OpenAI Whistleblowers Urge SEC to Investigate Alleged Restrictive NDAs

9/3/2024

Recent developments have put OpenAI, a leading artificial intelligence company, under scrutiny as whistleblowers have urged the U.S. Securities and Exchange Commission (SEC) to investigate the company’s non-disclosure agreements (NDAs). These whistleblowers, backed by the office of Senator Chuck Grassley, allege that OpenAI’s NDAs are overly restrictive, potentially violating federal whistleblower protection laws. The complaint claims that the NDAs in question may have required employees to waive their rights to whistleblower compensation, which could undermine their ability to report concerns to federal authorities.

The whistleblowers are asking the SEC to take action against OpenAI, potentially imposing fines for each improper agreement. Additionally, they are requesting a thorough review of all contracts containing NDAs, including employment, severance, and investor agreements, to ensure compliance with SEC regulations. The allegations have raised concerns about OpenAI’s policies, which some argue may suppress whistleblowers from speaking out about potential securities violations or other issues within the company. As the SEC considers the matter, the case highlights the ongoing debate over the ethical and legal implications of AI development and corporate governance.

To read more about the SEC investigation into OpenAI’s non-disclosure agreements, click here.

To read how CASTAYBERT PLLC can assist you with Employment Law matters, click here.