In light of recent enforcement and recovery trends, many employers are concerned about the federal government’s increasing focus on whistleblower reports of misconduct and improprieties, especially with respect to financial dealings and the corporate fraud arena. Rightfully so.
In response, some employers have attempted to artfully avoid whistleblower reports through the use of nondisclosure agreements. As Law360 reports, however, use of nondisclosure agreements by public companies “to subvert whistleblowing rules” may be the focus of SEC scrutiny. http://www.law360.com/articles/591001/house-dems-urge-sec-to-target-anti-whistleblower-pacts
These developments should concern public and private companies alike. Not only must they confront the underlying issues raised by whistleblowers, but they must steel themselves for acute scrutiny as to how they deal with the whistleblower (retaliation and nondisclosure focus).