 10 million yen, some of which he has still been unable to pay.
After about 18 months of proceedings, a court ruled that his removal of the information had been conducted for the purpose of making a public-interest disclosure and rejected the company's damages claim.
About a week after the ruling, however, the company appealed.
Kato's legal team has argued that the appeal makes clear the case is intended as harassment or retaliation against the company whistleblower.
The dispute has now continued for about two years.
Asked why it appealed, STAAR Japan said through its attorney that it would refrain from commenting.
Kato said that even if one damages lawsuit ends, another can follow, leaving him uncertain about where the litigation will ultimately lead.
"When I think about where this ends, either the company disappears or I do," he said.
The cases highlight the disparity between individuals and corporations in their ability to devote money, staff and time to prolonged litigation. Whistleblowers can be forced to spend years defending themselves while their personal lives and finances deteriorate.
Under Japan's current legal framework, preventing the filing of an allegedly retaliatory lawsuit itself remains difficult.
Legal experts say courts could nevertheless do more to reduce the burden on whistleblowers by promptly rejecting cases that lack legitimate grounds or constitute an abuse of the judicial process.
Kato said he hopes Japan becomes a society in which people considering public-interest disclosures can speak out without fearing retaliation.
The cases have exposed what critics describe as a significant gap in Japan's whistleblower protection system: while the law protects the act of reporting wrongdoing, it does not necessarily shield whistleblowers from lengthy and costly litigation brought on other grounds.
Source: YOMIURI
