Whistleblower Protection Laws

January 17, 2017

New York-based asset manager BlackRock Inc. will pay a $340,000 penalty to settle charges that it improperly used separation agreements in which exiting employees were forced to waive their ability to obtain whistleblower awards.  According to the SEC’s order, more than 1,000 departing BlackRock employees signed separation agreements containing violative language stating that they “waive any right to recovery of incentives for reporting of misconduct.”  BlackRock added the waiver provision in October 2011 after the SEC adopted its whistleblower program rules, and the firm continued using it in separation agreements until March 2016.  SEC

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