WASHINGTON (Legal Newsline) —
The Securities and Exchange Commission (SEC) announced Dec. 19 that
Virginia-based NeuStar Inc. has agreed to pay $180,000 to settle allegations
involving severance agreements that forbade whistleblowing.
“This action demonstrates our continued strong enforcement of this
critically important whistleblower protection rule and underscores our ongoing
commitment to ensuring that potential whistleblowers can freely communicate
with the SEC about possible securities law violations,” said Jane Norberg, chief
of the SEC’s Office of the Whistleblower.
The SEC alleged the company
used severance agreements that contained a broad non-disparagement clause
forbidding former employees from speaking with the SEC “in any communication that
disparages, denigrates, maligns or impugns” the company. Former employees could allegedly lose their severance pay if they broke this clause.
“Public companies cannot use severance agreements to impede
whistleblowers from communicating with the SEC about a possible securities law
violation,” said Antonia Chion, associate director of the SEC’s Enforcement
Division. “NeuStar’s severance agreements broadly prohibited former
employees from communicating any disparaging information about the company to
the SEC, and unsurprisingly at least one former NeuStar employee was chilled by