<https://www.washingtonpost.com/technology/2024/07/13/openai-safety-risks-whistleblower-sec/>
OpenAI whistleblowers have filed a complaint with the Securities and Exchange Commission alleging the artificial intelligence company illegally prohibited its employees from warning regulators about the grave risks its technology may pose to humanity, calling for an investigation. The whistleblowers said OpenAI issued its employees overly restrictive employment, severance and nondisclosure agreements that could have led to penalties against workers who raised concerns about OpenAI to federal regulators, according to a seven-page letter sent to the SEC commissioner earlier this month that referred to the formal complaint. The letter was obtained exclusively by The Washington Post. OpenAI made staff sign employee agreements that required them to waive their federal rights to whistleblower compensation, the letter said. These agreements also required OpenAI staff to get prior consent from the company if they wished to disclose information to federal authorities. OpenAI did not create exemptions in its employee nondisparagement clauses for disclosing securities violations to the SEC. These overly broad agreements violated long-standing federal laws and regulations meant to protect whistleblowers who wish to reveal damning information about their company anonymously and without fear of retaliation, the letter said. “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.” In a statement, Hannah Wong, a spokesperson for OpenAI said, “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.” The whistleblowers’ letter comes amid concerns that OpenAI, which started as a nonprofit with an altruistic mission, is putting profit before safety in creating its technology. The Post reported Friday that OpenAI rushed out its latest AI model that fuels ChatGPT to meet a May release date set by company leaders, despite employee concerns that the company “failed” to live up to its own security testing protocol that it said would keep its AI safe from catastrophic harms, like teaching users to build bioweapons or helping hackers develop new kinds of cyberattacks. In a statement, OpenAI spokesperson Lindsey Held said the company “didn’t cut corners on our safety process, though we recognize the launch was stressful for our teams.” Tech companies’ strict confidentiality agreements have long vexed workers and regulators. During the #MeToo movement and national protests in response to the murder of George Floyd, workers warned that such legal agreements limited their ability to report sexual misconduct or racial discrimination. Regulators, meanwhile, have worried that the terms muzzle tech employees who could alert them to misconduct in the opaque tech sector, especially amid allegations that companies’ algorithms promote content that undermines elections, public health and children’s safety. The rapid advance of artificial intelligence sharpened policymakers’ concerns about the power of the tech industry, prompting a flood of calls for regulation. In the United States, AI companies are largely operating in a legal vacuum, and policymakers say they cannot effectively create new AI policies without the help of whistleblowers, who can help explain the potential threats posed by the fast-moving technology. “OpenAI’s policies and practices appear to cast a chilling effect on whistleblowers’ right to speak up and receive due compensation for their protected disclosures,” said Sen. Chuck Grassley (R-Iowa) in a statement to The Post. “In order for the federal government to stay one step ahead of artificial intelligence, OpenAI’s nondisclosure agreements must change.” A copy of the letter, addressed to SEC chairman Gary Gensler, was sent to Congress. The Post obtained the whistleblower letter from Grassley’s office. The official complaints referred to in the letter were submitted to the SEC in June. Stephen Kohn, a lawyer representing the OpenAI whistleblowers, said the SEC has responded to the complaint. It could not be determined whether the SEC has launched an investigation. The agency did not respond to a request for comment. The SEC must take “swift and aggressive” steps to address these illegal agreements, the letter says, as they might be relevant to the wider AI sector and could violate the October White House executive order that demands AI companies develop the technology safely. “At the heart of any such enforcement effort is the recognition that insiders … must be free to report concerns to federal authorities,” the letter said. “Employees are in the best position to detect and warn against the types of dangers referenced in the Executive Order and are also in the best position to help ensure that AI benefits humanity, instead of having the opposite effect.” These agreements threatened employees with criminal prosecutions if they reported violations of law to federal authorities under trade secret laws, Kohn said. Employees were instructed to keep company information confidential and threatened with “severe sanctions” without recognition of their right to report such information to the government, he said. “In terms of oversight of AI, we are at the very beginning,” Kohn said. “We need employees to step forward, and we need OpenAI to be open.” The SEC should require OpenAI to produce every employment, severance and investor agreement that contains nondisclosure clauses to ensure they don’t violate federal laws, the letter said. Federal regulators should require OpenAI to notify all past and current employees of the violations the company committed as well as notify them that they have the right to confidentially and anonymously report any violations of law to the SEC. The SEC should issue fines to OpenAI for “each improper agreement” under SEC law and direct OpenAI to cure the “chilling effect” of its past practices, according to the whistleblowers letter. Multiple tech employees, including Facebook whistleblower Frances Haugen, have filed complaints with the SEC, which established a whistleblower program in the wake of the 2008 financial crisis. Fighting back against Silicon Valley’s use of NDAs to “monopolize information” has been a protracted battle, said Chris Baker, a San Francisco lawyer. He won a $27 million settlement for Google employees in December against claims that the tech giant used onerous confidentiality agreements to block whistleblowing and other protected activity. Now tech companies are increasingly fighting back with clever ways to deter speech, he said. “Employers have learned that the cost of leaks is sometimes way greater than the cost of litigation, so they are willing to take the risk,” Baker said.
