The National Highway Traffic Safety Administration has issued an Enforcement Guidance Bulletin barring gag provisions in protective orders and settlement agreements that would prohibit information obtained in private litigation from being transmitted to NHTSA. The purpose of the bulletin is to ensure that confidentiality provisions in agreements do not prevent safety-related information from reaching NHTSA.
The Bulletin was spurred in part by recent examples of confidentiality restrictions keeping critical safety information from NHTSA. As noted in the Bulletin, the “recent General Motors ignition switch and Takata airbag recalls are but two examples of how vital early identification of motor vehicle risks or defects is for the safety and welfare of the American public.”
Recommended Best Practices
NHTSA is not providing a specific provision to include in confidentiality agreements that would automatically comply with the Bulletin, but it recommends that any confidentiality restriction “specifically allow for disclosure of relevant motor vehicle safety information to NHTSA and other applicable governmental authorities. Such a provision could be stated generically, providing that nothing in the order or agreement shall be construed to prohibit either party from disclosing information to a regulatory agency or governmental entity who has an interest in the subject matter of the underlying suit.”
NHTSA Bulletin Consistent with Trend of Federal Agencies Barring Gag Provisions
The NHTSA guidance barring gag provisions is consistent with a trend of other federal agencies barring confidentiality provisions in private agreements that would impede whistleblowing. For example, in April 2015, the SEC issued a landmark order barring gag clauses. In particular, the SEC took action against KBR, Inc., for requiring employees to sign confidentiality agreements that could impede employees from reporting violations. The SEC found that those confidentiality agreements violated Rule 21F-17, which prohibits companies from using gag clauses in agreements or policies to prevent whistleblowers from providing information to the SEC: “No person may take any action to impede an individual from communicating directly with the Commission staff about a possible securities law violation, including enforcing, or threatening to enforce, a confidentiality agreement . . . with respect to such communications.” For a discussion of confidentiality restrictions that could impede whistleblowing to the SEC, see De Facto Gag Clauses: The Legality of Employment Agreements That Undermine Dodd-Frank’s Whistleblower Provisions.
The SEC is not alone in combatting gag provisions that restrict whistleblowing to law enforcement and regulatory agencies. Congress has prohibited government contractors from using federal appropriations to enforce confidentiality agreements that bar disclosures about violations of law, gross mismanagement, a gross waste of funds, or an abuse of authority. And OSHA’s recently revised Whistleblower Investigations Manual states that “OSHA will not approve a ‘gag’ provision that restricts the complainant’s ability to participate in investigations or testify in proceedings relating to matters that arose during his or her employment.”