SEC Charges Seven NASDAQ Listed Public Companies with Violations of Whistleblower Protection Rule
On September 9, 2024, the Securities and Exchange Commission (the “SEC”) announced settled charges against seven public companies for using employment, separation, and other agreements that violated rules prohibiting actions to impede whistleblowers from reporting potential misconduct to the SEC. To settle the SEC’s charges, the companies agreed to pay more than $3 million combined in civil penalties.
- Acadia Healthcare Company, Inc. (ACHC) agreed to pay a $1,386,000 civil penalty;
- a.k.a. Brands Holding Corp. (AKA) agreed to pay a $399,750 civil penalty;
- AppFolio, Inc. (APPF) agreed to pay a $692,250 civil penalty;
- IDEX Corporation (IEX) agreed to pay a $75,000 civil penalty;
- LSB Industries (LXU) agreed to pay a $156,000 civil penalty;
- Smart for Life, Inc. (SMFL) agreed to pay a $19,500 civil penalty; and
- TransUnion (TRU) agreed to pay a $312,000 civil penalty.
The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), enacted on July 21, 2010, amended the Exchange Act by adding Section 21F, “Whistleblower Incentives and Protection.” The congressional purpose underlying these provisions was “to encourage whistleblowers to report possible violations of the securities laws by providing financial incentives, prohibiting employment-related retaliation, and providing various confidentiality guarantees.”
To fulfill this congressional purpose, the Commission adopted Rule 21F-17, which provides in the relevant part:
(a) 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.
Rule 21F-17 became effective on August 12, 2011.
Acadia
According to the Acadia Healthcare Company, Inc. Order, between July 31, 2019, and July 10, 2023, Acadia entered into ninety-eight agreements, including employment agreements, separation agreements, retention agreements, and settlement agreements, that required employees to waive their right to recover a monetary award for participating in an investigation by a government agency. The precise text of these provisions varied, but they were all substantially similar to the following example:
I agree that I hereby waive all rights to sue or obtain equitable, remedial or punitive relief from any or all Released Parties of any kind whatsoever in respect of any Claim, including, without limitation, reinstatement, back pay, front pay, and any form of injunctive relief. Notwithstanding the above, I further acknowledge that I am not waiving and am not being required to waive any right that cannot be waived under law, including the right to file an administrative charge or participate in an administrative investigation or proceeding; provided, however, that I disclaim and waive any right to share or participate in any monetary award resulting from the prosecution of such charge or investigation or proceeding.
(Emphasis added.)
A.K.A. Brands
According to the A.K.A. Brands Holding Corp Order, between June 1, 2019, and January 8, 2021, a.k.a. Brands entered into three employment agreements and two severance agreements that required employees to waive their right to recover a monetary award for participating in an investigation by a government agency. Specifically, each of these agreements required employees to execute a general release following the end of their employment that, while expressly permitting them to participate in government whistleblower programs, also required the employees to waive their right to a potential award. These general releases stated:
I agree that I am waiving all rights to sue or obtain equitable, remedial or punitive relief from any or all Released Parties of any kind whatsoever, including, without limitation, reinstatement, back pay, front pay, attorneys’ fees and any form of injunctive relief. Notwithstanding the above, I further acknowledge that I am not waiving and am not being required to waive any right that cannot be waived under applicable law, including the right to file an administrative charge or participate in an administrative investigation or proceeding; provided, however, that I disclaim and waive any right to share or participate in any monetary award resulting from the prosecution of such charge or investigation or proceeding.
(Emphasis added.)
Similarly, between May 10, 2019, and October 9, 2023, a.k.a. Brands entered into an additional thirty-five severance agreements that permitted departing employees to participate in government whistleblower programs but required them to waive their right to recover a monetary award. These agreements stated:
[N]othing in this Severance Agreement prohibits or prevents Employee from filing a charge with or participating, testifying or assisting in any investigation, hearing whistleblower action or other proceeding before any federal, state or local government agency (e.g., EEOC, DFEH, NLRB, SEC, etc.), nor does anything in this Severance Agreement preclude, prohibit or otherwise limit, in any way, Employee’s rights and abilities to contact, communicate with, report matters to or otherwise participate in any whistleblower program administered by any such agencies. However, to the maximum extent permitted by law, Employee agrees that if such an administrative claim is made, Employee shall not be entitled to recover any individual monetary relief or other individual remedies.
(Emphasis added.)
AppFolio
According to the AppFolio, Inc. Order, on September 15, 2021, and February 8, 2023, AppFolio entered into two employment agreements that required employees to waive their right to recover a monetary award for participating in an investigation by a government agency. Specifically, each of these agreements required the employee to execute a general release following the end of their employment that, while expressly permitting participation in government whistleblower programs, also required the employee to waive their right to a potential award. These general releases stated:
I agree that I hereby waive all rights to sue or obtain equitable, remedial or punitive relief from any or all Released Parties of any kind whatsoever in respect of any 3 Claim, including, without limitation, reinstatement, back pay, front pay, and any form of injunctive relief. Notwithstanding the above, I further acknowledge that I am not waiving and am not being required to waive any right that cannot be waived under law, including the right to file an administrative charge or participate in an administrative investigation or proceeding; provided, however, that I disclaim and waive any right to share or participate in any monetary award resulting from the prosecution of such charge or investigation or proceeding.
(Emphasis added.)
