Stay up-to-date with the latest developments in securities law through access to both news and all statutes and regulations. Find relevant corporate filings through a searchable EDGAR database. And...
Aug. 10 — Atlanta-based building products distributor BlueLinx Holdings Inc. agreed to pay $265,000 to settle Securities and Exchange Commission allegations that its severance agreements violated whistle-blower protection rules ( In re BlueLinx Holdings Inc., SEC, Admin. Proc. File No. 3-17371, 8/10/16 ).
As part of its settlement, the company, without admitting or denying wrongdoing, agreed to amend its severance agreements. BlueLinx also agreed to contact former employees to notify them that they aren't prohibited from accepting SEC whistle-blower awards.
“The settlement represents another significant step forward in the commission's efforts to protect the rights of individuals to participate freely in the SEC Whistleblower Program,” David Marshall, a partner at Katz, Marshall & Banks LLP, Washington said in a release.
Securities Exchange Act Rule 21F-17, enacted in August 2011, specifically prohibits confidentiality agreements designed to prevent an individual from communicating with the commission about potential securities violations (113 SLD, 6/13/11).
BlueLinx required employees leaving the company to waive their rights to possible whistle-blower awards or lose post-employment benefits, the SEC said. Since at least 2011, approximately 178 BlueLinx employees signed the agreement. BlueLinx also revised its severance agreements on two occasions to include confidentiality provisions and a waiver of monetary recovery from administrative agencies, the SEC said.
“The order the SEC issued today sends a resounding message to employers and their agents nationwide: the Commission will not tolerate employer-imposed agreements that are intended to deter would-be whistle-blowers from reporting securities violations to the SEC, however indirect and however craftily worded,” Marshall said.
In related developments, in 2013, a former BlueLinx compliance official claimed he was fired from BlueLinx for reporting possible corporate misconduct to the SEC. BlueLinx counterclaimed that the plaintiff violated a provision in his separation agreement that waived his rights under Dodd-Frank. The case settled before the U.S. District Court for the Northern District of Georgia could rule.
BlueLinx is represented by Jessica Corley of Alston & Bird LLP, Atlanta, who didn't immediately respond to an e-mailed request for comment.
To contact the reporter on this story: Cameron Finch in Washington at email@example.com.
To contact the editor responsible for this story: Phyllis Diamond at firstname.lastname@example.org.
To view the settlement, visit: https://www.sec.gov/litigation/admin/2016/34-78528.pdf.
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)