A terminating employee wanted to cash out all of his company stock retirement to an IRA.
After the employee’s request, the company changed the rules on distribution of company stock. This change did not allow for the complete liquidation of a person’s company stock.
The terminating employee protested stating that what the company was doing was illegal.
The company decided to allow the terminating employee to cash out all of his company stock only if he would sign a non-disclosure/non-disparagement agreement.
The employee signed this agreement and cashed out his company stock.
The company was later investigated by the DOL. The findings of DOL state that what the company tried to do was illegal.
The only reason the ex-employee signed this agreement was to get his retirement funds that were illegally being held by the company.
There would have been no non-disclosure/non-disparagement agreement if the company did not illegally stop the liquidation of the ex-employee’s retirement account.
Is the non-disclosure/non-disparagement agreement still valid?