Apple Shareholders Reject Company Recommendation And Vote For Transparency On Concealment Clauses
Last Friday a majority of Apple shareholders made waves by voting for a proposal filed by Nia Impact Capital calling on Apple’s Board of Directors to investigate the company’s use of clauses that prevent employees from speaking out about harassment and discrimination. The success of Proposal 10 is a victory for employment transparency, and a sign of changing winds that other tech companies should heed.
The resolution calls for a report assessing the risks to Apple associated with its use of concealment clauses, including arbitration, non-disclosure, and non-disparagement agreements that stifle workers’ abilities to discuss unlawful acts occurring in the workplace — and which, consequently, prevent shareholders from adequately assessing Apple’s workplace culture. Concealment clauses are frequently (and wisely) used in employment agreements to prevent employees from divulging proprietary corporate information, yet without effective limitations, they can also be gag orders for employees who are victims of workplace harassment and discrimination.
Limiting workers’ rights to speak openly about these experiences shields the structures and individuals who perpetuate this harm from accountability — and exposes companies to serious legal and financial risk. Pinterest recently came under fire for its years of abusing concealment clauses, facing a $22.5 million settlement payment for a gender discrimination case, as well as a breach of fiduciary responsibility lawsuit. Alphabet agreed to limit its use of concealment clauses as part of a $300 million settlement of shareholder suits alleging the company created a toxic work environment.
Instead of learning from these examples (or listening to the burgeoning storm of allegations from Apple employees claiming the company has retaliated against them for raising issues of discrimination and labor abuses), Apple tried to dismiss the issue before it came to a vote.
But their efforts failed, and last week’s majority vote shows strong concerns among shareholders about Apple’s use of concealment clauses and its apparent lack of consistent implementation of its own stated policies against using concealment clauses associated with workplace conditions. This represents a substantial step forward in the march for transparency in employment agreements.
Moreover, this victory is one of many successes in the push calling harmful concealment clauses into question. In California, the Silenced No More Act recently expanded the state’s existing protections to ban the use of concealment clauses to silence worker harassment claims. Federal legislation prohibiting forced arbitration for sexual harassment and assault claims passed through Congress with bipartisan support just last month. And shareholder resolutions like Proposal 10 are coming up for votes at numerous tech companies this spring.
Investors are no longer to allow companies to brush off their requests for transparency and accountability in workplace conditions. They are not mollified by half-hearted blog posts and platitudes. Companies should take note: the movement to investigate concealment clauses is picking up steam, and neither shareholders nor activists will be so easily dissuaded. Hopefully Apple and other companies learn from today’s vote and move to uphold the interests of both shareholders and workers by investing in real employment transparency.