The SEC this week settled an enforcement action for whistleblower award waivers in employee agreements.

Health Net Inc employee agreements waived the employees’ rights to any whistleblower award to which they may be entitled under the Exchange Act. The SEC found that by including such provisions the firm “directly targeted the SEC’s whistleblower program by removing the critically important financial incentives that are intended to encourage persons to communicate directly with the Commission staff about possible securities law violations.” In so doing, the firm violated Exchange Act Rule 21F-17, which prohibits impeding communication with the SEC about possible securities law violations.

This enforcement action follows last week’s enforcement action for confidentiality provisions without a whistleblower carveout in employee agreements. It is at least the fourth action this year against listed companies for impeding potential whistleblowers through provisions in employee agreements.