The Securities and Exchange Commission is enforcing whistleblower protections provided within the Dodd-Frank Wall Street Reform and Consumer Protection Act. It wants employers in Wisconsin and across the country to observe whistleblower protections in its employee contracts and agreements. The commission has requested documents from numerous companies in an effort to identify violations within confidentiality agreements, employment contracts and non-disclosure agreements.
In its case against KBR Inc., the commission issued a cease and desist order about its confidentiality agreements that barred employees from discussing information without permission from KBR attorneys. A threat of dismissal was included in the agreement. KBR settled the issue and revised its wording to state that an employee could report suspected violations of federal law to regulatory agencies.
Paradigm Capital Management, Inc. was the object of another whistleblower retaliation case. The SEC accused the hedge fund company of firing a trader who reported suspicious trading activity to the commission. To settle the charges, Paradigm paid over $2 million in fines. The whistleblower chief for the SEC said that employers should review their existing documents and amend them to comply with whistleblower laws.
Employees also have legal protection from retaliation under the federal False Claims Act. This act specifically addresses situations in which an employee knows or suspects a company of committing fraud against a governmental agency. A person who has suffered employer retaliation for reporting this crime or fears to report because of the threat of retaliation can turn to an attorney for advice. An attorney may be able to inform the employee of legal rights and discuss how to take legal action that may be necessary.
Source: The National Law Review, "SEC Says Employee Confidentiality Agreement Violates Dodd-Frank Whistleblower Provisions," April 3, 2015