In a jury verdict issued on March 26, 2015, a supervisor for the nation’s largest ferry system was awarded $1 million because the jury concluded that his employer demoted him as an act of retaliation in violation of the Washington State Employee Whistleblower Protection Act because he was believed—albeit inaccurately—to be a whistleblower. Chaussee v. State of Washington, Wash. Super. Ct., No. 11-2-01884-6, 3/26/15. Continue Reading
The Government Accountability Project (GAP) and Zuckerman Law recently petitioned the U.S. Department of Labor (“DOL”) to issue rules and guidance prohibiting “de facto” gag clauses in settlement and severance agreements that dissuade whistleblowers from engaging in protected activities. Continue Reading
On April 1, the Securities and Exchange Commission (SEC) announced its first settlement of an enforcement action under the SEC’s Rule 21F-17, which prohibits any person from taking “any action to impede an individual from communicating directly with the Commission staff about a possible securities law violation, including enforcing, or threatening to enforce, a confidentiality agreement … with respect to such communications.” The SEC’s announcement comes on the heels of prior comments by Sean McKessy, Chief of the SEC’s Office of the Whistleblower, cautioning both in-house and outside counsel who draft confidentiality agreements and company policies that the SEC will actively pursue remedies against companies and attorneys who promulgate or draft policies that the SEC might view as chilling employees’ abilities to communicate with the SEC about potential securities-law violations. Continue Reading
Yesterday, the Office of the Inspector General for the U.S. Department of State (OIG) issued a report on its review of the use of confidentiality agreements and policies by Department of State contractors. In preparing the report, OIG sent a five-question survey to the 30 contractors with the largest Department of State contracts in 2012. Each company responded and provided various company policies and handbooks. The report concluded that all respondents had some form of a confidentiality agreement and that none of them were overly restrictive.
The report did note, however, concerns about two types of provisions. First, the report notes that several contractors had provisions requiring employees to notify company officials if they are contacted by a government auditor. In addition, some contractors had a non-disparagement agreement or policy. The report noted that these provisions “may have a legitimate justification,” but may also “still have a chilling effect on employees who wish to report fraud, waste, or abuse to a Federal official.”
The report encouraged companies to adopt best practices for encouraging the reporting of suspected wrongdoing by employees, including establishing a hotline for complaints, displaying hotline posters in the workplace, encouraging the reporting of potential fraud and abuse, and cooperating with government audits and investigations. Contractors should review their policies and procedures to verify that these types of provisions are in place and being communicated to employees and managers.
Please join us for a webinar with heads of the SEC and OSHA whistleblower programs and a prominent plaintiff-side whistleblower attorney, titled: Whistleblower Reward and Retaliation Claims: Current Developments.
Register here: REGISTER
Our distinguished panel will include:
Sean X. McKessy – Chief, Securities and Exchange Commission Office of the Whistleblower
Anthony Rosa – Department of Labor, Occupational Safety & Health Administration, Assistant Regional Administrator for OSHA Whistleblower Protection Programs
Steven J. Pearlman – Partner and Co-Head of Proskauer’s Whistleblowing & Retaliation Group
Jason Zuckerman – Partner, Zuckerman Law Continue Reading
The Second Circuit Court of Appeals recently deferred to the SEC’s determination that a tipster who provided information to the Commission before July 21, 2010, the effective date of the Dodd-Frank Act, is not eligible to receive a whistleblower bounty payment. Stryker v. SEC, Case No. 13-4404-ag (2d Cir. Mar. 11, 2015). Continue Reading
On March 5, 2015, OSHA issued a long-awaited Final Rule regarding SOX whistleblower procedures and related matters. The new Final Rule will replace the Interim Final Rule enacted in 2011, after Dodd-Frank amended SOX. The Final Rule largely follows the Interim Final Rule, even though commenters expressed a range of serious concerns. One key revision that was implemented in the Final Rule based on response from commenters was a procedure requiring each party’s filings to be shared with the other party. Continue Reading
NY Attorney General Eric Schneiderman recently announced his plans to propose legislation that would create a whistleblower incentive program at the state level. The proposal, titled the Financial Frauds Whistleblower Act, would provide monetary awards to eligible individuals who report original information about illegal activity in the banking, insurance, and financial services industries. The Financial Frauds Whistleblower Act also would enhance anti-retaliation protection for employees who report suspicious or illegal activity. Additionally, the proposal provides for confidentiality for whistleblowers. Continue Reading
On March 2, 2015, the SEC announced an expected award of $475,000 to $575,000 to a former company officer “who reported original, high-quality information about a securities fraud that resulted in an SEC enforcement action with sanctions exceeding $1 million.” The officer reported information to the SEC more than 120 days after other responsible compliance personnel at the company in possession of the information purportedly failed to adequately address the issue. This is the first of its kind under the SEC’s whistleblower program, and the first award announced this year. Continue Reading
As Rachel Louise Ensign reported earlier this week in the Wall Street Journal (subscription required), the Securities Exchange Commission (“SEC”) continues to probe obstacles to corporate employees blowing the whistle. This time, according to Ms. Ensign, the agency has requested that companies “turn over every nondisclosure agreement, confidentiality agreement, severance agreement, and settlement agreement they entered into with employees since Dodd-Frank went into effect, as well as documents related to corporate training on confidentiality.” Continue Reading