Five years ago, Congress passed the Dodd-Frank Act, which created a new whistleblower program administered by the Securities and Exchange Commission (SEC) to encourage reporting public companies thought to be violating federal securities law. Recently, the SEC has turned its attention to companies' confidentiality agreements, policies and practices that could discourage whistleblowers from coming forward to report suspicion.
In Financier Worldwide, Mike MacPhail, partner, and Kyle Fogt, associate, warned public companies of the increasing likelihood that their policies and procedures could come under the microscope.
"In light of the SEC's aggressive enforcement of its rule...public companies should carefully review their confidentiality agreements," the article said. "[N]or is the SEC the only U.S. governmental agency looking into this issue; the Equal Employment Opportunity Commission and the National Labour Relations Board both have made similar challenges to 'blanket' employee confidentiality agreements."