Nondisclosure Agreements Can’t Block Whistleblowers, CFPB Says

Companies can’t use nondisclosure agreements to block whistleblowers from providing information to regulators, the Consumer Financial Protection Bureau warned.

Nondisclosure agreements are appropriate to protect confidential trade secrets and other information, but companies should include language in the agreements allowing employees to report wrongdoing to regulators, including the CFPB, the agency said in a Wednesday circular to the companies it regulates.

“The law enforcement community uncovers serious wrongdoing by financial firms through whistleblower tips,” CFPB Director Rohit Chopra said in a statement. “Companies should not censor or muzzle employees through nondisclosure agreements that deter whistleblowers from coming forward to law ...