On April 18, Bloomberg reported that Big Tech firms are forcing workers to sign illegally restrictive non-disclosure agreements, according to whistleblower tips filed with the U.S. Securities and Exchange Commission (SEC).
“Firms, including an Apple Inc. subcontractor, Electronic Arts Inc. and Block Inc. improperly used non-disclosure agreements that prohibit workers from reporting bad behavior to the SEC, according to tipster complaints viewed by Bloomberg News that were filed with the agency by law firm Kohn, Kohn & Colapinto LLP,” Bloomberg reports. “The contracts, which ban employees from sharing confidential information with any outsider, don’t include an exception for alerting regulators.”
Under the SEC Whistleblower Program rule Rule 21F-17, “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.”
In recent years, the SEC has filed a number of enforcement actions against companies for forcing employees to sign restrictive NDAs. For example, in June 2022, the SEC charged the Brink’s Company with violating Rule 21F-17 by using non-disclosure agreements which allegedly “prohibited employees from divulging confidential information about the company to any third party without the prior written authorization of a Brinks, Inc. executive officer.”
According to Bloomberg, the whistleblower law firm Kohn, Kohn & Colapinto, a leading advocate for bans on restrictive NDAs, claims that the Big Tech contracts “show a ‘willful disregard’ for the law and SEC rules given the public statements and numerous enforcement actions the agency has brought against such agreements,” in its SEC complaints.
Bloomberg notes that one of the whistleblowers represented by Kohn, Kohn & Colapinto is Apple whistleblower Thomas Le Bonniec who made allegations about Siri’s privacy practices. “As a dedicated Siri data analyst, Le Bonniec said he heard conversations he believed violated users’ privacy, including details about sexual preferences, bank account numbers and health problems,” Bloomberg reports.
Le Bonniec told Bloomberg that he struggled with blowing the whistle because of a restrictive NDA he had signed: “‘“It was scary. I thought I may end up broke for the rest of my life.’”
Further Reading:
Tech Firms Try to Muzzle Workers With NDAs, SEC Tipsters Say