Concepts and Procedures in Whistleblower Law

By Stephen M. Kohn | Go to book overview

Chapter 10
Settlement Agreements
and Hush Money

One of the most controversial management practices concerns employer payments to employees in exchange for their agreement not to testify in an administrative or judicial proceeding or to cooperate with federal or state regulatory authorities.1 Various forms of secrecy agreements, or hush money settlements, have been documented in a wide variety of contexts, including tobacco litigation,2 personal injury cases,3 and environmental/ nuclear whistleblower disputes.4

In a number of cases, employers have insisted upon non-disclosure or settlement agreements that prohibited the employee whistleblower from "voluntarily" testifying in court or regulatory proceedings concerning their former employer.5 In one settlement, the employee was required to sign agreements obligating him "not to take any action or do anything to encourage or otherwise induce theNuclear Regulatory Commission" to investigate his claims6 and not to "interest the news media" in the whistleblower allegation.7 Another settlement required the employee to "withdraw and forever cease his participation in the NRC and the Public Utilities Commission "PUC" proceedings."8 Employers have also sought agreements prohibiting employees from assisting in Equal Employment Opportunity Commission (EEOC) investigations,9 False Claims Act proceedings,10 and have sought injunctions to prohibit former employees from testifying in court proceedings.11

Employer attempts to justify these restrictive agreements have been harshly criticized,12 and public disclosures of the agreements have been highly embarrassing to the industries involved.13 In the environmental area,

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