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
“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.