Some top US technology companies are forcing workers to sign allegedly illegal labor agreements, according to complaints filed with the Securities and Exchange Commission, despite years of enforcement by the agency against the practice.
Firms, including an Apple Inc. subcontractor, Electronic Arts Inc. and Block Inc. improperly used non-disclosure agreements that prohibit workers from reporting bad behavior to the SEC, according to tipster complaints viewed by Bloomberg News that were filed with the agency by law firm Kohn, Kohn & Colapinto LLP. The contracts, which ban employees from sharing confidential information with any outsider, don’t include an exception for alerting regulators.
The claims were made as the SEC, under Gary Gensler, has stepped up enforcement of an agency rule stemming from the Dodd-Frank financial reform law. Under that rule, companies are explicitly prohibited from obstructing anyone from whistleblowing to the SEC. Enforcing the regulation is a top priority for Gurbir Grewal, the SEC’s enforcement director, according to a person familiar with his thinking who asked not to be identified discussing internal agency policy.
A Block spokesperson said the company’s Code of Business Conduct and Ethics affords all employees protection to communicate with government agencies. That policy is different from an employment contract, which legal experts said should include carve-outs for reporting wrongdoing to regulators. An Electronic Arts spokesperson...
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