On September 27, 2016, Proskauer Partner Steven J. Pearlman, co-head of the Whistleblowing & Retaliation Practice Group, participated in a Bloomberg webinar with Jane Norberg, Acting Chief of the SEC Office of the Whistleblower, MaryAnn Garrahan, Director of OSHA’s Whistleblower Protection Program, and plaintiff-side practitioner, Jason Zuckerman. The participants discussed: the SEC Whistleblower Reward Program; OSHA’s Whistleblower Protection Program; confidentiality and other limitations in severance and settlement agreements; protected disclosures under SOX and Dodd-Frank; best practices for addressing internal disclosures and the impact of the whistleblower provision of the Defend Trade Secrets Act.
Ms. Norberg emphasized that the SEC Office of the Whistleblower has increased its focus on reviewing confidentiality language in severance and settlement agreements to assess whether provisions in those agreements could be construed as impeding an employee from voluntarily disclosing information to the SEC. Characterizing the issue as a “hot topic,” Ms. Norberg noted that such conduct—which the SEC views as running afoul of Rule 21F-17(a) of the Exchange Act—has resulted in multiple SEC enforcement actions, including two within the last month.
In the same vein, Ms. Garrahan emphasized that, when deciding whether to approve settlement agreements reached during OSHA investigations of whistleblower claims, OSHA will not approve agreements if they: contain a provision that restricts the employee’s right to voluntarily provide information to the government; require the employee to notify the employer before voluntarily communicating with the government; require the employee to notify the employer that the employee has previously provided information to the government; or requires a whistleblower to waive his or her right to receive a monetary award from a government-administered whistleblower award program (such as the SEC whistleblower award program) or to pay the employer any portion of such an award.
Mr. Zuckerman discussed the practical implications of the circuit split as to whether Dodd-Frank protects internal complaints and gave insight into his experience in pursuing matters with the SEC Office of the Whistleblower.
In addition to discussing case law developments in the SOX whistleblower arena, Mr. Pearlman explained that, given the SEC’s and OSHA’s recent pronouncements, it was important for companies to undertake a comprehensive review of their existing agreements and revise them to comport with agency recommendations. Mr. Pearlman also provided practical tips for conducting effective internal investigations, and discussed the risk created by the Defend Trade Secrets Act that an employer’s trade secrets and/or confidential information could be disclosed through a FOIA request following an employee’s submission of information to a government agency in furtherance of a whistleblower complaint.
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