IDEX
According to the IDEX Corporation Order, on October 25, 2020, IDEX entered into a separation agreement that required a departing employee to waive his right to recover a monetary award for participating in an investigation by a government agency. Although the agreement expressly permitted participation in government whistleblower programs, it also required the departing employee to waive his right to a potential award. Specifically, the agreement stated, in relevant part:
I agree that I hereby waive all rights to sue or obtain equitable, remedial or punitive relief from any or all Released Parties of any kind whatsoever in respect of any Claim, including, without limitation, reinstatement, back pay, front pay, and any form of injunctive relief. Notwithstanding the above, I further acknowledge that I am not waiving and am not being required to waive any right that cannot be waived under law, including the right to file an administrative charge or participate in an administrative investigation or proceeding; provided, however, that I disclaim and waive any right to share or participate in any monetary award resulting from the prosecution of such charge or investigation or proceeding.
(Emphasis added.)
LSB
According to the LSB Industries Order, between December 2019 and November 2023, LSB entered into sixteen agreements that required employees to waive their right to recover a monetary award for participating in an investigation by a government agency. Although these agreements expressly permitted participation in government whistleblower programs, they also required employees to waive their right to a potential award. These included general release agreements that contained award-waiver provisions, as well as an employment agreement and several severance and change-in-control agreements that required employees to execute a separate agreement containing an award-waiver provision following the end of their employment with LSB. Specifically, these agreements stated:
I agree that I hereby waive all rights to sue or obtain equitable, remedial or punitive relief from any or all Released Parties of any kind whatsoever with respect to claims released by me herein, including, without limitation, reinstatement, back pay, front pay, and any form of injunctive relief. Notwithstanding the foregoing, I acknowledge that I am not waiving and am not being required to waive any right that cannot be waived under law, including the right to file an administrative charge or participate in an administrative investigation or proceeding; provided, however, that I disclaim and waive any right to share or participate in any monetary award resulting from the prosecution of such charge or investigation or proceeding.
(Emphasis added.)
Smart for Life
According to the Smart for Life Order, Inc. Order, in May 2022, Smart for Life entered into a separation agreement that required a departing employee to waive his right to recover a monetary award for participating in an investigation by a government agency. Although the agreement expressly permitted participation in government whistleblower programs, it also required the departing employee to waive his right to a potential award. Specifically, the agreement stated, in relevant part:
It is understood that this release does not serve to waive any rights or claims that, pursuant to law, cannot be waived or subject to a release of this kind, such as: . . . the right to file a charge with an administrative agency or participate in an agency investigation; provided, however, that [the employee] hereby waives his right to recover any money in connection with such charge or investigation.
(Emphasis added.)
Similarly, in June 2023, Smart for Life entered into another separation agreement that, while expressly permitting the departing employee to participate in government whistleblower programs, required her to waive her right to recover a potential monetary award. This agreement stated:
This General Release also does not prevent you from filing a charge or complaint with, communicating with, or participating in an investigation or proceeding conducted by the Equal Employment Opportunity Commission (EEOC), the Securities and Exchange Commission (SEC), the National Labor Relations Board (NLRB), or any other federal, state, or local governmental agency or commission (“Government Agencies”). However, to the fullest extent permitted by law, you agree that you are waiving the right to monetary damages or other equitable or monetary relief as a result of any charge, complaint, investigation, or proceeding.
(Emphasis added.)
TransUnion
According to the TransUnion Order, between May 8, 2019, and September 22, 2023, TransUnion entered into twentynine agreements that required senior employees to waive their right to recover a monetary award for participating in an investigation by a government agency. Although these agreements expressly permitted participation in government whistleblower programs, they also required senior employees to waive their right to a potential award. These included general release agreements that contained award-waiver provisions, as well as severance agreements and transaction incentive agreements that required senior employees to execute a separate agreement containing an award waiver provision following the end of their employment with TransUnion. These agreements stated:
I agree that I am waiving all rights to sue or obtain equitable, remedial or punitive relief from any or all Released Parties of any kind whatsoever (including, without limitation, reinstatement, back pay, front pay, attorneys’ fees and any form of injunctive relief). Notwithstanding the above, I further acknowledge that I am not waiving and am not being required to waive any right that cannot be waived under law (including, without limitation, the right to file an administrative charge or participate in an administrative investigation or proceeding); provided that I disclaim and waive any right to share or participate in any monetary award resulting from the prosecution of such charge or investigation or proceeding.
(Emphasis added.)
Further, between August 24, 2022, and September 6, 2023, TransUnion entered into three consulting agreements that prohibited individual contractors from voluntarily providing information about TransUnion’s business operations to government agencies and required that these contractors notify TransUnion of any legally compelled disclosure of such information. These agreements stated:
Consultant shall hold in confidence and shall not copy, publish, disseminate or otherwise use any confidential information it receives from [TransUnion] and/or any [TransUnion] Affiliate (as defined below in Section 13.3) by virtue of this Contract including but not limited to any such information Consultant received prior to the commencement of this Contract; provided however, that Consultant may use (but not copy, publish, disseminate nor use for any other purpose) any such confidential information solely to the extent necessary for Consultant’s performance under this Contract. Such obligations of confidentiality shall not apply to information (a) which Consultant can demonstrate, by its written records, was already in the possession of Consultant prior to the first date of disclosure by [TransUnion] and/or a [TransUnion] Affiliate; (b) which is now or becomes publicly known through no fault of Consultant; (c) which Consultant rightfully receives from third parties; (d) which by [TransUnion’s written authorization is approved for use or release by Consultant; or (e) which is required by law (i.e., an order of a court or data request from an administrative or governmental agency with competent jurisdiction) to be disclosed; provided however, that Consultant shall provide [TransUnion] at least ten (10) days prior written notice before the disclosure of such information pursuant to this Subparagraph (e).
