Recent Securities and Exchange Commission enforcement actions have zeroed in on whistleblower protections in employee separation agreements, signaling that now may be the time for companies to closely review employee agreements and releases. On September 29, 2023, the SEC announced settled charges against New York-based registered investment adviser D. E. Shaw & Co. for impeding whistleblowing by requiring employees to sign agreements that prohibited the disclosure of confidential corporate information to third parties, without an exception for potential SEC whistleblowing, and by requiring departing employees wishing to receive deferred compensation to sign releases affirming that they had not filed any complaints with any government agency. D. E. Shaw agreed to pay $10 million to settle the SEC’s charges.

Just 10 days earlier, on September 19, the SEC had announced settled charges against CBRE, a commercial real estate services and investment firm, for using an employee release form that the SEC alleged violated its whistleblower protection rule. According to the order, the separation agreement required employees to represent that they had not filed charges or complaints against CBRE or any of its agents with any court or agency based on events prior to the date of the agreement, which the SEC construed as impeding potential whistleblowers from reporting complaints.  (Check out the Cooley PubCo blog for more information on the SEC’s charges against CBRE.)

Is it time to take another look at your employee separation agreements and release forms?


Wendy Brenner
Luke Cadigan
Helen Luu
Elizabeth Skey

Posted by Wendy Brenner, Luke Cadigan, Helen Luu and Elizabeth Skey