The SEC recently announced it had charged seven companies with violating ’34 Act Rule 21F-17(a) by using employment and separation agreements to impede potential whistleblowers from reporting misconduct to the SEC.

Here are four bullets about this sweep – and the “bottom line” about what you need to do now:

1. This is not new – The SEC has periodically taken actions against companies for impeding employees from whistleblowing since 2017.
2. Look at the line of cases – The facts of the now numerous cases the SEC has brought are instructive in knowing what not to do.
3. Not obvious – Sometimes it might not be so obvious that your employment and separation agreements contain problematic provisions. For example, you might have a document that doesn’t contain a prohibition on reporting to the government – but providing notice to the employer that you’re going to communicate with an agency could be considered an impediment. Or you may have a clause about government reporting in one section that could contradict another section that may be viewed as an impediment.
4. A new wrinkle? – Cooley partner Brad Goldberg notes that what’s different about this new sweep is that all of these companies required employees to waive their right to possible whistleblower monetary awards – so they may not have directly impeded the actual reporting, but they were arguably indirectly impeding by having them waive the right to the award.

Bottom Line: If you haven’t battle-tested your employment and...

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