(Emphasis added.)
Additional Notes About the Seven SEC Orders
It should be noted that in all 7 cases, the SEC pointed out the following:
Although the Commission is unaware of any instances in which [Company] took action to enforce these provisions or in which the affected individuals declined to speak with the Commission staff about potential violations of securities laws, these provisions created impediments to participation in the Commission’s whistleblower program by requiring individuals to forego either their right to file a complaint with the Commission staff or the financial award they might receive for doing so.
and
After being contacted by the Commission staff in connection with this matter, [Company] revised its internal agreement templates, adding language affirmatively advising employees and contractors that they are not prohibited from disclosing information to any governmental or regulatory authority, or collecting any related incentive awards. TransUnion also used reasonable efforts to notify the affected employees and contractors that their agreements do not in any way limit their ability to contact the Commission staff or to obtain an award in connection with information they provide.
So, it is clear that none of the seven companies were fined for actions they took to prevent employees or other insiders from reporting information to the SEC. In all seven cases, the companies were fined simply for having language in their employee agreements that discouraged or prevented employees or other insiders from reporting something should the situation arise.
Commonalities
It immediately becomes clear when going through those Orders that nearly identical text is found in the agreements used by all seven companies. In particular, the following text, which the SEC emphasized as violating the Whistleblower Protection Rule, can be found by several of the companies named in the SEC Orders:
“provided, however, that I disclaim and waive any right to share or participate in any monetary award resulting from the prosecution of such charge or investigation or proceeding.”
“To the extent permitted by law, [employee] agrees that if such an administrative claim is made, [employee] shall not be entitled to recover any individual monetary relief or other individual remedies.”
“However, to the fullest extent permitted by law, you agree that you are waiving the right to monetary damages or other equitable or monetary relief as a result of any charge, complaint, investigation, or proceeding”
We can take those phrases and do our own search in Edgar to see if any other companies not named in the SEC Orders are using the same language in their employment agreements and, thus, also violating the Whistleblower Protection Rule.
The Results
Our Edgar searches came up with the following results.
For the first phrase, “provided, however, that I disclaim and waive any right to share or participate in any monetary award resulting from the prosecution of such charge or investigation or proceeding.” we found the following Issuers that used that exact language in their employment agreements over the past 5 years (since September 2019) – please note that we have not verified whether any of these companies have since changed their employment agreements:
1. KORE Group Holdings, Inc. (KORE) – An Amended Employment Agreement filed as Exhibit 10.1 with its 8-K on November 23, 2021, a Separation Agreement (General Release) filed as Exhibit 10.1 with its Form 8-K on January 11, 2022, an Employment Agreement filed as Exhibit 10.1 with its Form 8-K on March 16, 2022, an Amended Employment Agreement filed as Exhibit 10.2 with its Form 8-K on March 16, 2022, an Amended Employment Agreement filed as Exhibit 10.3 with its Form 8-K on March 16, 2022, an Amended Employment Agreement filed as Exhibit 10.4 with its Form 8-K on March 16, 2022, an Employment Agreement filed as Exhibit 10.2 with a Form 8-K on June 14, 2023, an Employment Agreement filed as Exhibit 10.1 with its Form 8-K on July 8, 2024, an Employment General Release filed as an Exhibit 10.1 with its Form 10Q on August 14, 2024, an Employment Agreement filed as Exhibit 10.1 with its Form 8-K on August 15, 2024, and an Employment Agreement filed as Exhibit 10.2 with its Form 8-K on August 15, 2024.
2. Alight Inc. (ALIT) – An Amended Employment Agreement filed as Exhibit 10.1 with its Form 8-K on August 18, 2021, an Employment Agreement filed as Exhibit 10.2 with its Form 8-K on August 18, 2021, and an Employment General Release filed as Exhibit 10.22 with its Form 10-K on March 1, 2023.
3. Trinseo PLC (TSE) – A Separation Agreement filed as Exhibit 10.1 with its Form 8-K on October 2, 2019, a Separation Agreement filed as Exhibit 10.1 with its Form 8-K on April 15, 2020, an Employment Agreement filed as Exhibit 10.1 with its Form 8-K on May 8, 2020, an Employment Agreement filed as Exhibit 10.2 with its Form 10-Q on May 8, 2020, an Employment Agreement filed as Exhibit 10.2 with its Form 10-Q on May 5, 2021, a Separation Agreement filed as Exhibit 10.1 with its Form 8-K on October 27, 2021, an Amended Employment Agreement filed as Exhibit 10.2 with its Form 10-Q on November 8, 2021, an Amended Employment Agreement filed as Exhibit 10.2 with its Form 10-Q on May 5, 2022, an Employment Agreement filed as Exhibit 10.1 with its Form 8-K on May 5, 2023, a Separation Agreement filed as Exhibit 10.1 with its Form 8-K on July 20, 2023, and an Employment Agreement file as Exhibit 10.7 with its Form 10-Q on May 9, 2024.
4. Summit Hotel Properties, Inc (INN) – An Amended Employment Agreement filed as Exhibit 10.1 with its Form 8-K on December 22, 2020 and an Employee Release filed as Exhibit 10.1 with its Form 8-K on January 5, 2021.
