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ARTICLE · 18 AUGUST 2016

SEC Continues To Scrutinize Separation Agreements

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On August 16, 2016, the SEC announced that Health Net Inc. (Company) agreed to pay a $340,000 penalty to settle charges that it violated Rule 21F-17 by using severance agreements that allegedly prohibited its employees from receiving whistleblower awards from the SEC.

United StatesEmployment and HR
Lloyd Chinn
Lloyd Chinn
Harris Mufson
Harris Mufson
Esther Pak
Esther Pak
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On August 16, 2016, the SEC announced that Health Net Inc. (Company) agreed to pay a $340,000 penalty to settle charges that it violated Rule 21F-17 by using severance agreements that allegedly prohibited its employees from receiving whistleblower awards from the SEC.

The SEC alleged that the Company violated federal securities laws by requiring its employees to sign severance agreements in which employees waived their rights to file applications for, or accept, whistleblower awards from the SEC. In June 2013, the Company amended the Waiver and Release of Claims in its severance agreements, removing the language that required employees to waive "the right to file an application for award for original information submitted pursuant to Section 21F of the Securities Exchange Act of 1934."  However, it retained language that prohibited employees from receiving monetary recovery for reporting information to "any federal, state or local government agency or department"

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