The SEC Doesn’t Like Your Employment Agreements
Evan Gibbs’ bi-weekly Above the Law column was published on April 3. The article recapped several notable Securities and Exchange Commission (SEC) administrative orders imposing significant monetary penalties on companies across the U.S. for having provisions in their severance and other employee agreements restricting employees’ ability to cooperate with the SEC and/or receive whistleblower incentive payments from the SEC. Evan explains that, although the SEC is not a labor and employment agency, the Dodd-Frank Wall Street Reform Act amended the Securities Exchange Act of 1934 to encourage and protect whistleblowers and to prevent companies from “imped[ing] an individual from communicating directly with the [SEC’s] staff about a possible securities law violation...” Given this, Evan encourages companies to review their employee agreements to ensure they do not run afoul of the SEC.