The FAR Council has issued a proposed rule that would ban federal contractors from requiring their employees or subcontractors to sign an internal confidentiality agreement that restricts them from reporting fraud, waste, or abuse to a U.S. Government representative.

The proposed confidentiality agreement rule, published in the Federal Register on January 22, 2016, would implement a provision added to the government’s Fiscal Year (FY) 2015 spending bill that prohibits the expenditure of any federal funds for contracting with an entity that requires employees or subcontractors to sign such an agreement.

The rule would cover all federal contracts other than those with an individual for personal services, and create two new required contract clauses. It would require prospective contractors to promise that they do not require employees or subcontractors to sign a prohibited confidentiality agreement. In addition, a flow-down provision would require contractors to include the required contract language in their subcontracts. Finally, contractors that have been using the kind of now-prohibited confidentiality agreements would be required to notify employees that such contracts are no longer in effect.

Please note that as a practical matter, at least one federal agency — the Department of Defense (DOD) — has already implemented the confidentiality rule using something called the “class deviation” process, which allows an agency to deviate from the FAR when directed to do so.

Members of the Equal Employment Advisory Council (EEAC) can read more here.