SEC Continues to Target Employer Agreements Restricting Whistleblower Rights

October 06, 2016

The U.S. Securities and Exchange Commission (SEC) recently announced the settlement of two cease-and-desist proceedings against employers alleged to have unlawfully restricted employees’ rights to engage in protected whistleblowing activity. According to the SEC, the two companies, BlueLinx Holdings, Inc. (BlueLinx) and Health Net, Inc. (Health Net), violated SEC Rule 21F-17 by utilizing severance agreements that required employees to waive their rights to receive incentive awards for providing information to the SEC. BlueLinx also violated Rule 21F-17, the SEC asserted, by requiring that employees provide notice to the company’s legal department before providing confidential information to the government.

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