Apple In Spotlight Over Employee NDAs

whistleblower leak gag security © Villiers Steyn shutterstock

Former Apple engineer filed whistleblower complaint with US financial regulator over nondisclosure agreement (NDA) attempt

Apple is in the spotlight this week over the strict nondisclosure and non-disparagement agreements it allegedly reaches with staff who leave the tech giant.

Business Insider this week reported on Cher Scarlett, a former Apple engineer who has filed a SEC whistleblower complaint against the iPhone maker.

Scarlett pointed out that on 18 October Apple made a response to the US Securities and Exchange Commission (SEC) that it doesn’t silence employees regarding workplace harassment or discrimination.

Apple’s new headquarters in Cupertino


NDA issue

Apple’s response to the SEC, had come after Apple investor Nia Impact Capital in September had filed a shareholder proposal calling for Apple’s board to prepare a “public report assessing the potential risks to the company associated with its use of concealment clauses in the context of harassment, discrimination and other unlawful acts.”

Apple in October filed its response to the SEC, and essentially said it wanted to exclude the proposal because “the company’s policy is to not use such clauses.”

Lawyers for Apple also reportedly argued the company had already addressed the concerns of activist shareholders.

After viewing Apple’s response, Scarlett filed a whistleblower complaint with the SEC, alleging that Apple had made false and misleading statements to the regulator.

She also shared documents with Nia Impact Capital.

Scarlett officially left Apple last week, and said she decided to go public by speaking to Business Insider this week, in violation of the terms of her settlement with Apple.

She alleged that lawyers for Apple had spelled out precisely what they wanted Scarlett to say following her recent departure from the company, limiting her words to only: “After 18 months at Apple, I’ve decided it is time to move on and pursue other opportunities.”

“I was shocked,” said Scarlett. “In my mind, I should be able to say whatever I want as long as I’m not defaming Apple.”

Scarlett is should be noted had reportedly spent months working to improve pay equity at Apple.

She alleged this activity prompted harassment from her work colleagues, and intimidation from the company.

SEC complaint

Scarlett reportedly declined to sign Apple’s gag order.

The whistleblower complaint filed by Scarlett, which Business Insider has reviewed, details what Scarlett alleges are “false statements or misleading statements” by Apple to the regulator.

Scarlett included a copy of the settlement agreement Apple offered her in her SEC complaint.

She also reportedly described how the company included a “statement I was allowed to say about my leaving the company being a personal decision, rather than fleeing a hostile work environment after attempting to exercise my rights and help others organize” under federal labour laws.

Apple’s stance

Apple did not immediately respond to a request for comment from Business Insider.

However Apple last week posted an internal memo to staff members, affirming their right to openly discuss pay and working conditions.

“Our policies do not restrict employees from speaking freely about their wages, hours, or working conditions,” the memo seen by NBC news reads.

NDA clampdown

Meanwhile Reuters has reported that Scarlett’s SEC complaint inspired draft legislation in Washington state that seeks to restrict companies’ use of NDAs in settlements of workplace harassment and discrimination claims.

The draft legislation in Washington States comes on the heels of a similar law in California, Reuters reported.

Washington state Senator Karen Keiser and Representative Liz Berry, both Democrats, are working on bills in their respective houses, which they plan to introduce in the next legislative session, their offices confirmed this week.

“No worker should be silenced from sharing their deeply personal story of harassment or discrimination in the workplace just because they signed an NDA,” Berry said in a statement to Reuters.