PE firms typically use a variety of agreements and written policies to protect valuable confidential business information accessible by their employees. Firms must be careful, however, that those agreements and policies do not inhibit their employees’ rights to contact governmental agencies, including for the purposes of whistleblowing or filing claims. Negative consequences of overbroad language may include regulatory sanctions by the SEC and the invalidation of certain agreements by the Equal Employment Opportunity Commission (EEOC). In a guest article, Anne E. Beaumont and Lance J. Gotko, partners at Friedman Kaplan Seiler & Adelman, outline the SEC’s whistleblowing rules; summarize key SEC and EEOC enforcement actions over the last several years for violations of the whistleblowing rules; and offer practical advice to PE firms on avoiding violations of applicable whistleblower rules. For additional commentary from Beaumont, see “Does the Digital Realty Decision Represent a Sea Change for Whistleblowers or Merely More of the Same?
” (Mar. 15, 2018); and “Recent New York Court of Appeals Decision Eases Path for Investor Lawsuits Against Cayman Funds, but Certain Hurdles Remain
” (Dec. 7, 2017).