5. Conns Inc. – An Employee General Release and Waiver filed as Exhibit 10.44 with its Form 10-K on March 31, 2021, an Employment Agreement filed as Exhibit 10.2 with its Form 8-K on August 5, 2021, and an Employment Agreement filed as Exhibit 10.2 with its Form 8-K on February 16, 2024.
6. Cyxtera Technologies, Inc. – A Retention Agreement filed as Exhibit 10.1 with its Form 8-K on May 1, 2023.
7. Phibro Animal Health Corp (PAHC) – A Severance Agreement filed as Exhibit 10.25 with its Form 8-K on February 9, 2022.
8. Express, Inc (EXPRQ) – A Separation Agreement filed as Exhibit 10.1 with its Form 8-K on September 11, 2023.
9. Leslie’s Inc. (LESL) – An Amended Employment Agreement filed as Exhibit 10.5 with its Form S-1/A on October 22, 2020 and a Succession Agreement filed as Exhibit 10.10 with its Form S-1/A on October 22, 2020.
10. NuScale Power Corporation (SMR) – An Amended Employment Agreement filed as Exhibit 10.14 with its Form 8-K on May 5, 2022, an Amended Employment Agreement filed as Exhibit 10.16 with its Form 8-K on May 5, 2022, an Executive Severance Policy (Waiver and Release) filed as Exhibit 10.19 with its Form 8-K on May 5, 2022 and an Employee Termination Agreement filed as Exhibit 10.18 with its Form S-1/A on June 14, 2022.
11. STR Sub Inc (formerly Falcon Minerals Corp) – A General Release and Separation Agreement filed as Exhibit 10.1 with its Form 8-K on June 28, 2021, an Employment Agreement filed as Exhibit 10.2 with its Form 8-K on June 28, 2021, and an Employment Agreement filed as Exhibit 10.3 with its Form 8-K on June 28, 2021..
12. InnovAge Holding Corp (INNV) – A Separation Letter Agreement filed as Exhibit 10.1 with its Form 8-K on January 3, 2022, an Employment Agreement filed as Exhibit 10.7 with its Form 10-K on September 13, 2022, and a Transition and Separation Agreement filed as Exhibit 10.2 with its Form 8-K on March 1, 2023.
13. Vistra Corp (VST) – A Transition and Advisory Agreement (Release) filed as Exhibit 10.1 with its Form 8-K on March 21, 2022.
14. EVgo Inc (EVGO) – An Employment Agreement filed as Exhibit 10.11 with its Form 8-K on July 8, 2021, an Employment Agreement filed as Exhibit 10.12 with its Form 8-K on July 8, 2021, an Employment Agreement filed as Exhibit 10.13 with its Form 8-K on July 8, 2021, an Employment Agreement filed as Exhibit 10.15 with its Form 10-K on March 30, 2023, a Separation Agreement (General Release) filed as Exhibit 10.1 with its Form 8-K on August 2, 2023, an Employment Agreement filed as Exhibit 10.2 with its Form 8-K on August 2, 2023, and an Amended Employment Agreement filed as Exhibit 10.1 with its Form 8-K on January 17, 2024.
15. Farmland Partners Inc (FPI) – An Employment Agreement filed as Exhibit 10.1 with its Form 8-K on June 2, 2021, an Employment Agreement filed as Exhibit 10.1 with its Form 8-K on October 12, 2021, and an Employee Separation Agreement (General Release) filed as Exhibit 10.1 with its Form 8-K on May 28, 2024.
16. Frontier Communications Parent, Inc. (FYBR) – An Employment Agreement filed as Exhibit 10.1 with its Form 8-K on December 3, 2019, an Employment Agreement filed as Exhibit 99.1 with its Form 8-K on February 18, 2021, an Employment Agreement filed as Exhibit 10.6 with its Form 10-Q on August 5, 2021, an Employment Agreement filed as Exhibit 10.7 with its Form 10-Q on August 5, 2021, an Employment Agreement filed as Exhibit 10.8 with its form 10-Q on August 5, 2021, an Employee Transition Agreement (General Release) filed as Exhibit 10.9 with its Form 8-K on August 5, 2021, an Employment Agreement filed as Exhibit 10.11 with its Form 8-K on February 25, 2022, and an Employment Agreement filed as Exhibit 10.12 with its Form 8-K on February 25, 2022.
17. Turtle Beach Corp (HEAR) – An Employee Separation Letter filed as Exhibit 10.1 with its Form 8-K on May 3, 2023 and an Employment Agreement filed as Exhibit 10.5 with its Form 8-K on March 18, 2024.
18. Amplify Energy Corp (AMPY) – A Transition and Separation Agreement (Release of Claims) filed as Exhibit 10.3 with its Form 8-K on May 5, 2023.
19. Mama’s Creations Inc. (MAMA) – formerly MamaMancini’s Holdings, Inc. – An Employment Agreement filed as Exhibit 10.2 with its Form 10-Q on June 13, 2023 and an Employment Agreement filed as Exhibit 10.3 with its Form 10-Q on June 13, 2023.
20. Ruths Hospitality Group, Inc.– An Employment Agreement filed as Exhibit 10.1 with its Form 10-Q on August 5, 2022, an Employment Agreement filed as Exhibit 10.2 with its Form 10-Q on August 5, 2022, an Employment Agreement filed as Exhibit 10.3 with its Form 10-Q on August 5, 2022, an Employment Agreement filed as Exhibit 10.4 with its Form 10-Q on August 5, 2022, and an Employment Agreement filed as Exhibit 10.24 with its Form 10-K on February 23, 2023.
