When a whistleblower retaliation case is resolved before OSHA, the agency will evaluate the proposed settlement to ensure that it does not impede or restrict the whistleblowers’ right to engage in certain forms of protected conduct, such as reporting fraud to the SEC.
OSHA’s Directorate of Whistleblower Protection Programs has issued policy guidelines on provisions in settlement agreements that restrict whistleblowing. The policy guidance states that “OSHA will not approve a ‘gag’ provision that prohibits, restricts, or otherwise discourages a complainant from participating in protected activity,” and defines “protected activity” to include “filing a complaint with a government agency, participating in an investigation, testifying in proceedings, or otherwise providing information to the government.”
The policy guidance clarifies that unlawful “gag clauses” encompass not only express prohibitions on providing information to government agencies, but also indirect restrictions on protected conduct that could dissuade whistleblowing, including broad confidentiality or non-disparagement clauses. In particular, the policy guidance, which will be added to OSHA’s Whistleblower Investigations Manual, identifies four types of settlement provisions that can constrain whistleblowing:
OSHA’s policy guidelines on provisions in settlement agreements that restrict whistleblowing were promulgated in response to a petition for rulemaking submitted by whistleblower law firm Zuckerman Law and the Government Accountability Project. See Whistleblower Advocates Petition DOL to Combat Corporate Muzzling of Whistleblowers
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“A promise is unenforceable if the interest in its enforcement is outweighed by a public policy harmed by enforcement of the agreement.” Town of Newton v. Rumery, 480 U.S. 386, 392 (1987). The ARB has consistently noted that the “purpose of the employee protections that the Labor Department administers is to encourage employees to freely report noncompliance with safety, environmental, or securities regulations and thus protect the public. Melton v. Yellow Transp., Inc., ARB No. 06–052, ALJ No. 2005– STA–2, slip. op. at 20 (ARB Sept. 30, 2008). The Secretary of Labor explained that:
“[p]rotected whistleblowing may expose not just private harms but health and safety hazards to the public, and the Secretary of Labor has been entrusted by Congress to represent the public interest in keeping channels of information open.” McClure v. Interstate Facilities, Inc., 92 WPC 2, D&O of SOL, at 3–4 (June 19, 1995); Beliveau v. Dept. of Labor, 170 F.3d 83, 88 (1st Cir. 1999).
Waivers of federal rights must be knowing and voluntary. Riley v. American Family Mutual Ins. Co., 881 F.2d 368, 371 (7th Cir. 1989). Under Seventh Circuit law, which governs this claim, “when an employee challenges his assent to a release as not being knowing and voluntary, a court must examine the ‘totality of the circumstances’
surrounding the execution of the release.” Pierce v. Atchison, Topeka and Santa Fe Railway Co., 65 F.3d 562, 571 (7th Cir. 1995).”
Vinnett v. Exelon, 2022–ERA–00002 (ALJ Oct. 11, 2022).
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