SEC Sues Over Employee Confidentiality Agreements

By Martha J. Zackin

Early in March, the Wall Street Journal reported that the Securities and Exchange Commission had begun to probe “whether companies are muzzling corporate whistleblowers” through the use of confidentiality agreements that may impede employees from disclosing corporate wrongdoing.  As reported, the SEC sent letters to a number of companies asking them to turn over “every nondisclosure agreement, confidentiality agreement, severance agreement and settlement agreement they entered into with employees since Dodd-Frank went into effect, as well as documents related to corporate training on confidentiality…”  The agency “also asked for ‘all documents that refer or relate to whistleblowing’ and a list of terminated employees.”

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