Some Secrecy Agreements in the Workplace May be in Violation of Federal Whistleblower Laws

Sometimes, workplace agreements are implemented in order to protect sensitive information. According to The Washington Post, however, some agreements have gone too far and appear to violate federal whistleblower laws by preventing employees from being able to report and receive financial rewards from information about wrongdoing.

“I’m very concerned about these kinds of agreements,” said Stephen L. Cohen, associate director of the Division of Enforcement at the SEC, to The Washington Post. “It is likely that a lot of people are not coming to us because of these agreements. Anything that inhibits a person’s desire to come forward to tell us about violations of the law is deeply troubling.”

Donna Busche, 51, told The Washington Post that this was exactly the case when the U.S. Department of Energy asked contract employees such as herself to sign a nondisclosure agreement that barred them from reporting wrongdoing without first getting approval from an agency supervisor at the country’s most contaminated facility in November 2012. The agreement she signed may have violated federal whistleblower laws because it prevented employees from collecting compensation for reporting information about wrongdoing. After reporting safety concerns, she was fired from her position as the manager of environmental and nuclear safety at the Hanford waste treatment facility.

URS, the company that fired Busche, says that her termination was unrelated to her whistleblowing. She and another employee testified before Congress in March at a hearing to review how whistleblowers were handled at Hanford.

“It was a gag order,” Busche told The Washington Post. “The message was pretty clear: ‘Don’t say anything to anyone, or else.’ ”

Legal experts say that overly restrictive nondisclosure agreements are becoming more commonplace. Whistleblower lawyers tell The Washington Post that the language of these agreements is more severe than those that traditionally protected proprietary information. Two companies have recently come under scrutiny for these types of agreements: Kellogg, Brown and Root, one of the largest defense contractors in the US, and the Arlington, Virginia nonprofit organization International Relief and Development.

The Securities Exchange Commission is investigating KBR and the Special Inspector General for Afghanistan Reconstruction is looking into agreements at IRD. After The Washington Post reported about IRD’s agreements, the company changed the wording of the documents. Both KBR and IRD have denied wrongdoing.

In recent years, the federal government has taken more actions to protect whistleblowers. In 2010, the Office of the Whistleblower at the SEC was established after Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act. A financial rewards program to compensate whistleblowers was also created through this law. In 2012, an American banker who reported that U.S. citizens were secretly depositing into a Swiss bank received $104 million in one of the largest whistleblower cases.

Employees are becoming more afraid that whistleblowing will lead to retaliation in the workplace, surveys of federal employees and workers on Wall Street suggest. The U.S. Office of Special Counsel is reviewing 37 reports of retaliation by VA workers who reported about wrongdoing; some of them had reported about scheduling problems in the system, an issue that has led to a national controversy.