21. BRB Foods – An Employment Agreement filed as Exhibit 10.9 with its Form S-1 on January 17, 2024, an Employment Agreement filed as Exhibit 10.10 with its Form S-1 on January 17, 2024 and an Employment Agreement filed as Exhibit 10.11 with its Form S-1 on January 17, 2024.
22. Vinebrook Homes Trust Inc – A Severance Agreement filed as Exhibit 10.11 with its Form 8-K on August 4, 2023.
23. Herc Holdings Inc. (HRI) – A Separation Agreement (General Release and Waiver) filed as Exhibit 10.11.4 with its Form 10-K on February 27, 2020.
24. Option Care Health Inc (OPCH) – An Employment Agreement filed as Exhibit 10.13 with its Form 10-K on March 11, 2021.
25. EVO Payments Inc – An Employment Agreement filed as Exhibit 10.32 with its Form 10-K on February 27, 2020, an Amended Employment Agreement filed as Exhibit 10.33 with its Form 10-K on February 27, 2020, and an Employment Agreement filed as Exhibit 10.34 with its Form 10-K on February 27, 2020.
26. Willis Towers Watson Public Limited Company (WTW) – An Employment Agreement filed as Exhibit 10.45 with its Form 10-K on February 24, 2022.
27. Sow Good Inc. (SOWG) – An Employment Agreement filed as Exhibit 10.1 with its Form 8-K on January 4, 2021, an Employment Agreement filed as Exhibit 10.1 with its Form 8-K on January 11, 2024, and an Employment Agreement filed as Exhibit 10.1 with its Form 8-K on April 15, 2024.
28. Roivant Sciences Ltd. (ROIV) – An Amended Employment Agreement filed as Exhibit 10.27 with its S-4 on May 14, 2021.
29. DMK Pharmaceuticals Corporation (DMKPQ), formerly Adamis Pharmaceuticals Corp – An Employment Agreement filed as Exhibit 10.2 with its Form 8-K on May 19, 2022, an Employment Agreement filed as Exhibit 10.1 with its Form 8-K on June 24, 2022, an Employment Agreement filed as Exhibit 10.1 with its Form 8-K on August 29, 2023, an Employment Agreement filed as Exhibit 10.1 with its Form 8-K on October 19, 2023, an Employment Agreement filed as Exhibit 10.2 with its Form 8-K on October 19, 2023, and an Employment Agreement filed as Exhibit 10.7 with its Form 10-Q on November 14, 2023.
30. Ladder Capital Corp (LADR) – An Employment Agreement filed as Exhibit 10.1 with its Form 8-K on February 12, 2021 and an Amended Employment Agreement filed as Exhibit 10.1 with its Form 8-K on June 16, 2023.
31. iHeartMedia Inc (IHRT) – An Amended Employment Agreement filed as Exhibit 10.1 with its Form 8-K on March 29, 2022, an Amended Employment Agreement filed as Exhibit 10.2 with its Form 8-K on March 29, 2022, and an Employment Agreement filed as Exhibit 10.2 with its Form 8-K on June 16, 2023.
32. Vicapsys Life Sciences, Inc. (VICP) – An Employment Agreement filed as Exhibit 10.1 with its Form 8-K on January 12, 2024.
33. Vince Holding Corp (VNCE) – An Employment Agreement filed as Exhibit 10.45 with its Form 10-K on April 30, 2021.
34. Hamilton Insurance Group Ltd (HG) – an Amended Employment Agreement filed as Exhibit 10.6 with its Form S-1 on October 16, 2023.
35. PaxMedica, Inc. (PXMD) – an Employment Agreement filed as Exhibit 10.23 with its Form S-1 on November 19, 2023.
36. Broad Street Realty Inc (BRST) – An Employment Agreement filed as Exhibit 10.15 with its Form 8-K on December 27, 2019 and an Employment Agreement filed as Exhibit 10.16 with its Form 8-K on December 27, 2019.
37. Masonite International Corp – an Amended Employment Agreement filed as Exhibit 10.2 with its Form 8-K on January 4, 2022, an Amended Employment Agreement filed as Exhibit 10.3 with its Form 8-K on January 4, 2022, an Amended Employment Agreement filed as Exhibit 10.4 with its Form 8-K on January 4, 2022, and an Amended Employment Agreement field as Exhibit 10.5.E with its Form 8-K on February 24, 2022, an Employment Agreement filed as Exhibit 10.5.F with its Form 10-K on February 28, 2023.
38. The Andersons, Inc. (ANDE) – an Employment Agreement filed as Exhibit 10.04 with its Form 10-K on February 23, 2023.
39. Allarity Therapeutics Inc (ALLR) – an Employment Agreement filed as Exhibit 10.1 with its Form 8-K on December 10, 2021, an Employment Agreement filed as Exhibit 10.2 with its Form 8-K on December 10, 2021, an Employment Agreement filed as Exhibit 10.3 with its Form 8-K on December 10, 2021, an Employment Agreement filed as Exhibit 10.1 with its Form 8-K on January 19, 2023, and an Employment Agreement filed as Exhibit 10.2 with its Form 8-K on January 19, 2023.
