An employee is an agent of his or her employer. An agent is a person engaged to act in the interest of another person, who is known as the principal. Employees are legally agents of their employers. As agents, they are obligated to work as directed, to protect confidential information, and, in general, to act in the principal’s best interest. Although the whistle-blower might appear to be a disloyal agent, the obligations of an agent’s loyalty has limits. Whistle-blowing, therefore, is not incompatible with being a loyal agent. Two limits on the obligation of agents are especially important.
An agent has an obligation to obey only reasonable directives of the principal, and so an agent cannot be required to do anything illegal or immoral.
The obligations of an agent are confined to the needs of the relationship. Thus, an employee is not obligated to do anything that falls outside the scope of his or her employment.
The meaning of loyalty. The law of agency aside, whistle-blowing is not always an act of disloyalty in the ordinary meaning of the word. If loyalty is viewed as a commitment to the true interests or goals of an organization, rather than merely the following of orders, then many whistle-blowers are loyal employees. Sociological studies have shown that whistle-blowers are often loyal employees who choose to expose wrongdoing in the belief that they are doing their job and acting in the best interest of the company. In the book Exit, Voice, and Loyalty, Albert O. Hirschman holds that speaking out (voice) and leaving (exit) are the main options for dissatisfied organization members and that those who exercise the voice option are generally more loyal than those who decide to exit.