The U.S. Securities and Exchange Commission (SEC) has levied a $265,000 sanction against the Atlanta-based BlueLinx Holdings. According to reports, the company settled with the SEC for the amount in question to resolve allegations that it included illegal provisions in its severance agreements that prevented potential whistleblowers from coming forward with complaints to federal officials.
In addition to the sanction, BlueLinx must correct the so-called “bounty waiver” provision in its contracts. The company also agreed to include new language that more clearly outlines employees’ protected rights to serve as whistleblowers.
According to officials with the SEC, the previous agreement had violated Rule 21F-17 of the Exchange Act, which states that employees cannot be prevented from communicating with the SEC regarding possible securities law violations. More specifically, the provision disallowed employees from receiving monetary recovery from an administrative agency, thereby impeding them from receiving a reward through the SEC’s whistleblower incentive program.
With this action, the SEC is making it clear to businesses and organizations that it will continue to be vigilant in scrutinizing severance agreements and other contracts that could be in violation of its rules and regulations. Thus, companies are being encouraged to review these agreements for any language that could possibly raise red flags with the federal agency.
If you believe that your company may be in violation of securities regulations, you may be able to report this wrongdoing to the SEC — and be eligible for a reward, as well. For further information on your rights and how you might move forward with a complaint, consult a knowledgeable Dallas attorney at Whistleblower Law for Managers today.