- A whistleblower's nondisclosure agreement with Apple brings new scrutiny to SEC proposal.
- The document demonstrates the lengths Apple will go to silence former employees.
- "If we can't hold the biggest company in the world accountable, who can we?" Apple whistleblower Cher Scarlett said.
Lawyers for Apple spelled out precisely what they wanted engineer Cher 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."
The language, included in a strict nondisclosure and non-disparagement clause as part of a separation agreement Apple offered Scarlett last month, struck Scarlett as "ridiculous," she told Insider.
"I was shocked," said Scarlett, who spent months working to improve pay equity at Apple, which she says prompted harassment from colleagues and intimidation from the company. "In my mind, I should be able to say whatever I want as long as I'm not defaming Apple."
The gag order, which Scarlett declined to sign, was fresh on her mind when, on October 18, Apple made a series of startling statements to the SEC.
In responding to a shareholder proposal for Apple to assess potential risk associated with using NDAs "in the context of harassment, discrimination, and other unlawful acts," Apple told the SEC that its "policy is to not use such clauses." As a result, attorneys for Apple argued the company had already addressed the concerns of activist shareholders.
Citing her own experience receiving NDAs from Apple, Scarlett filed a whistleblower complaint with the SEC on October 25. The complaint, which Insider has reviewed, details what Scarlett says are "false statements or misleading statements" by Apple to the agency.
Scarlett included a copy of the settlement agreement Apple offered her in her SEC complaint, describing 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 labor laws.
Scarlett shared the NDA that Apple offered her with Nia Impact Capital, the activist investor seeking to force a shareholder vote around transparency on NDAs at the company. On Monday, Nia informed the SEC that it had "received information, confidentially provided, that Apple has sought to use concealment clauses in the context of discrimination, harassment, and other workplace labor violation claims."
Monday evening, Scarlett revealed that she was the source of this information.
"I knew the SEC filing was a lie … I wanted a way to be able to hold them accountable to that," said Scarlett, adding that she does not expect to receive future scheduled payments as part of her settlement agreement with Apple now that she has broken its nondisclosure terms. "The money that would come in a year isn't worth (Apple) not being held accountable now."
Apple did not immediately respond to a request for comment Monday evening.
The scrutiny over gagging employees comes at a tumultuous time for the notoriously secretive Apple, which has responded to employee organizing by condemning a series of recent leaks to the press. Last week, Apple posted an internal memo to employees 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 read. The memo formalizes a key part of what Scarlett sought when she filed a complaint with the National Labor Relations Board over the summer; she described Apple's decision as "the best-case scenario" following months of work by her and others at the company.
Insider documented for the first time earlier this year the extent to which nondisclosure agreements blanket Silicon Valley. In reviewing dozens of confidential NDAs shared by tech workers, the investigation revealed the broad language frequently used to silence employees, including at Apple. In reporting on nondisclosure agreements at Apple, Insider asked the company if it had ever pursued legal action against a former employee over an alleged breach of their NDA.
An Apple spokesman did not respond.
On the heels of Scarlett's decision to blow the whistle, Nia CEO Kristin Hull said her firm is seeking further review from the SEC on its shareholder proposal, including a review of arbitration cases at Apple and HR complaints.
"This mess with the SEC doesn't make any sense," Hull said, adding that her office has had "very cordial" calls with Apple representatives in recent weeks but that Scarlett's disclosures show that efforts to silence former employees at the company are "absolutely happening."
In negotiating her final settlement with Apple, Scarlett's attorney sought to include the language that kicked off Nia's initial request and was organized by tech whistleblower Ifeoma Ozoma, a former Pinterest employee who alleged the company engaged in racial and gender discrimination. The language comes from the Silenced No More Act, which Ozoma co-sponsored and will take effect in California in 2022.
It reads: "Nothing in this agreement prevents you from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that you have reason to believe is unlawful."
Attorneys for Apple declined to include the language in Scarlett's settlement agreement. As she began her first week as a former Apple employee, Scarlett said she hopes that protections afforded to employees in California by the Silenced No More Act will be extended globally.
"If we can't hold the biggest company in the world accountable, who can we?"