40. Spirit Realty Capital, Inc. – An Amended Employment Agreement filed as Exhibit 10.13 with its Form 8-K on February 25, 2020, an Amended Employment Agreement filed as Exhibit 10.1 with its Form 8-K on March 2, 2020, and an Amended Employment Agreement filed as Exhibit 10.1 with its Form 8-K on January 25, 2022 and an Employment Agreement filed as Exhibit 10.2 with its Form 8-K on January 25, 2022.
41. Independence Realty Trust, Inc. (IRT) – An Employment Agreement filed as Exhibit 10.22 with its Form 10-K on February 24, 2022.
42. Diamond Offshore Drilling, Inc. – An Employment Agreement filed as Exhibit 10.1 with its Form 8-K on May 13, 2021.
43. Sila Realty Trust Inc. (SILA) – formerly Carter Validus Mission Critical REIT II, Inc. – An Employment Agreement filed as Exhibit 10.1 with its Form 8-K on July 29, 2020 and an Employment Agreement filed as Exhibit 10.2 with its Form 8-K on July 29, 2020.
44. Hornbeck Offshore Services Inc – An Amended Employment Agreement filed as Exhibit 10.6 with its Form S-1 on December 7, 2023, an Amended Employment Agreement filed as Exhibit 10.7 with its Form S-1 on December 7, 2023, an Amended Employment Agreement filed as Exhibit 10.8 with its Form S-1 on December 7, 2023, an Amended Employment Agreement filed as Exhibit 10.9 with its Form S-1 on December 7, 2023, and an Amended Employment Agreement filed as Exhibit 10.10 with its Form S-1 on December 7, 2023.
45. Commercial Vehicle Group, Inc. (CVGI) – an Employment Agreement filed as Exhibit 10.1 with its Form 8-K on September 11, 2020.
46. Price (T.) Rowe Group Inc (TROW) – An Employment Agreement filed as Exhibit 10.24 with its Form 10-K on February 24, 2022.
47. Thryv Holdings Inc (THRY) – An Amended Employment Agreement filed as Exhibit 10.1 with its Draft Registration Statement on June 23, 2020 and an Amended Employment Agreement filed as Exhibit 10.1 with its Form S-1 on September 1, 2020.
48. Custom Truck One Source, Inc. (CTOS) – An Employment Agreement filed as Exhibit 10.1 with its Form 8-K on December 8, 2021, an Employment Agreement filed as Exhibit 10.2 with its Form 8-K on December 8, 2021, an Employment Agreement filed as Exhibit 10.15 with its Form 10-K on March 16, 2022, an Employment Agreement filed as Exhibit 10.16 with its Form 10-K on March 16, 2022, an Employment Agreement filed as Exhibit 10.2 with its Form 8-K on April 26, 2022, an Employment Agreement filed as Exhibit 10.1 with its Form 8-K on August 4, 2022, an Amended Employment Agreement filed as Exhibit 10.1 with its Form 8-K on December 7, 2022, an Amended Employment Agreement filed as Exhibit 10.2 with its Form 8-K on December 7, 2022, and an Employment Agreement filed as Exhibit 10.1 with its Form 8-K on November 7, 2023.
49. Traeger, Inc. (COOK) – formerly TGPX Holdings I LLC – An Amended Employment Agreement filed as Exhibit 10.2 with its Draft Registration Statement on June 10, 2021 and an Amended Employment Agreement filed as Exhibit 10.4 with its Form S-1 on July 6, 2021.
50. Forward Air Corp (FWRD) – An Executive Severance and Change of Control Plan filed as Exhibit 10.38 with its Form 10-K on March 1, 2022.
51. Soluna Holdings, Inc (SLNH) – An Employment Agreement filed as Exhibit 10.1 with its Form 8-K on January 21, 2022.
For the 2nd phrase, “To the extent permitted by law, [employee] agrees that if such an administrative claim is made, [employee] shall not be entitled to recover any individual monetary relief or other individual remedies.” we found the following issuers that used that exact language in their employment agreements over the past 5 years (since September 2019) – please note that we have not verified whether any of these companies have since changed their employment agreements:
1. Clene Inc. (CLNN) – A Separation Agreement and General Release filed as Exhibit 10.2 with its Form 8-K on February 2, 2022.
2. Tupperware Brands Corp (TUP) – A Separation Agreement filed as Exhibit 10.2 with its Form 8-K on November 14, 2019.
3. Murphy USA Inc (MUSA) – A Retirement Agreement filed as Exhibit 10.1 with its Form 10-Q on October 28, 2021.
4. Innodata Inc (INOD) – A Separation Agreement filed as Exhibit 10.2 with its Form 8-K on October 8, 2020.
5. CURO Group Holdings Inc. – A Separation Agreement filed as Exhibit 10.3 with its Form 10-Q on July 28, 2021.
6. Amerant Bancorp Inc (AMTB) – A Separation Agreement filed as Exhibit 10.1 with its Form 8-K/A on March 10, 2023.
7. MusclePharm Corp (MSLPQ) – A Severance and Release Agreement filed as Exhibit 10.1 with its Form 8-A on May 7, 2020.
8. Monro, Inc. (MNRO) – A Separation and General Release Agreement filed as Exhibit 10.72B with its Form 10-K on May 28, 2024.
