The whole point of ethics is to report ‘I think we broke the law’ or ‘I think we violated this contract.’ to your manager (maybe more, depending on the case) and for your own good (protection from prosecution) you should leave papertrails (emails for instance) that you did so.
How is it acceptable for a company to encourage employees to hide bad (or illegal) behavior ?
I think it's more people speculating about another team or project.
For example "I bet we'll get boatloads of patent disputes from Samsung if we get the next Nexus phone made by LG", said by someone on the Google search team who is just speculating based on public news reports.
Later in court, Samsung could use that as evidence that someone in the company had knowledge of violating patents (which increases damages 3x).
For a more concrete example, a Google engineer said that they should license Java for Android in an email (without having any sort of legal background on whether it was necessary), and this got dragged into court as evidence in the Oracle API copyright case.
Typically, the advice given in such contexts is to disclose concerns to your lawyer in the context of seeking legal advice. In the US (though this differs in some other countries) this makes it "attorney-client privileged" and thus protected from most kinds of legal discovery.
So the company is not saying, "Don't raise concerns about illegality." They're saying, "Don't raise them to your manager, but instead to the legal team."
Large companies tend to set up internal processes for such complaints to ensure that they go to the right people (i.e. your manager is probably not the right person anyway) and that they remain legally privileged when possible.
Based on the news reports (and not the content of the suit), it seems to me the filer is not aware of what is common (and frankly not worrisome) behavior at large companies. People get fired for leaking product details; legal discussions should happen with lawyers; companies commonly have contracts prohibiting discussion of wages but those contracts are usually unenforceable because in the US labor relations regulations actually protect such actions from retribution.
If an employee sees a violation of criminal law, does reporting it to his supervisor discharge any additional legal obligation to report it to law enforcement?
There is generally no legal obligation to report a violation of criminal law in most US jurisdictions. There are generally special cases for things like teachers and doctors to report child abuse, for example, but I can't think of any reason an employee would be legally obligated to report an employer's criminal activity.
How is it acceptable for a company to encourage employees to hide bad (or illegal) behavior ?