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OSHA Takes a Harder Tack on Whistleblower Settlement Agreements

OSHA has revised its guidance on settlement agreements in whistleblower cases, taking a stricter approach to what provisions can be included in OSHA-approved settlements.

OSHA's new guidance, part of the revisions to its Whistleblower Investigations Manual, parallels efforts by the SEC to combat agreements that could impede employees from reporting violations to the government.

Taking On De Facto Gag Order Provisions

The new OSHA guidelines seek to "ensure that settlements do not contain terms that could be interpreted to restrict future whistleblowing," the agency says. That means that OSHA will not approve settlement agreements with provisions that discourage whistleblowing, even if those provisions do not prohibit it outright.

Such "de facto gag order provisions" can arise out of broad confidentiality and non-disparagement clauses, the agency notes, or be found in specific provisions. It offers four examples of settlement provisions that OSHA would not approve:

  1. A provision that limits a complainant's right to provide information to the government or cooperate in investigations.
  2. A provision that requires complainants to notify their employers before communicating with the government.
  3. A provision that requires complaints to affirm that they have not provided information to the government or disclaim knowledge regarding their employers potential legal violations.
  4. Provisions that require complaints to waive their right to government whistlelblower awards.

The new guidelines also take aim at liquidated damages provisions in settlement agreements. OSHA will not approve a settlement where such damages "are clearly disproportionate to the anticipated loss to the respondent of a breach."

Update Your Settlement Boilerplate

In order to help employees understand their rights, OSHA asks that any potentially offending provisions be removed from settlement agreements and/or the following boilerplate added:

Nothing in this Agreement is intended to or shall prevent, impede or interfere with complainant's non-waivable right, without prior notice to Respondent, to provide information to the government, participate in investigations, file a complaint, testify in proceedings regarding Respondent's past or future conduct, or engage in any future activities protected under the whistleblower statutes administered by OSHA, or to receive and fully retain a monetary award from a government-administered whistleblower award program for providing information directly to a government agency.

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