A bill called the SEC Whistleblower Reform Act of 2023 was introduced in the United States Senate to expand and protect the rights of SEC Whistleblowers. It was introduced in the Committee on Banking, Housing, and Urban Affairs on March 15, 2023. It enhances the Securities Exchange Act of 1934.
This bill, not yet passed into law, would expand and revise whistleblower protections applicable to individuals who provide information to the Securities and Exchange Commission (SEC) relating to a violation of securities laws. President Joseph R. Biden has indicated he will sign it into law if it passes both the Senate and the House.
This proposed Act is sorely needed. An employer under current law, is prohibited from retaliating against these whistleblowers. Under the new bill, the prohibition against retaliation against these whistleblowers is expanded to include two major groups: the first are individuals who provide information regarding potential violations to their supervisors or other employees in positions of authority. The language in the bill pertaining to employee SEC whistleblowers adds, “another individual working for the employer described in subclause (I) who the whistleblower reasonably believes has the authority to—“(aa) investigate, discover, or terminate the misconduct; or “(bb) take any other action to address the misconduct”. The second major group are individuals who provide information relating to violations subject to the jurisdiction of the Public Company Accounting Oversight Board, the Municipal Securities Rulemaking Board, or a self-regulatory organization.
This bill also would require the SEC to make an initial disposition of a whistleblower award claim within the later of one year of the deadline to submit such a claim, or one year after the final resolution of any litigation in the matter.
Predispute Arbitration Agreements Will Be Deemed Unenforceable
Perhaps most importantly, the bill deems as unenforceable a predispute arbitration agreement regarding a whistleblower action. Predispute arbitration agreements have been the Achilles' heel in many disputes where a person seeks a just resolution. Currently, for the most part, with some exceptions, these agreements are enforceable.
SEC Whistleblower Reform Act of 2023, Language in Section 4 of this bill states as follows:
“NONENFORCEABILITY OF CERTAIN PROVISIONS.
(a) In General.—Section 21F of the Securities Exchange Act of 1934 (15 U.S.C. 78u–6) is amended by adding at the end the following:
“(k) Nonenforceability Of Certain Provisions Waiving Rights And Remedies Or Requiring Arbitration.—
“(1) WAIVER OF RIGHTS AND REMEDIES.—The rights and remedies provided in this section may not be waived by any agreement, policy form, or condition of employment, including by a predispute arbitration agreement.
“(2) PREDISPUTE ARBITRATION AGREEMENT.—No predispute arbitration agreement shall be valid or enforceable if the agreement requires the arbitration of a dispute arising under this section.”.
(b) Applicability.—Subsection (k) of section 21F of the Securities Exchange Act of 1934 (15 U.S.C. 78u–6), as added by subsection (a), shall apply with respect to any action that is filed on or after, or that is pending as of, the date of enactment of this Act.”
Civil rights advocates are pleased with any statute that bars mandatory arbitration agreements. Recently, U.S. Senator Cory Booker (D-N.J.), a member of the Senate Judiciary Committee, and U.S. Representative Colin Allred (D-TX) introduced legislation on May 2, 2023, that would end the practice of forcing individuals who have experienced racial discrimination at work into arbitration. It is called, “The Ending Forced Arbitration of Race Discrimination Act”. This legislation is extremely important because right now many employees all over the US who have signed employment dispute arbitration agreements who experience disparity in pay, retaliation, heinous racism on the job, and a hostile work environment are being denied the right to file a discrimination lawsuit in a Court. President Joseph R. Biden has indicated he will sign this bill if it passes both houses of Congress. It will give workers who have suffered racism at work, the choice to go to court rather than be forced into an arbitration proceeding.
President Joseph R. Biden already signed on March 3, 2022, the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021. This Act limits the use of pre-dispute arbitration agreements and class action waivers covering sexual assault and sexual harassment claims.
What You Can Do
I am an aggressive and compassionate employment law attorney who is experienced in successfully representing employees who were whistleblowers, including government workers and private employees. If you find yourself in a situation with inadequate job security because of the aforementioned issues, if you are thinking of resigning, or have been fired or think you will be fired, are being pushed out of your job or retaliated against, you should contact this office immediately for a free consultation.
If You Quit Your Job, You May Lose Right to Prevail in a Lawsuit
If you quit your job, you may lose your right to prevail in a lawsuit. If you are thinking of quitting, or you think you will be fired, you should know that you may lose your right to prevail in a lawsuit unless you first take certain legally required measures to preserve your job while you are still employed. If you are thinking of quitting, or think you will be fired, you should contact this office immediately to discuss your options in the safest way for you.
Let Me Fight for You
Hope A. Lang, Attorney at Law represents workers throughout the entire state, including Hackensack, Jersey City, Newark, Irvington, Orange, East Orange, Trenton, Paterson, Montclair, Elizabeth, North Brunswick, Cherry Hill, Vineland, Union, Plainfield, Hamilton Township, Lakewood, Edison, Parsippany-Troy Hills, Franklin, Lakewood, and in every NJ County, including Bergen, Hudson, Middlesex, Essex, Monmouth, Somerset, Ocean, Union, Camden, Passaic, Morris, Gloucester, Atlantic, Burlington, Camden Counties.