SEC Targets Illegal Severance Agreements

Atlanta-based BlueLinx Holdings Inc. broke the law when it required outgoing employees to waive their rights, the Securities and Exchange Commission ruled this week. The company included a monetary-recovery provision in its severance agreements that said departing employees waived possible whistleblower awards if they complain to the SEC, or risk losing their severance payments and other benefits. The agreement violates a SEC rule that prohibits any action to impede communicating with the agency about potential wrongdoing. BlueLinx agreed to pay a $265,000 penalty, amend its severance agreements, and inform former employees who signed similar agreements – but the firm won’t admit any wrongdoing.