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Companies should review employee agreements in accordance with the SEC’s renewed focus on confidentiality provisions that may be considered barriers to notification.

Companies should review employee agreements in accordance with the SEC’s renewed focus on confidentiality provisions that may be considered barriers to notification.

From 2015 to 2017, the US Securities and Exchange Commission (SEC) announced a series of settlements with employers in which the SEC adopted a strict interpretation of whistleblower protection given under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank).1 As discussed in Wilson Sonsini’s September 2016 Client Alert, imposed SEC monetary sanctions on companies for including confidentiality and other provisions in work-related agreements that it claimed discouraged employees from reporting securities law violations to the SEC’s Office of the Whistleblower (and other agencies).

On June 22, 2022, the SEC issued an order In the question of The Brink’s Company, confirms its continued aggressive enforcement stance on alert protection. From 2015 to 2019, The Brink’s Company (Brink) required new US employees to execute a confidentiality agreement during the introduction process. The Confidentiality Agreement prohibits employees from disclosing confidential information to third parties without Brink’s permission, and the defined confidential information to include “financial information … entered in internal records, files and ledgers or incorporated into income statements, financial reports and business plans.”2 It charged $ 75,000 in liquidation damages, along with payment of Brink’s attorney’s fees and expenses, for any employee found to have breached the confidentiality agreement. Brink also included similar prohibitions in the termination or settlement agreements it entered into with its employees, prohibiting employees from “disclosing confidential business information to third parties, unless required by law or legal process or expressly authorized by Brinks to do so.”3

The SEC ruled that these prohibitions in Brink’s employment agreements violated Rule 21F-17 (a), which was enacted as part of the SEC’s Whistleblower program. Act of 1934 provides, in relevant part:

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No one may take measures to prevent a person from communicating directly with Commission staff about a possible breach of the Securities Act, including enforcing, or threatening to enforce, a confidentiality agreement … with respect to such communication.

The SEC reasoned that the financial information required to remain confidential was “the type of information and documents that are often components of whistleblower complaints.”4 Although Brink made changes to some of its agreements from 2015 to 2019, it still required approximately 2,000 to 3,000 employees to “notify the company before disclosing financial or business information to third parties, and threaten[ed] those with liquidation and attorneys’ fees if they did not. “5 Brink did this despite receiving emails, “general customer bulletins, legal notices and case summaries from various private law firms discussing the commission’s enforcement actions” related to comparable language in other employers’ employment contracts.6

Under the agreement between Brink and the SEC, Brink is required to pay a fine of $ 400,000, amend its employment contracts to comply with Rule 21F-17 (a), and notify current and former employees of the alert protection to which they are entitled.

This recent decision confirms that the SEC continues to aggressively prosecute companies that include provisions in agreements or guidelines that undoubtedly discourage whistleblowers from providing voluntary information about possible violations of the Securities Act. Companies should carefully review their forms of employee agreements, separation agreements, confidentiality agreements, as well as employee codes, guidelines, and other documents that include restrictions on employees’ disclosure of company information. Any revisions of such documents should be made with care in order to maintain maximum protection of the Company’s confidential information while complying with SEC mandates. Even those companies that are not under the SEC’s jurisdiction may wish to take such action, as the SEC’s position is similar to that taken by the National Labor Relations Board (NLRB) and the Equal Employment Opportunity Commission (EEOC) in their respective efforts to ensure that employers does not discourage employees from contacting or collaborating with these agencies.

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Wilson Sonsini will actively monitor any further developments related to the SEC’s interpretation and enforcement of Dodd-Frank. Our attorneys are available to work with clients to review and make necessary changes to work-related agreements and relevant guidelines to deal with this recently settled enforcement action. For more information, please contact a member of the company employment lawsuits or securities litigation practice.


[1] See In the Matter of KBR, Inc., Bytteloven Rel. no. 74619 (1 April 2015) (settled termination and suspension of proceedings); In the question of Merrill Lynch, Peirce, Fenner and Smith, Inc., Bytteloven Rel. No. 78141 (June 23, 2016); In the issue of BlueLinx Holdings, Inc., Bytteloven Rel. No. 78528 (August 10, 2016); In the issue of HealthNet, Inc.., Bytteloven Rel. No. 78590 (August 16, 2016); In the question of Anheuser-Busch InBev SA / NV, Bytteloven Rel. No. 78957 (September 28, 2016); In the matter of NeuStar, Inc.., Bytteloven Rel. No. 79593 (December 19, 2016); In the question of SandRidge Energy, Inc., Bytteloven Rel. No. 79607 (December 20, 2016); In the question of BlackRock, Inc.., Bytteloven Rel. No. 79804 (January 17, 2017); In Matter of Homestreet, Inc., et al., Bytteloven Rel. No. 79844 (January 19, 2017).

[2] In the question of The Brink’s Company, Bytteloven Rel. No. 95138, at 3 (June 22, 2022), available at

[3] ID.

[4] ID.

[5] ID. 5 o’clock.

[6] ID. at 4, 5.

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