Legal Question in Employment Law in California

I've worked for a small company (<10 employees) in CA for two years. In April this year I confirmed that the CEO at the time had been stealing money from the company (approx $750,000). I reported this to the owner who is also his friend. The owner decided to keep him at the company and made him COO, while the owner took over as CEO.

It has been very frustrating for me (I still work for this co.) and I've been debating letting the IRS know about the situation. The owner asked me not to go to the authorities, so I did not report this to FBI or police.

Now the owner is asking all employees to sign a Confidentiality Agreement. It includes not sharing any financial info about the company. Do I have to sign? If I do sign, does it expire when I leave this company? If I sign and then talk to the IRS at some point, can the company sue me?

Please Help!


Asked on 8/18/10, 12:52 pm

1 Answer from Attorneys
Terry A. Nelson Nelson & Lawless

In general, unless an employee is civil service, in a union, or has a written employment contract, they are an 'at will' employee that can be disciplined or fired any time for any reason, with or without �cause�, explanation or notice, other than for illegal discrimination, harassment or retaliation under the ADA disability, Civil Rights [age, race, sex, ethnic, religion, pregnancy, etc], Whistle-blower, or similar statutes. The employee's goal should be to keep the employer happy.

If you are retaliated against for reporting to authorities or threatening to, you might have a legal claim. Nothing you sign can stop you from reporting tax fraud to IRS or other proper govt authorities, but a confidentiality agreement means what it says regarding disclosure to others than IRS in your case. Violate it at your own risk. Refuse to sign at your own risk.

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Answered on 8/23/10, 1:18 pm


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