Exclusive: Companies made deals that could run afoul of U.S. whistleblower rules
By Sarah N. Lynch
WASHINGTON (Reuters) - Wells Fargo (WFC.N: Quote), Advanced Micro Devices (AMD.O: Quote) and Fifth Third Bank (FITB.O: Quote) have in recent years agreed to settlement deals that seek to muzzle former employees in ways that some lawyers said could violate U.S. whistleblower protection laws.
Five lawyers, including three who represent whistleblowers, said that the settlements appear aimed at blocking workers from airing their concerns and contain similarities to those used by other companies that ran afoul of government rules.
The deals by Wells Fargo, AMD, and Fifth Third Bank were among a dozen such corporate settlements reached between 2012 and 2015 that were reviewed by Reuters.
The companies each struck deals with departing workers that limit the employees' ability to receive money arising from any government investigations into their former employers.
Some language in the settlements could run afoul of rules adopted by the U.S. Securities and Exchange Commission (SEC) in 2011 that generally bar corporate attempts to muzzle whistleblowers, the lawyers.
A Wells Fargo spokeswoman declined to comment, as did a spokesman for Advanced Micro Devices. A spokesman for Fifth Third said the agreement "speaks for itself" and that the company “takes seriously" its obligation to comply with all “relevant laws.” A SEC spokeswoman declined to comment.
Since 2015, the SEC has brought four cases targeting specific types of so-called whistleblower gag orders, such as confidentiality agreements that bar employees from discussing internal wrongdoing.
That followed its adoption of rules designed to encourage people to come forward with tips about possible corporate wrongdoing. The rules protect whistleblowers from retaliation and ban companies from taking any action that could "impede an individual from communicating directly" with the SEC, including through confidentiality agreements. The SEC says the program has awarded more than $85 million to 32 whistleblowers. Continued...