The Securities and Exchange Commission (SEC) fined engineering firm KBR Inc. for whistleblowing violations.

The US firm violated whistleblower protection Rule 21F-17 enacted under the Dodd-Frank Act. In certain internal investigations, KBR made its employees sign confidentiality statements, with warnings that they could face discipline and even be fired if they discussed the matters with outside parties without the prior approval of KBR’s legal department.

Since these investigations included allegations of possible securities law violations, the SEC found that these terms violated whistleblower protection rules, which prohibits companies from taking any action to impede whistleblowers from reporting possible securities violations to the SEC.

KBR is to pay a $130,000 penalty to settle the SEC’s charges and the company voluntarily amended its confidentiality statement by adding language making clear that employees are free to report possible violations to the SEC and other federal agencies without KBR approval or fear of retaliation.

Director of the SEC’s Division of Enforcement Andrew J. Ceresney said: ‘By requiring its employees and former employees to sign confidentiality agreements imposing pre-notification requirements before contacting the SEC, KBR potentially discouraged employees from reporting securities violations to us.

‘SEC rules prohibit employers from taking measures through confidentiality, employment, severance, or other type of agreements that may silence potential whistleblowers before they can reach out to the SEC. We will vigorously enforce this provision.’