OpenAI Whistleblowers - Illegal Restrictions on Reporting Risks

Whistleblowers from OpenAI have filed a complaint with the Securities and Exchange Commission (SEC), alleging that the company illegally restricted its employees from reporting potential risks of its technology to regulators. The complaint, detailed in a letter exclusively obtained by The Washington Post, calls for an investigation into OpenAI’s employment practices.

Allegations of Restrictive Agreements

According to the whistleblowers, OpenAI required employees to sign overly restrictive employment, severance, and nondisclosure agreements. These agreements allegedly penalized workers who raised concerns about OpenAI's technology with federal regulators. The seven-page letter, sent to the SEC commissioner earlier this month, argues that these agreements violated federal laws designed to protect whistleblowers.

“These contracts sent a message that ‘we don’t want employees talking to federal regulators,’” said one of the whistleblowers, who spoke on the condition of anonymity for fear of retaliation. “I don’t think that AI companies can build technology that is safe and in the public interest if they shield themselves from scrutiny and dissent.”

The letter claims that OpenAI’s agreements forced employees to waive their federal rights to whistleblower compensation and required prior company consent to disclose information to federal authorities. Additionally, OpenAI did not exempt disclosures of securities violations to the SEC from its nondisparagement clauses.

Statement from OpenAI

In response to the allegations, OpenAI spokesperson Hannah Wong stated, “Our whistleblower policy protects employees’ rights to make protected disclosures. Additionally, we believe rigorous debate about this technology is essential and have already made important changes to our departure process to remove nondisparagement terms.”

Concerns About Safety and Profit Prioritization

The whistleblowers’ complaint arises amid concerns that OpenAI, originally a nonprofit with an altruistic mission, is now prioritizing profit over safety. Reports suggest that OpenAI rushed the release of its latest AI model, which powers ChatGPT, to meet a deadline, despite employee concerns about insufficient safety testing. OpenAI spokesperson Lindsey Held asserted that the company “didn’t cut corners on our safety process,” despite acknowledging the launch was stressful for their teams.

Broader Industry and Regulatory Context

Tech companies’ stringent confidentiality agreements have long troubled workers and regulators, particularly during movements like #MeToo and national protests against racial discrimination. These agreements have been criticized for limiting employees' ability to report misconduct and alert regulators to potential violations.

The rapid development of AI technology has heightened policymakers’ concerns, leading to increased calls for regulation. In the U.S., AI companies largely operate without specific legal frameworks, making whistleblower contributions critical for developing effective policies.

Senator Chuck Grassley emphasized the importance of protecting whistleblowers’ rights in a statement to The Post, highlighting the need for OpenAI to revise its nondisclosure agreements. The whistleblowers' letter to the SEC chairman Gary Gensler, also sent to Congress, underscores this need.

Legal and Regulatory Steps

Stephen Kohn, the lawyer representing the OpenAI whistleblowers, confirmed that the SEC has responded to the complaint, though it remains unclear if an investigation has been launched. The letter urges the SEC to take “swift and aggressive” action against the illegal agreements, emphasizing the necessity for employees to report concerns to federal authorities without fear of retaliation.

The letter also calls for the SEC to require OpenAI to disclose all employment, severance, and investor agreements containing nondisclosure clauses, and to notify past and current employees of their rights to report violations confidentially. Additionally, the SEC should issue fines for each improper agreement and mandate corrective actions to eliminate the chilling effect on whistleblowers.

Ongoing Battle Against Restrictive NDAs

The fight against restrictive nondisclosure agreements in Silicon Valley is ongoing. Chris Baker, a San Francisco lawyer, noted that tech companies often use these agreements to deter whistleblowing and other protected activities. Despite legal victories like the $27 million settlement for Google employees, companies continue to find new ways to discourage employee disclosures.