Since the Supreme Court’s decision in Dobbs v. Jackson Women’s Health Organization, state legislatures across the country have accelerated their discussion of new laws either restricting or further protecting access to abortions. A state senate bill in South Carolina, S. 1373 currently pending in the Senate Committee on Medical Affairs, would not only ban almost all abortions in that state, but would also afford novel whistleblower protections. Specifically, S. 1373 imposes criminal penalties, punishable by imprisonment for ten years, for persons who “take any action to impede a whistleblower from communicating about a violation of this article with the Attorney General, a solicitor, or any other person authorized to bring an action in violation of this article.”
Exchange Act Rule 21F-17, adopted in 2011 under the auspices of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, prohibits any person from taking any action to impede an individual from communicating directly with the SEC, including by “enforcing, or threatening to enforce, a confidentiality agreement . . . .” The SEC has prioritized enforcing this rule expansively, by requiring employers to provide SEC-specific carveouts to policies and agreements governing confidentiality. According to an Order issued last week against The Brink’s Company ( “Brink’s” or “Brinks”), the SEC seems to suggest that employers must provide a specific carveout in restrictive covenant agreements permitting employees and former employees to report information to the SEC in addition to the statutory disclosure provided for in the federal Defend Trade Secrets Act (DTSA).
The Supreme Court’s January 24, 2022 decision in Hughes v. Northwestern University, has caused alarm in some corners, with panicked predictions of a proliferation of ERISA suits alleging that defined contribution plans provided imprudent investment options. However, Hughes should be more properly understood as rejecting an attempt by the U.S. Court of Appeals for the Seventh Circuit to impose a novel limit on excessive fee suits. The Supreme Court instead emphasized the application of its existing precedent in Tibble v. Edison International, 575 U.S. 523 (2015).
The Seventh Circuit had dismissed a class action complaint alleging the trustees of Northwestern Universities’ retirement plans breached their fiduciary duties by including imprudent investments among the investment options offered under the plans. The trustees offered more than 400 various investment options, several of which the plaintiffs asserted were imprudent and many of which were not. The Seventh Circuit held that the plaintiffs’ allegations failed as a matter of law (that is, could be dismissed without discovery or trial) because plaintiff’s preferred investment options were available under the plan (albeit alongside the allegedly imprudent options). Therefore, the Seventh Circuit considered the trustees to be blameless for any fiduciary breaches because the plaintiffs simply could have avoided the allegedly imprudent investments and chosen the prudent ones.
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