Corporations are using overly broad and limiting nondisclosure agreements to prevent employees from reporting wrongdoing or fraud to government officials, according to an investigation published in the Washington Post on Monday.
Lawyers representing whistleblowers say the agreements, being used by defense contractors and hedge funds among other employers, contain language that goes beyond protection of trade secrets.
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“There has been a shift from the traditional, sweeping gag orders to more disingenuous variations of these agreements,” Tom Devine, legal director of the Government Accountability Project, told Washington Post reporters Scott Higham and Kaley Belval. “The techniques are becoming much more sophisticated, but they have the same chilling effect.”
The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, which established the Office of the Whistleblower at the Securities and Exchange Commission, also created a bounty program at the SEC to pay whistleblowers. The Post investigation, however, revealed that some nondisclosure agreements prohibit whistleblowers from reaping such financial rewards for their actions.