LANDMARK LAWSUIT FILED AGAINST SEC TO PROTECT ALL WHISTLEBLOWERS

Employer Scare Tactics May Chill SEC Whistleblower Program

But an issue has emerged that could stanch the flow of tips. Despite an anti-retaliation provision in the Dodd-Frank Act, the law that created the whistleblower office, some plaintiffs attorneys complain that companies are using language in severance, confidentiality and other employment agreements that threatens employees with termination if they communicate directly with the SEC.

If the SEC discovers that a company violated securities laws and later learns that the firm used such tactics, it may need to send a message by launching an enforcement action, attorneys say.

“I wouldn’t want to be that company. They’re likely to pay a very heavy price,” said Jordan Thomas, who chairs [prior firm][‘s] whistleblower practice and previously served in a leadership role for the SEC in developing the whistleblower program.

The SEC may also be wise to inform corporations about what kinds of language can and cannot be used in employment agreements, Thomas said.

“It’s not black and white. There are gray areas,” he said. “There is a genuine need and desire by responsible organizations for guidance.”

Named one of the top whistleblower practices/attorneys in the country by The New York Times, Wall Street Journal, NPR and The New Yorker
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