The Securities and Exchange Commission’s enforcement case against BlueLinx Holdings Inc. is an important reminder that companies should review their employment documents.
The Atlanta-based building products distributor Aug. 10 agreed to pay $265,000 to settle allegations that its severance agreements violated the agency’s whistle-blower protection rules.
Under the SEC’s whistle-blower reward program, companies can’t take any action to “impede” their employees from contacting the commission about possible securities violations. This includes “enforcing, or threatening to enforce” confidentiality agreements that may stop workers from approaching the agency.
According to the SEC, BlueLinx’s severance agreement asked workers to waive their rights to possible whistle-blower awards or lose post-employment benefits. Since at least 2011, about 178 BlueLinx employees signed the agreement, the SEC said.
SEC officials have long stressed that they’re on the lookout for company internal documents that violate whistle-blower protections. The SEC’s first anti-retaliation case involving corporate documents was against KBR Inc. In April 2015, the defense contractor was fined $130,000 for asking employees who internally reported potential problems to sign a confidentiality agreement. The agreement barred the workers from “discussing any particulars” about subsequent internal investigations taken by the company in connection with their complaints.
In addition to severance agreements, companies also should review their settlement agreements, executive agreements, intellectual property agreements, compliance policies, conflict-of-interest disclosure forms and affirmations, and even employee handbooks and codes of conduct.
In particular, companies should watch out for language that may limit workers’ ability to:
Companies also should be wary if their internal documents require employees to certify that they:
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)