The Securities and Exchange Commission (SEC) has recently issued imposed significant and costly sanctions against companies that require employees to sign non-disclosure agreements containing certain language either limiting employees from disclosing company confidential information without company approval, or representing that they have not filed complaints with government entities.

Language of this nature may not appear to be entirely out of place in separation agreements and employment agreements. The SEC has held, however, that the agreements at issue violated the law insofar as they may have impeded employees from communicating with the SEC.

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