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SEC Urged to Restrict Employee Nondisclosure Agreements

A coalition of whistleblower lawyers and government watchdog groups Friday urged the Securities and Exchange Commission to bar companies from using overly restrictive nondisclosure agreements that discourage employees from coming forward with allegations of fraud and abuse.

The coalition of 250 organizations said the rights of employees to report wrongdoing without retaliation are under attack by many U.S. corporations. They urged the SEC, which regulates publicly traded companies, to enhance its rules governing the use of nondisclosure agreements and the scope of protections for whistleblowers.

“Given the troubling statistics on workplace retaliation, there is simply no room for grey areas when it comes to this issue,” whistleblower lawyer Jordan A. Thomas wrote to the SEC. “Even more alarming is the proliferation of private agreements to silence or otherwise limit employees’ rights to act as SEC whistleblowers with all of the incentives and protections Congress provided.”

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