WASHINGTON (Legal Newsline) — BlueLinx Holdings Inc. will pay a $265,000 penalty to resolve allegations of violating securities laws, the Securities and Exchange Commission (SEC) has announced.
According to the SEC, the Atlanta-based building products distributor used severance agreements that forced employees to waive their rights to severance money if they filed a complaint with the SEC or other federal agencies.
“Companies simply cannot undercut a key tenet of our whistleblower program by requiring employees to forego potential whistleblower awards in order to receive their severance payments,” said Jane Norberg, acting chief of the SEC’s Office of the Whistleblower.
The company allegedly put its monetary recovery prohibition rule into place in mid-2013, close to two years after the SEC adopted Rule 21F-17 – a law that bars any action to impede someone from communicating with the SEC about possible securities law violations. BlueLinx’s agreements meant that outgoing employees had to waive potential whistleblower award rights or risk losing post-employment benefits.
“We’re continuing to stand up for whistleblowers and clear away impediments that may chill them from coming forward with information about potential securities law violations,” said Stephanie Avakian, deputy director of the SEC’s Enforcement Division.