The Brink’s Company, a provider of security-related services, has agreed to pay $400,000 and add wording in U.S. confidentiality agreements to comply with a Securities and Exchange Commission (SEC) rule regarding corporate whistleblowers.
Brinks, without admitting or denying the agency’s findings, reached agreement with the SEC on Wednesday to settle charges that the confidentiality and nondisclosure agreements it required new employees to sign contained clauses that prohibited workers from disclosing confidential financial information to third parties without the company’s consent. The agreements contained language that threatened current and former employees with $75,000 in liquidated damages, as well as legal fees, if they failed to notify the company before disclosing such information.
The SEC requires such agreements contain an exemption for potential SEC whistleblowers. Brinks failed to provide this exemption in certain of its confidentiality agreements from 2015-19, the agency said. Brinks added the whistleblower exemption to confidentiality and nondisclosure agreements for executive-level employees in 2017, the SEC said, but not to agreements with all Brinks employees until April 2019.
The confidentiality agreements with the overly restrictive language affected approximately 2,000-3,000 new hires annually from 2015-19, the SEC said.
Brinks agreed to cease and desist from future violations, pay the fine, and added exemptions for SEC whistleblowers to its confidentiality agreements.
According to the SEC’s order, Brinks must add to employment-related agreements with all U.S. based employees a provision that acknowledges nothing in the agreement “limits (an) employee’s ability to file a charge or complaint with the Securities and Exchange Commission, or any other federal, state, or law enforcement agency,” including providing documents or other information, and also does not “limit (an) employee’s right to receive an award for information provided to government agencies.”
As part of the settlement, Brinks agreed to contact all current and former employees affected and alert them to the exemption that has been inserted into all the company’s confidentiality agreements. Brinks must also provide the SEC with a certification the company has complied with this part of the order.
SEC Commissioner Hester Peirce issued a statement expressing her concern regarding this portion of the agreement.
“The Commission plainly lacks statutory authority to impose such a broad requirement,” she said. “… That a respondent has agreed to particularly broad language as part of a settlement should not be misconstrued as an indication that other companies are under any obligation to use the same or similar language to avoid running afoul of [the agency’s rules].”
Brinks did not respond to a request for comment.