The Wall Street Journal reported Thursday that the SEC is in the midst of a sweep to crack down on companies’ use of NDAs or employment agreements that might impede whistleblower reporting in violation of Dodd-Frank amendments. Wall St. J. at C1 (Feb. 26, 2015).

We reported last November on a letter from eight House Democrats asking the SEC to examine the issue, here. SEC Chair White’s January 5 response is here.

SEC Rules prohibit using agreements to restrict or prevent whistleblower reporting. 17 C.F.R. § 240.21F-17(a). And the SEC’s broadened administrative jurisdiction now gives it the ability to reach beyond public-companies and registrants. Relatedly, FINRA required its member broker-dealers to include “whistleblower” clause in all settlement and confidentiality agreements.’

Separately, NY Attorney General Schneiderman announced this week legislation to create the State’s own whistleblower program. The “Financial Frauds Whistleblower Act” would award 10-30% of financial-services fraud sanctions of $1 million and over. The proposed Act also would guarantee whistleblower confidentiality and prohibit retaliation. It is being touted as even stronger than federal standards.

Employers should review their employee confidentiality provisions (in any form, including policy manuals and severance agreements) for a “tune up” to ensure they comply.