Yet another relatively small monetary sanction, this one settled between the Securities and Exchange Commission and a healthcare insurance provider, serves as just the latest warning to all public companies that craft policies for their workforce and exit agreements with departing employees.

On Aug. 16, the SEC reached a consent agreement with Health Net, a California-based healthcare insurance provider, over allegations it violated securities laws for using severance agreements that required outgoing employees to waive their ability to obtain monetary awards from the SEC’s whistleblower program. The company agreed to pay a $340,000 penalty.

The Exchange Act’s Rule 21F-17, effective in 2011, demands that “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.”

According to the SEC’s order against Health Net, beginning prior to August 2011, and continuing through Oct. 22, 2015, Health Net entered into voluntary severance agreements with employees who were leaving the company. A severance agreement is a contract between an employer and a former employee documenting the rights and responsibilities of both parties incidental to the employee’s departure.

On Oct. 22, 2015, it amended those agreements. Health Net’s severance agreements included a waiver and release of claims that listed various potential claims against it that a departing employee waived as a condition of being paid monetary severance payments and receiving other voluntarily provided consideration from the company.

In August 2011—after the SEC adopted Rule 21F-17—and as part of a regular periodic review and update of its agreements, Health Net amended the waiver and release of claims to specify that, while not prohibited by the severance agreement from participating in a government investigation, the former employee who executed the waiver and release claims was prohibited from filing an application for, or accepting, a whistleblower award from the SEC, according to the order.

Specifically, the waiver and release of claims stated that “nothing in this release precludes employee from participating in any investigation or proceeding before any federal or state agency, or governmental body . . . however, while employee may file a charge and participate in any such proceeding, by signing this release, employee waives any right to bring a lawsuit against the company, and waives any right to any individual monetary recovery in any such proceeding or lawsuit or in any proceeding brought based on any communication by employee to any federal, state, or local government agency or department.”

Approximately 600 employees signed agreements that contained such language, which the company used from approximately August 2011 to June 2013. At that time, Health Net removed the language expressly prohibiting employees from applying for whistleblower awards under Section 21F, but retained restrictive language that removed the financial incentive for reporting information until last year.

As Compliance Week previously reported, the Health Net enforcement action comes just one week after the SEC reached a consent agreement with BlueLinx Holdings, an Atlanta-based building products distributor, over similar allegations that i violated securities laws when using severance agreements that required outgoing employees to waive their right to monetary recovery if they filed a complaint with the Commission or other federal agencies. The company agreed to pay a $265,000 penalty.