Brandon Lauria will speak on SEC enforcement of Rule 21F-17 at a Knowledge Group live webcast on March 9, 2017. Rule 21F-17 prohibits confidentiality agreements and other measures which restrict access to the SEC whistleblower program. The one hour webcast at noon (EST) will cover the rule protecting whistleblower communications with the SEC and recent civil enforcement actions brought by the SEC against corporations for impeding communications with whistleblowers.
A U.S. District Court in the Southern District of California has recently ruled on the validity of a SEC whistleblower’s defense to the enforcement of a company’s confidentiality agreement. In the decision, the Court accepts the validity of a public policy defense to a limited whistleblower disclosure of confidential information concerning securities fraud.
The Department of Energy recently announced in the Federal Register a 60 day stay of its new regulation permitting civil penalties against contractors and subcontractors that retaliate against an employee reporting fraud, waste or abuse. The DOE cited the Chief of Staff’s January 20, 2017 memorandum, which calls for a 60 day delay in the effective date of new regulations so that they can be reviewed by the incoming administration.
Firing whistleblowers for informing the government about corporate activities has been standard practice at many businesses for a long time. That practice may be changing quickly if the government continues to pursue enforcement actions against companies engaged in retaliation and juries continue to provide multi-million dollar verdicts to whistleblowers.
Last week, the Occupational Safety and Health Administration offered a set of recommendations for employers to create retaliation-free workplaces. The guidance is directed at employers with employees covered by the 22 whistleblower protection statutes enforced by OSHA.
The prevalence of retaliation by corporations against whistleblowers has been well documented. Not only does it serve to punish those who come forward, but it has a chilling effect on other employees who might speak out against wrongful conduct. Employees in these companies quickly learn that the policies protecting whistleblowers on paper offer little protection in reality.
A bill sponsored by Senator Claire McCaskill to make permanent a pilot program applying whistleblower protections to contractors, subcontractors, grant recipients, and subgrantees has been passed by the House and Senate. It applies the program’s protection from retaliation to nearly all civilian employees except for the intelligence community.
The U.S. Commodity Futures Trading Commission has published a notice of proposed rulemaking in the Federal Register related to the CFTC whistleblower awards process. The proposed amendments to the regulations on first glance are pro-whistleblower and would be a welcome improvement and clarification to the program’s current regulations.
Whistleblower protection is gaining traction in many nations but “much remains to be done” according to an OECD report published last month titled “Committing to Effective Whistleblower Protection”. For individuals reporting corporate misconduct such as bribery, this is especially true as whistleblower protection in the private sector is still “almost a legal vacuum”.
The Senate Finance Committee approved the Taxpayer Protection Act of 2016 this week, which reforms the Internal Revenue Service’s communications with whistleblowers as well as protects taxpayers from identity theft and tax fraud. The bill will now go before the full Senate for approval.