Companies have learned, some the hard way, that even standard confidentiality or separation agreements can violate whistleblower protections if they lack explicit carve-outs for reporting to regulators. Combined with the rise of plaintiff-driven “mootness fee” demands, companies would be wise to ensure that well-intentioned agreements don’t become costly enforcement or litigation triggers. In this week’s blog, my colleague, Lenin Lopez, discusses these risks as well as suggested steps companies can take to limit the risk of their agreements coming back to bite them. —Priya Huskins
Even before a whistleblower claim is made, some companies have learned that well-intentioned agreements, like employment, separation, or commercial agreements, can make them targets of regulator enforcement for discouraging whistleblowing.
Over the years, the US Securities and Exchange Commission (SEC) has been at the forefront of holding companies accountable for maintaining agreements or policies that they view as discouraging whistleblowing. At the same time, a recent expansion by the US Department of Justice (DOJ) of its whistleblower program, combined with plaintiffs’ firm tactics, is creating a multidimensional risk landscape.
This article will explain why companies would be wise to review their agreements, policies, and templates to avoid falling into this whistleblower pitfall. Waiting for a regulator or a demand letter to surface the issue can be costly, as well as an unnecessary...
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