Apple, Inc. (NASDAQ:AAPL) is courting controversy over its alleged use of non-disclosure agreements, or concealment clauses, with employees.

What Happened: Eight state treasurers have written to SEC Chair Gary Gensler to ask the agency to probe Apple's use of concealment clauses in employment and post-employment agreements.

The agreements, according to the officials, pertain to discrimination, harassment and other unlawful acts.

Apple has repeatedly denied multiple reports that said whistleblower documents show Apple uses concealment clauses, the letter said.

On Wednesday, The Washington Post reported that a former Apple employee, Cher Scarlett, said she was contacted by the SEC in January regarding allegations she made about the tech company and non-disclosure agreements. 

An Apple spokesman told the Post the company has not been contacted by the SEC and is unaware of an investigation. 

The Letter To The SEC: The treasurers said they want to know if Apple misled the Commission and investors about this matter. They also expressed hope the regulator will act in a way that will preserve the integrity of the shareholder proposal process.

The non-disclosure agreements are put in place to protect sensitive corporate information such as intellectual capital and trade secrets, the letter said.

Some companies are using these clauses to stifle the rights of workers to speak openly about harassment, discrimination and other unlawful acts, the group of state treasurers said. 

The letter also pointed to a mandate by California  that the employment and post-employment agreements should include text that suggests employees are not prevented from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that they believe is unlawful.

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Why It's Important: The SEC could initiate a probe into whether Apple's non-disclosure agreement violates SEC's anti-gag rules, according to Zuckerman Law, a Washington, D.C.-based law firm that represents whistleblowers and litigates employment-based disputes.

The anti-gag rule prohibits anyone from taking any action to prevent an individual from communicating directly to the SEC staff about a securities law violation, Jason Zuckerman, principal of Zuckerman Law, said in an article in the National Law Review.

"If Apple is using concealment clauses and unlawful NDAs to silence whistleblowers, then Apple shareholders may not have an accurate and complete picture of the company's financial condition and risks, including Apple's ESG-related risks and risks stemming from its potential violations of anti-trust laws," Zuckerman said.

At last check, Apple shares were up 0.49% at $175.69. 

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