Following up on our recent coverage of the SEC’s administrative orders in BlueLinx Holdings (link is external) and Health Net (link is external), we now bring you the somewhat dated “news” of interim guidance (link is external) issued by the Occupational Safety and Health Administration on August 26th. This guidance comes in the form of a memo from OSHA’s director of whistleblower protection programs, Maryann Garrahan. The guidance asserts that in settlement agreements OSHA “sometimes encounters provisions that prohibit, restrict, or otherwise discourage a complainant from participating in protected activity related to matters that arose during his or her employment.” In those cases, “OSHA must ensure that such clauses are removed or clarified so that the agreements are lawful and consistent with the underlying purposes of the whistleblower protection statutes.”

Garrahan goes on to explain that OSHA will not approve a “gag” provision that discourages filing a complaint with a government agency, participating in an investigation, testifying in proceedings, or otherwise providing information to the government. This discouragement can come in the form of broad confidentiality or non-disparagement clauses. It also can appear in specific provisions such as these:

  • A provision that restricts a complainant’s ability to provide information to the government, participate in investigations, file a complaint, or testify in proceedings. This one seems obvious.
  • A provision that requires a complainant to notify his or her employer before filing a complaint or voluntarily communicating with the government regarding the employer's past or future conduct. We saw a provision like this in Paragraph 8 of BlueLinx Holdings (link is external).
  • A provision that requires a complainant to (1) affirm that she has not previously provided information to the government or engaged in other protected activity, or (2) to disclaim any knowledge that the employer has violated the law. Hmmm. The first of these would be pretty chilling. I wonder how valuable the second would be to the employer in any event. A whistleblower can really only report facts; it’s going to be somebody else’s job to apply the law to those facts.
  • A provision that requires a complainant to waive his or her right to receive a monetary award from a government-administered whistleblower award program for providing information to a government agency. For example, OSHA will not approve a provision that requires a complainant to waive his or her right to receive a monetary award from the SEC. Here, OSHA is explicitly lending its support to the SEC’s whistleblower program and condemning the sorts of provisions found in Paragraph 9 of BlueLinx and Paragraph 10 of Health Net (link is external).

Oh, yeah. OSHA also hates liquidated damages imposed on employees in this context.

Anyway, when OSHA sees things like this, it will ask parties to remove the provisions and add the following language:

"Nothing in this Agreement is intended to or shall prevent, impede or interfere with complainant’s non-waivable right, without prior notice to Respondent, to provide information to the government, participate in investigations, file a complaint, testify in proceedings regarding Respondent’s past or future conduct, or engage in any future activities protected under the whistleblower statutes administered by OSHA, or to receive and fully retain a monetary award from a government-administered whistleblower award program for providing information directly to a government agency."

So there you have it. Employers drafting severance agreements should at least keep this guidance in mind. Who knows, maybe Maryann Garrahan is getting ahead of herself with it. But before you disregard it, consider how fun litigating these issues will be.