Severance Agreements

News & Analysis as of

Employment Law - August 2016

Arbitrator or Judge? California Supreme Court Weighs in - Why it matters - Yet again, the California Supreme Court considered arbitration in the context of an employment agreement, this time reflecting on whether a...more

The Financial Report, Volume 5, Number 16 (Global)

Discussion and Analysis One of our lead articles discusses a research report indicating that SEC enforcement activity has slowed in 2016. According to the article, the SEC has brought nearly ten percent fewer enforcement...more

Time to Review Your Severance Agreements

In August 2016, the SEC issued cease-and-desist orders against two different companies for using severance agreements which required exiting employees to waive their ability to obtain monetary awards under the SEC’s...more

SEC Cracks Down On Anti-Whistleblower Severance Agreements

The federal Securities and Exchange Commission (SEC) has issued six-figure fines to two different employers in the past several weeks, claiming that each crafted restrictive severance agreements that violated agency rules...more

Agreement Prohibiting Solicitation of Employees by Former Employee may be Unenforceable

A recent decision from the Wisconsin Court of Appeals has raised serious questions regarding non-solicitation agreements that are often included as part of an employment agreement or severance agreement. A non-solicitation...more

Bridging the Week - August 2016 #3

Another Publicly Traded Firm Sanctioned by SEC For Allegedly Undercutting Whistleblower Protections Through Severance Agreements: Health Net, Inc., a formerly publicly traded company whose securities were registered with the...more

Companies Should Revisit Severance and Other Agreements as the SEC Steps Up Enforcement Actions to Protect Whistleblower Rights

In less than one week, the Securities and Exchange Commission (“SEC”) announced enforcement actions against two companies that had required their departing employees to waive their rights to any monetary recovery under the...more

Update: Another SEC Enforcement Action on Whistleblower Waivers and Releases

Summary - Earlier this month, the U.S. Securities and Exchange Commission (SEC) announced its second significant enforcement action against an employer based on confidentiality and release provisions that the SEC asserts...more

SEC Targets Employment Agreements Requiring Waiver of Whistleblower Awards

The SEC’s Office of the Whistleblower continues to examine employee severance, settlement and confidentiality agreements for language that might chill reporting of securities violations to the SEC and other regulators. The...more

Public Companies to Revise Employee Confidentiality and Severance Provisions

The Securities and Exchange Commission (“SEC”) issued two Cease and Desist Orders that dramatically change the landscape for employee contractual confidentiality provisions, as well as for employee waiver and release...more

Standard Severance Agreements May Need to Be Revised

Many employers offer severance agreements to departing employees which, at least in part, are designed to protect the employer from disclosures of confidential information and from any future claims or recovery by the...more

Two New SEC Orders Further Limit Employers' Ability to Secure Employee Releases and the Breadth of Confidentiality Agreements

The Securities and Exchange Commission (SEC) has issued two orders challenging employee confidentiality agreements and indicating that companies must not condition employees’ receipt of severance payments and other...more

The SEC Nixes Contractual Waivers of Whistleblower Recoveries

In April 2015, the SEC announced in a first-of-its-kind enforcement action that certain KBR, Inc. confidentiality agreements violated the whistleblower protections of the Dodd-Frank Act by requiring employees and former...more

Government Set to Overhaul Taxation on Termination Payments

Currently, non-contractual compensation payments made solely on account of termination of an individual’s employment enjoy a favourable tax treatment in two respects – the payment can be made without deduction of income tax...more

SEC Continues To Scrutinize Separation Agreements

On August 16, 2016, the SEC announced that Health Net Inc. (Company) agreed to pay a $340,000 penalty to settle charges that it violated Rule 21F-17 by using severance agreements that allegedly prohibited its employees from...more

Redux - federal agencies attack employment agreements, and what you can do about it: 8 steps to consider

“So we beat on, boats against the current, borne back ceaselessly into the past.” - Reading advance sheets often brings the closing line from The Great Gatsby to mind.  Our alert from April 2015 is being rerun in full...more

SEC Continues to Target Employer Agreements Restricting Whistleblower Rights

The U.S. Securities and Exchange Commission (“SEC” or the “Commission”) recently announced the settlement of two cease-and-desist proceedings against employers alleged to have unlawfully restricted employees’ rights to engage...more

SEC Finds Certain Separation Agreement Provisions Unlawful Under Dodd-Frank Whistleblower Rule

Twice in the past two weeks, the Securities and Exchange Commission (“SEC” or “Commission”) issued a cease-and-desist order settling proceedings against companies for using confidentiality and waiver of claims provisions in...more

SEC Enforcement Actions May Require Changes to Severance Agreements

Public companies should revisit their template severance agreements, in light of two recent orders by the Securities and Exchange Commission (SEC). Standard severance clauses covering (1) confidential information and (2)...more

How Much Is A Whistleblower Waiver Really Worth?

The Securities and Exchange Commission is aggressively interpreting and enforcing its rule against impeding whistleblowers. Rule 21F-17(a) provides...more

SEC Continues Crackdown on Whistleblower Restrictions: Calls Qui Tam Waivers "Targeting"

The SEC announced its second enforcement action in a week against a company using severance or confidentiality agreements requiring employees to waive whistleblower bounties or their right to bring a qui tam action....more

SEC Fines Companies for Anti-Whistleblower Language in Severance Agreements

The Securities and Exchange Commission recently announced the settlement of two proceedings regarding the SEC’s whistleblower protection framework, resulting in over $500,000 in penalties. Both of the companies were charged...more

SEC Settlements Put Severance Agreements Under Increased Scrutiny

The US Securities and Exchange Commission (SEC) recently announced settlements with two companies for using severance agreements that allegedly violated Rule 21F-17. Rule 21F-17 provides that “[n]o person may take any action...more

Public Company Sanctioned by SEC for Including Illegal Anti-Whistleblower Provisions in Severance Agreements

In a speech on April 30, 2015. Securities and Exchange Commission (SEC) Chair Mary Jo White noted that... Please see full Advisory below for more information....more

SEC Files Another Action To Protect Whistleblowers

Undermining the protections of Exchange Act Section 21E which protect whistleblowers was the subject of a recent, settled enforcement action. Now the Commission has brought a similar action, again centered on provisions in...more

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