9. Noodles & Co (NDLS) – A Separation Letter filed as Exhibit 10.1 with its Form 10-Q on November 8, 2019.
10. Veeco Instruments, Inc (VECO) – A Separation Agreement filed as Exhibit 10.1 with its Form 10-Q on August 3, 2010 and a Separation Agreement filed as Exhibit 10.2 with its Form 10-Q on August 3, 2020.
11. Masco Corp (MAS) – A Separation Agreement filed as Exhibit 10 with its Form 10-Q on October 30, 2019, a Severance Agreement filed as Exhibit 10.B with its Form 10-Q on April 29, 2020, a Severance Agreement filed as Exhibit 10.A with its Form 10-Q on July 27, 2023, a Severance Agreement filed as Exhibit 10.C with its Form 10-Q on July 27, 2023, an Amended Transition and Severance Agreement filed as Exhibit 10.B with its Form 10-Q on October 26, 2023, and a Severance Agreement filed as Exhibit 10.L with its Form 10-K on February 8, 2024.
12. Sensata Technologies Holdings plc (ST) – A Separation Agreement filed as Exhibit 10.1 with its Form 8-K on August 3, 2020, a Separation Agreement filed as Exhibit 10.1 with its Form 8-K/A on August 5, 2020, a Separation Agreement filed as Exhibit 10.6 with its Form 10Q on May 2, 2023, a Separation Agreement filed as Exhibit 10.1 with its Form 8-K on March 17, 2023, an Amended Employment Agreement filed as Exhibit 10.1 with its Form 8-K on October 31, 2023, a Severance Agreement filed as Exhibit 10.K with its Form 10-K on February 8, 2024, and a Retirement Agreement filed as Exhibit 10.6 with its Form 10-Q on April 29, 2024.
13. Vireo Growth Inc (VREOF) – formerly Goodness Growth Holdings, Inc. – A Separation Agreement filed as Exhibit 10.49 with its Form 10-Q on November 14, 2023 and a Separation Agreement filed as Exhibit 10.49 with its 424B3 (Prospectus) on December 7, 2023.
14. Bryn Recourses, Inc. (BRYN) – A Separation Agreement filed as Exhibit 10.1 with its Form 8-K on March 9, 2022.
15. CECO Environmental Corp (CECO) – A Separation Agreement filed as Exhibit 10.1 with its Form 10-Q on November 7, 2023.
16. TD Synnex Corp (SNX) – A Severance Agreement filed as Exhibit 10.1 with its Form 10-Q on October 30, 2019.
17. Carriage Services Inc (CSV) – A Transition Agreement filed as Exhibit 99.2 with its Form 8-K on February 22, 2024.
18. Verisk Analytics, Inc. (VRSK) – A Transition and Consulting Agreement filed as Exhibit 10.2 with its Form 10-Q on August 2, 2022, a Separation Agreement filed as Exhibit 10.1 with its Form 8-K on December 30, 2022, and a Restated Separation Agreement filed as Exhibit 10.1 with its Form 10-K on February 23, 2021.
19. Acadia Research Corp (ACTG) – A Separation Agreement filed as Exhibit 10.1 with its Form 10-K on March 17, 2023.
20. GreenSky Inc – A Separation Agreement filed as Exhibit 10.1 with its Form 10-Q on May 5, 2021.
21. ScanSource Inc (SCSC) – A Separation Agreement filed as Exhibit 10.1 with its Form 8-K on September 26, 2023.
22. vTv Therapeutics Inc (VTVT) – A Retirement Agreement filed as Exhibit 10.1 with its Form 8-K on October 20, 2021 and a Separation Agreement filed as Exhibit 10.1 with its Form 8-K on December 2, 2021.
23. Zivo Bioscience, Inc. (ZIVO) – An Amended Employment Agreement filed as Exhibit 10.33 with its Form 10-K on March 26, 2020, an Employment Letter filed as Exhibit 10.35 with its Form 10-K on March 26, 2020, an Employment Letter filed as Exhibit 10.1 with its Form 8-K on January 7, 2021, and a Transition and Release Agreement filed as Exhibit 10.2 with its Form 8-K on January 7, 2021.
24. Navidea Biopharmaceuticals Inc (NAVB) – A Separation Agreement filed as Exhibit 10.1 with its Form 8-K on November 26, 2021.
25. Sanmina Corp (SANM) – A Separation and Release Agreement filed as Exhibit 10.36 with its Form 10-K on November 13, 2020.
26. William Penn Bancorporation (WMPN) – A Separation and Release Agreement filed as Exhibit 10.5 with its Form 10-K on September 15, 2021.
27. Tri Point Homes, Inc (TPH) – A Separation Agreement filed as Exhibit 10.19 with its Form 10-K on February 19, 2020.
28. Ultaragenyx Pharmaceutical Inc (RARE) – A Separation Agreement filed as Exhibit 10.1 with its Form 8-K on November 25, 2019 and a Transition Agreement filed as Exhibit 10.1 with its Form 8-K on March 6, 2020.
29. Heartbeam, Inc (BEAT) – An Employment Agreement filed as Exhibit 99.E.17 with its Form SC14D9 on December 23, 2020.
30. WM Technology, Inc. (MAPS) – An Advisor Agreement filed as Exhibit 10.17 with its Form 8-K on June 22, 2021, a Separation Agreement filed as Exhibit 10.36 with its Form 8-K on March 6, 2023, a Separation and Release Agreement filed as Exhibit 10.16 with its Form 10-K on March 16, 2023, a Separation and Release Agreement filed as Exhibit 10.17 with its Form 10-K on March 16, 2023, and a Separation Agreement filed as Exhibit 10.225 with its Form 10-K on February 28, 2024.
