They really work when they prevent a whistleblower from talking to a lawyer about whether the NDA is enforceable. And the way they work is when they have a potential whistleblower asking if it`s worth speaking out – if, given the cost, it`s worth hiring a lawyer to defend them if the company tries to enforce it – the fact that if it were a case that would be published, they would be removed from their position as whistleblowers and that could have real negative consequences for their work. Federal laws and regulations prohibit restrictive non-disclosure agreements in government contracts and in publicly funded businesses. The Securities and Exchange Commission has issued a rule prohibiting agreements prohibiting the disclosure of an employee to the agency. SEC Rule 21F-17 prohibits measures to enforce or collogate a confidentiality agreement to prevent a person from discussing a possible violation of the Securities Act with the Commission. The only exception is an agreement to protect information that falls within the privilege of counsel. ”These provisions are consistent with the duties, rights or responsibilities of employees created by existing laws or executive orders with respect to (1) classified information, (2) notices to Congress, (3) reporting a violation of any law, rule or regulation, or mismanagement to an inspector general or mismanagement, gross waste of funds, and do not replace, contradict or otherwise modify them. an abuse of power or a significant and specific threat to public health or safety, or (4) other whistleblower protection. The definitions, requirements, obligations, rights, sanctions and responsibilities created by the control decrees and legal provisions are incorporated into this Agreement and exercise control.
In 2017, the Federal Acquisition Regulation (FAR), the main regulation used by agencies to purchase supplies and services through contortional means, was amended to ”prohibit the use of funds used or otherwise made available for a contract with a company that requires employees or contractors to sign an internal confidentiality agreement, that prevents these employees or contractors from legally reporting waste. fraud or abuse” to the competent regulatory authority. A whistleblower lawyer must be consulted to review the contract and determine whether disclosure of the evidence you collect is legally permitted despite the agreement. Under certain laws, such as the False Claims Act, the whistleblower may have to defend against a lawsuit or counterclaim of the company for damages related to the breach of the agreement. The Securities and Exchange Commission recently fined companies for including provisions in singing agreements or employment contracts limiting an employee`s ability to report fraud to the government. And, most importantly, the SEC has fined companies, even though the SEC has admitted that the company never tried to enforce these agreements. In a first case, the court ruled that the relator had not violated the confidentiality agreement by reporting fraud to the government because of the strong political interests underlying the False Claims Act. See United States v. Cancer Treatment Ctrs. Of Am., 350 F.Supp.2d 765, 773 (N.D.
Ill. 2004). Years later, in 2015, precedents were used in the Macktal case in Harry Barko v. KBR, culminating in the SEC`s landmark enforcement action banning non-disclosure agreements in U.S. companies. Hush money payments, such as payments to Joe Macktal for his collaboration, are coercive and illegal agreements aimed at silencing whistleblowers who may have been in emotional and financial distress because they are trying to expose misconduct in their respective businesses or organizations. .