The Securities and Exchange Commission (SEC) on April 1 announced it had settled an enforcement action over an employers use of a restrictive confidentiality agreement. The SEC brought the enforcement action against KBR, Inc., which had a practice of requiring its employees to sign a confidentiality agreement, when they were serving as witnesses in an internal company investigation.
The SEC alleged that KBRs standard confidentiality agreements used in investigations were so restrictive that they potentially discouraged employees from reporting any law violations to the SEC. The agreements confidentiality provisions, according to the SEC, violated the whistleblower protections of the Dodd-Frank Act. The confidentiality provisions required any KBR employee-witness to agree to keep any matters being investigated confidential and not to discuss any such matters with any outside parties, unless the person obtained prior approval from the KBR legal department. If the employee-witness violated the confidentiality provisions, the employee faced discipline or termination.