31. Universal Health Services, Inc. (UHS) – A Separation Agreement filed as Exhibit 99.1 with its Form 8-K/A on December 7, 2022 and an Employment Agreement filed as Exhibit 10.66 with its Form 10-K on February 27, 2023.
32. Global Industrial Co (GIC) – A Retirement Agreement filed as Exhibit 10.21 with its Form 10-K on March 18, 2021 and a Separation Agreement filed as Exhibit 10.1 with its Form 10-Q on November 4, 2021.
33. Northfield Bancorp, Inc. (NFBK) – A Transition Consulting Agreement filed as Exhibit 10.1 with its Form 8-K on August 3, 2020.
34. Phunware, Inc. (PHUN) – A Transition, Consulting, and General Release Agreement filed as Exhibit 10.1 with its Form 8-K on December 16, 2022, a Transition, Consulting, and General Release Agreement filed as Exhibit 10.1 with its Form 8-K on June 8, 2023, and a Transition, Consulting, and General Release Agreement filed as Exhibit 10.1 with its Form 8-K on October 26, 2023.
35. Vireo Growth Inc. (VREOF) – formerly Viero Health International Inc. – A Separation Agreement filed as Exhibit 10.9 with its Form 10-12G/A on December 22, 2020.
36. Community West Bancshares (CWBC) – formerly Central Valley Community Bancorp – An Employment Agreement filed as Exhibit 99.2 with its Form 8-K on September 9, 2020, a Transition Agreement filed as Exhibit 10.1 with its Form 8-K on October 5, 2022, an Employment Agreement filed as Exhibit 10.1 with its Form 8-K on April 3, 2024, an Employment Agreement filed as Exhibit 10.2 with its Form 8-K on April 3, 2024, an Employment Agreement files as Exhibit 10.3 with its Form 8-K on April 3, 2024, an Employment Agreement filed as Exhibit 10.4 with its Form 8-K on April 3, 2024, an Employment Agreement filed as Exhibit 10.5 with its Form 8-K on April 3, 2024, an Employment Agreement filed as Exhibit 10.6 with its Form 8-K on April 3, 2024, an Employment Agreement filed as Exhibit 10.7 with its Form 8-K on April 3, 2024, an Employment Agreement filed as Exhibit 10.8 with its Form 8-K on April 3, 2024, and an Employment Agreement filed as Exhibit 10.9 with its Form 8-K on April 3, 2024.
37. AMC Networks Inc (AMCX) – A Termination Agreement filed as Exhibit 10.4 with its Form 10-Q on November 5, 2021.
38. Talphera Inc. (TLPH) – formerly Acelrx Pharmaceuticals Inc. – A Transition Agreement filed as Exhibit 10.1 with its Form 8-K on April 8, 2020.
39. Light & Wonder, Inc. (LNW) – formerly Scientific Games Corp – An Amended Employment Agreement filed as Exhibit 10.4 with its Form 10-Q on July 23, 2020 and a Change in Control Protection Plan filed as Exhibit 10.1 with its Form 8-K on August 25, 2020.
40. Kaman Corp – A Release Agreement filed as Exhibit 10.30 with its Form 10-K on February 24, 2020 and a Separation Agreement filed as Exhibit 10.4 with its Form 10-Q on August 4, 2022.
41. The Glimpse Group Inc (VRAR) – An Employment Agreement filed as Exhibit 10.25 with its Form S-1/A on June 14, 2021, an Employment Agreement filed as Exhibit 10.26 with its Form S-1/A on June 14, 2021, an Employment Agreement filed as Exhibit 10.1 with its Form 8-K on February 1, 2022, and an Employment Agreement filed as Exhibit 10.1 with its Form 8-K on August 2, 2022.
42. Americold Realty Trust (COLD) – An Employment Agreement filed as Exhibit 10.1 with its Form 10-Q on November 5, 2021 and a Severance Plan filed as Exhibit 10.2 with its Form 8-K on February 24, 2022.
For the 3rd phrase, “However, to the fullest extent permitted by law, you agree that you are waiving the right to monetary damages or other equitable or monetary relief as a result of any charge, complaint, investigation, or proceeding” we found the following Issuers that used that exact language in their employment agreements over the past 5 years (since September 2019) – please note that we have not verified whether any of these companies have since changed their employment agreements:
1. Cuentes Inc. (CUEN) – An Employee Separation Agreement filed as Exhibit 10.1 with its Form 8-K on August 24, 2022.
2. Crinetics Pharmaceuticals, Inc. (CRNX) – A Consulting Agreement filed as Exhibit 10.3 with its Form 10-Q on May 12, 2022.
** Please Note: We are not accusing any of the issues above of violating the Whistleblower Protection Rule. We are simply pointing out they made filings that copied the same language used by the Issuers named in the SEC Orders that the SEC says “discourages or prevents employees or other insiders from reporting something should the situation arise.”
To speak with a Securities Attorney, please contact Brenda Hamilton at 200 E Palmetto Park Rd, Suite 103, Boca Raton, Florida, (561) 416-8956, or by email at [email protected]. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
Hamilton & Associates | Securities Attorneys
Brenda Hamilton, Securities Attorney
200 E Palmetto Park Rd, Suite 103
Boca Raton, Florida 33432
Telephone: (561) 416-8956
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www.SecuritiesLawyer101.com
