White Paper

SEC Finds Certain Separation Agreement Provisions Unlawful Under Dodd-Frank Whistleblower Rule

 
“Twice in the past two weeks, the Securities and Exchange Commission (“SEC” or “Commission”) issued a cease-and-desist order settling proceedings against companies for using confidentiality and waiver of claims provisions in employee separation or severance agreements that violate an SEC rule promulgated after passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). The rule in question is designed to encourage and allow whistleblowers to freely disclose information to the SEC without impediments and ensure that they are (and remain) entitled to collect monetary incentive awards if the Commission determines that they are eligible for such awards. In both cases, the companies were required, as part of the settlement of claims without admission of liability, to take affirmative remedial actions and pay fines of hundreds of thousands of dollars as the result of fairly typical language in their separation agreements. In addition, the SEC has signaled that not only will it take action in response to separation agreements that may limit an employee’s ability to communicate with the SEC, but also it will oppose attempts by employers to limit an employee’s right to receive whistleblower incentive awards.”

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John F. Fullerton III is a member of Epstein Becker & Green, P.C. and co-leads the financial services strategic industry group. His practice focuses on representing employers in whistle-blower compliance and litigation defense in retaliation cases brought pursuant to the Sarbanes-Oxley Act, Dodd-Frank Act, the False Claims Act, as well as state law whistle-blower statutes.

Faculty

John F. Fullerton, III

John F. Fullerton, III

Epstein Becker & Green, P.C.

Agenda

Faculty

John F. Fullerton, III

John F. Fullerton, III

Epstein Becker & Green, P.C.

  • Member of Epstein Becker & Green, P.C. and co-leads the financial services strategic industry group
  • Practice focuses on representing employers in whistle-blower compliance and litigation defense in retaliation cases brought pursuant to the Sarbanes-Oxley Act, Dodd-Frank Act, the False Claims Act, as well as state law whistle-blower statutes
  • Adjunct professor of law at Pace University School of Law
  • Frequent speaker and has written numerous publications
  • J.D. degree, New York University School of Law; B.A. degree, magna cum laude, Brown University
  • Can be contacted at 212-351-4580 or [email protected]

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