Feds: Stop Blocking Whistleblowers from Blowing the Whistle

Federal agencies are speaking out against contractual provisions that apparently bar employees from reporting information about their companies to the government. The agencies are concerned that companies’ agreements with their employees contain provisions that might prevent information gained during litigation from being shared with the federal government.[1] The agencies’ position is that confidentiality or “gag”-type clauses in confidentiality agreements, protective orders, or settlement agreements that prevent whistleblowing or other federal reporting violate, among other laws, the Federal Rules of Civil Procedure and public policy. They want to ensure that employees can report, e.g. securities violations, motor vehicle safety information,[2] or information regarding employment investigations.

While the agencies may have a point that entering into agreements that explicitly prohibit compliance with federal law could be an issue, it is very unlikely that the contracts would actually override federal reporting laws. Instead, such agreements “chill” the speech of employees who might otherwise be whistleblowers or reporters. To avoid such accusations, companies might try either avoiding language that could be construed to block reporting, or in addition to confidentiality clauses, plainly stating in agreements that they do not prohibit reporting under applicable federal laws.

— By Julia Damron, Esq., Barnes Law

Julia Damron is an associate attorney with Barnes Law, licensed to practice law in California.

The opinions expressed are those of the author and do not necessarily reflect the views of the firm, its clients, or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

[1] Sullivan, Casey C., “The Federal Gov't Disapproves of Your Confidentiality Provisions”, April 8, 2016, http://blogs.findlaw.com/in_house/2016/04/the-federal-govt-disapproves-of-your-confidentiality-provisions.html.

[2] “NHTSA Enforcement Guidance Bulletin 2015-01: Recommended Best Practices for Protective Orders and Settlement Agreements in Civil Litigation”, Federal Register, March 11, 2016, https://www.federalregister.gov/articles/2016/03/11/2016-05522/nhtsa-enforcement-guidance-bulletin-2015-01-recommended-best-practices-for-protective-orders-and.