Whistleblower Protection Laws

December 20, 2016

Oklahoma-based oil-and-gas company SandRidge Energy Inc. will pay a $1.4 million penalty, subject to the company’s bankruptcy plan, to settle charges that it used illegal separation agreements and retaliated against a whistleblower who expressed concerns internally about how its reserves were being calculated.  The SEC’s order found that SandRidge regularly used restrictive language in its separation agreements that purported to prohibit outgoing employees from participating in any government investigation or disclosing information potentially harmful or embarrassing to the company.  The SEC’s order further found that SandRidge fired an internal whistleblower who kept raising concerns about the process used by SandRidge to calculate its publicly reported oil-and-gas reserves.  SEC

December 19, 2016

Virginia-based technology company NeuStar Inc. will pay $180,000 to settle charges involving its severance agreements that impeded at least one former employee from communicating with the SEC.  The SEC’s order found that NeuStar violated a whistleblower protection rule by routinely entering into severance agreements that contained a broad non-disparagement clause forbidding former employees from engaging with the SEC.  Former employees could be compelled to forfeit all but $100 of their severance pay for breaching the clause.  The severance agreements were used with at least 246 departing employees between 2011 and 2015.  NeuStar voluntarily revised its severance agreements promptly after the SEC began investigating and agreed to make reasonable efforts to inform those who signed the severance agreements that NeuStar does not prohibit former employees from communicating any concerns about potential violations of law or regulation to the SEC.  SEC