Severance Agreements Cannot Interfere with Whistleblower Protections
The Securities and Exchange Commission (“SEC” or the “Commission”) protects whistleblowers through Rule 21F-17, enacted under the Dodd-Frank Wall Street Reform and Consumer Protection Act, which states that “[n]o person may take any action to impede an individual from communicating directly with the Commission staff about a possible securities law violation.”
Prior cases have highlighted that certain language in confidentiality agreements can violate whistleblower protection. This is also an issue with severance agreements governing an employee’s departure. A recent case involving Blue Linx discussed in a related article exemplifies the types of restrictions the SEC has deemed improper with regard to severance agreements and provides SEC approved guidance regarding language that explicitly acknowledges a whistleblower’s rights.
Renee Howdeshell
Renee Howdeshell is a founding member of Fulcrum Inquiry, an accounting, finance and economic consulting firm that performs damage analyses for commercial litigation, forensic accountings, royalty & distribution audits, financial investigations, and business valuations. Ms. Howdeshell holds a degree in Finance and Marketing from the University of Virginia's McIntire School of Commerce and is a Certified Public Accountant (CPA) and a Certified Fraud Examiner (CFE). She has testified as an expert witness in federal court, CA state court and arbitration regarding the results of her work. She can be reached at (213) 787-4112 and her resume is available at www.fulcrum.com.
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