In recent weeks, the U.S. Securities and Exchange Commission has taken action against two companies for crafting severance agreements that required departing employees to sign away their right to collect whistleblower awards.

On Tuesday, Los Angeles-based Health Net Inc. paid a $340,000 penalty for including a waiver of whistleblower rights in its severance agreements. Last week, BlueLinx Holdings Inc., an Atlanta-based building products distributor, resolved similar charges in a $265,000 settlement.

The settlements follow last year's enforcement action against KBR Inc. related to a provision in its confidentiality agreement and reflect a focused effort by the SEC to go after companies that deter employees from tipping off the agency to possible securities law violations.

Corporate lawyer Darrick M. Mix, the head of Duane Morris's capital markets practice group, talked to Corporate Counsel about the cases and what lessons they offer for in-house lawyers.

Is there a crackdown?

Yes, it seems that there is a crackdown. Clearly it started with the KBR Inc. case last year. The SEC pursued an enforcement action against KBR because its standard confidentiality agreement imposed prenotification requirements before an employee could contact the SEC regarding any violation. SEC rule 21F-17 prohibits companies from taking any action to impede whistleblowers from reporting possible securities violations to the SEC. Even though there were no apparent instances in which KBR prevented employees for contacting the SEC, the SEC was concerned that KBR's confidentiality agreement would have a chilling effect on potential whistleblowers.

The SEC has in the last couple of weeks has pursued additional actions for similar violations.

Why are companies interested in prenotification?

For companies that added prenotification requirements to agreements, the goal was to be able to discover and resolve potential violations internally before government regulators had been notified.

Understandably, companies would prefer to investigate and potentially resolve these issues internally prior to having the SEC enforcement division knock on their door, which may require significant management, time and expenses, including legal fees and ultimately potential violations of law and associated consequences, including fines and penalties.

What can companies or their lawyers learn from these cases?

One: the SEC is serious in protecting whistleblowers and the whistleblower-reporting regime generally.

Two: the SEC will act when they believe employers are imposing requirements that it believes chill reporting of violations to the SEC.

Three: there may be changes that need to made to agreements to address the SEC's enforcement priorities.

Can companies and the SEC both have what they want in these matters?

It's hard to square a company's desire for prenotification and waivers associated with the whistleblowing regime and the SEC's priorities. In order to deal with these cases and the SEC's focus on these issues, companies can structure their agreements to comply with the SEC's interpretation of its rules.

For example, companies should not require prenotification to the company, should not require waivers of any monetary awards and should be cautious of including any other requirements that would reasonably be interpreted as impeding employees from contacting the SEC or having a chilling effect on that contact.

Reprinted with permission from Corporate Counsel, © ALM Media Properties LLC. All rights reserved.