Global brokerage CBRE has just settled with the Securities and Exchange Commission over allegations that the firm violated a whistleblower protection rule. The SEC took issue with how CBRE required employees to sign a release attesting that they had not filed a complaint in order to receive separation pay. This clause meant that “CBRE took action to impede potential whistleblowers from reporting complaints to the commission,” according to the SEC. To CBRE’s credit, once they found out about the investigation, they cooperated and took action to change their procedures. They also agreed to pay a civil penalty of $350,000, even though they were clear that this payment did not mean either an addition or denial of the accusations.
The $350,000 penalty will not be a material loss for a company the size of CBRE but the attention that this put on the brokerage, both by federal investigators and the general public, will likely be enough to prevent it and others from doing this again. There has already been talk of banning non-compete clauses, something that has been standard in the commercial property industry. An increased focus on employee rights by state and federal governments has made companies rethink their hiring and firing strategies, and no matter who wins the next election, that focus is likely to only increase. Between a tight labor market, a growing unionization effort, and regulatory pressures, the real estate industry will have to think long and hard about how it attracts and retains talent.