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Caught Between a Rock and a Hard Place: #MeToo Movement Creates Challenges for Directors

The #MeToo movement continues to make headlines across the globe, toppling more than 200 powerful U.S. company leaders in entertainment, media, sports and a variety of other industries.  According to EEOC reports, sexual harassment charges have increased by 14% and EEOC-filed lawsuits asserting harassment have increased by 50%.  Larger amounts of cash are being paid to settle harassment suits, and those amounts may be minor compared to the reputational damage of being tried in the court of public opinion.

Directors have long grappled with how to oversee company “culture” and employee behaviors.  Now many boards find themselves wedged between a rock and a hard place, as they struggle to balance the need for swift action when a complaint is made versus the need for appropriate due process rights for the accused.

Boards increasingly are expected to investigate stale and non-actionable claims and off-duty conduct.  They are also expected to treat wrongdoers swiftly and severely.  Employees and stockholders push for transparency in investigations, as boards temper the need for transparency with the risks of defamation, tort or other claims that may be brought by the accused, as well as personal privacy rights when dealing with controversial, off-duty conduct.

The potential unintended consequence of polarizing genders also must be monitored by the board.  Recent research found that two-thirds of male executives hesitate to hold one-on-one meetings with women in more junior positions for fear they could be misconstrued.  This behavior effectively deprives one gender of valuable mentorship and opportunities to interact with

Supreme Court Narrowly Construes the Definition of a Whistleblower Under Dodd-Frank

The Supreme Court held that an individual must report alleged wrongdoing to the Securities and Exchange Commission in order to qualify for protection from whistleblower retaliation under the Dodd-Frank Act.

Click here to read the Alert written by Bryan Cave attorneys on 2/21/18.

For more information about the SEC Whistleblower Program, click here. For more information about this update, or if you have any questions regarding Bryan Cave’s White Collar Defense and Investigations or Securities Litigation and Enforcement Groups, contact Mark Srere or Jennifer Mammen in Washington, D.C., at +1 202-508-6000, or for Bryan Cave’s Labor and Employment group, contact Elaine Koch or Jennifer Berhorst in Kansas City, MO, at +1 816-374-3200.

SEC Announces More than $20 Million in Whistleblower Awards

In the course of one week, the United States Securities and Exchange Commission announced awards to three whistleblowers totaling more than $20 million under the Dodd-Frank Whistleblower Program.

On November 30, the SEC announced awards of more than $8 million each to two whistleblowers. The first individual alerted the agency to conduct that became the subject of an enforcement action and continued to provide additional information throughout the investigation, while the second whistleblower provided information that allowed the agency to understand and asses the implications of the misconduct. Under the Whistleblower Program, eligible whistleblowers may receive awards of between 10% and 30% of the sanctions collected in actions brought by the SEC and related actions brought by other authorities. To maintain the confidentiality of the individual whistleblower, the SEC does not release information regarding the target of the investigation or the percentages of awards granted to the whistleblowers, but in the Notice of Covered Action it did note that in cases in which more than one whistleblower receives an award, the combined awards cannot exceed 30% of the recovery. Seven other individuals submitted unsuccessful applications for whistleblower awards related to that enforcement.

Less than one week later, the SEC announced an award of more than $4.1 million to a foreign national working outside of the United State who reported information regarding a multi-year, widespread securities violation. In announcing the award, Jane Norberg, Chief of the SEC’s Office of the Whistleblower noted that the whistleblower was a former company insider and

$2.5 Million SEC Whistleblower Award Goes to Government Employee

July 28, 2017

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On July 25, 2017, the SEC announced another whistleblower award — this one for almost $2.5 million. What sets this award apart from earlier awards is its recipient — “an employee of a domestic government agency.” The Order spends more words in its footnote explaining why a government employee is entitled to a whistleblower award than the Order does in discussing the substantive award itself.

Click here to read the Alert in full.

Bryan Cave LLP has a team of knowledgeable lawyers and other professionals prepared to help employers understand the SEC Whistleblower Program. If you or your organization would like more information on this or any other employment issue, please contact an attorney in the Labor and Employment practice group.

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