In September, OSHA issued new guidance for evaluating settlement agreements between complainants and their employers to protect past and future whistleblowing activities. OSHA reviews these settlement agreements to ensure they are fair, reasonable, and entered into knowingly and voluntarily. While OSHA already has extensive whistleblower protections, this guidance provides new guidelines for approving settlement agreements between employers and whistleblowers.
The guidance provides that OSHA will not approve any settlement that contains “gag” restrictions that prohibit or discourage a complainant from engaging in a “protected activity.” A “protected activity” includes:
- Filing a complaint with a government agency
- Participating in an investigation
- Testifying in proceedings
- Otherwise providing information to the government
These prohibitions can arise in a number of settlement provisions that range in specificity. Such prohibitions can be found in specific settlement provisions, such as an outright restriction on providing information to the government regarding an occupational injury or exposure, a requirement that an employee notify the employer before communicating with the government, or a waiver of a complainant’s right to receive a monetary award under a government-administered whistleblower program. Other times, these provisions prohibiting or discouraging whistleblowing are found in very general contract provisions, such as broad confidentiality or non-disparagement clauses.
If OSHA sees these types of provisions in a settlement agreement, it may require that they be removed entirely, and/or it may require that the following language be “prominently positioned” in the agreement:
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.
OSHA will also scrutinize liquidated damages clauses in whistleblower settlements, evaluating whether such damages are disproportionate to the potential loss or excessive given the employee’s position or wages.