Privately held energy and technology company Monolith Resources agreed to pay $225,000 to settle charges by the Securities and Exchange Commission (SEC) it used employee separation agreements that violated whistleblower protection rules.
Monolith agreed to cease and desist from further violations in reaching settlement, the SEC announced in a press release Friday. The agency acknowledged the company’s remedial actions, including its notifying former employees who signed the separation agreements.
The details: From February 2020 to March, Monolith required certain departing employees to waive their rights to monetary whistleblower awards when signing separation agreements, the SEC alleged in its order.
Specifically, the agreements stated, “’You retain the right to participate in any such action but not the right to recover money damages or other individual legal or equitable relief awarded by any such governmental agency,’” according to the SEC.
The SEC found Monolith’s separation agreements violated the Dodd-Frank Act by creating impediments for its former employees to participate in the agency’s whistleblower program.
Compliance considerations: After being contacted by agency staff in April, Monolith voluntarily revised the agreements to clarify it did not restrict a departing employee’s right to communicate with the SEC or other government agencies, along with not limiting an employee’s ability to obtain a whistleblower award for providing information, the SEC said.
In total, 22 separated employees signed agreements that contained the restrictive language, the SEC alleged. Monolith notified the 22 employees the agreement’s section pertaining to whistleblower awards is null and void.
Monolith did not respond to a request for comment. The company agreed to the settlement without admitting or denying wrongdoing.