Salesforce, a leading provider of cloud-based software, announced today that it plans to adopt the principles of a shareholder proposal filed by Whistle Stop Capital regarding the company’s use of concealment clauses in employment agreements and will extend the protections of California’s Silenced No More Act to all U.S. employees. In light of this news, shareholders have successfully withdrawn their proposal.
Concealment clauses, such as arbitration and non-disclosure agreements, block employees from sharing their experiences publicly. This may allow a company to operate with a sense of impunity, unconcerned with having poor practices comes to light. The use of concealment clauses has been linked to serious racial discrimination and sexual harassment allegations within the technology sector.
The Salesforce action follows engagement with the Transparency in Employment Agreements (TEA) Coalition, whose members include Earthseed, Whistle Stop Capital, Open MIC, and Frontier Technology.
Michael Connor, Executive Director of Open MIC, said: “Equity and transparency are critical qualities in the modern day workplace. We’re delighted that Salesforce has shown leadership by adopting a policy that embraces those qualities and makes its workplace more open and accountable.”
Ifeoma Ozoma, Founder and Principal of Earthseed, stated, “This policy change by Salesforce marks one of the largest expansions of Silenced No More protections across the country, as it will cover workers in states that are less likely to pass legislation similar to the bills in California, Washington, and New Jersey. I am proud of the achievements our coalition has made in just one proxy season, and hope this serves as a model for future shareholder engagement on workers rights, transparency, and accountability issues.”
The original shareholder proposal requested that Salesforce asses the risks of so-called concealment clauses, which employees and contractors are required to sign, limiting their ability to discuss unlawful acts in the workplace, including harassment and discrimination.
Meredith Benton, Principal and Founder of Whistle Stop Capital, explained, “A company’s use of concealment clauses undermines the confidence investors can have in its claims of a fair and equitable workplace. After all, how would we learn of problems? Their employees have all been contractually muzzled. As Salesforce proactively disavows its use of concealment clauses, our confidence in the company’s workplace diversity and inclusion programs increases significantly.”
Under its amended employee agreement, Salesforce workers in the U.S. will have similar protections to the Silenced No More Act which was signed into California state law by Governor Gavin Newsom last year. Washington state has adopted similar legislation to become effective in June 2022. The Salesforce announcement means its U.S. workers will no longer be bound by nondisclosure, nondisparagement, or other related agreements in any situations of discrimination, harassment, or other unlawful conduct.
Last month, Apple Inc. shareholders approved a resolution demanding a public report on the company’s use of concealment clauses. The company recently amended its policies, disavowing the use of concealment clauses in severance agreements. And earlier this month, in response to shareholder action by the TEA Coalition, Alphabet disclosed that all Google employees globally are protected from the use of concealment clauses. Tech companies Pinterest, Expensify and Twilio have previously agreed to similar policies. The TEA Coalition and partners have filed proposals on concealment clauses which will be voted on at upcoming shareholder meetings at Meta Platforms, Amazon, and Twitter, among others.
Open MIC is a non-profit organization that works to foster greater corporate accountability in the media and technology sectors, principally through shareholder engagement. Working with socially responsible investors, Open MIC identifies, develops, and supports campaigns that promote values of openness, equity, privacy, and diversity – values that provide long-term benefits for individuals, companies, the economy, and the health of democratic society.
Whistle Stop Capital seeks to strengthen long-term investment returns by pursuing improvements in social and environmental practices within clients’ investment portfolios. The consultancy works with its clients to identify key areas of exposure and opportunity within current investments and to build investment and engagement strategies to encourage improved corporate practices and portfolio return.
The Transparency in Employment Agreements (TEA) Coalition members include Earthseed, Whistle Stop Capital, Open MIC, and Frontier Technology. The TEA Coalition represents investors, civil society organizations, and individuals concerned about the harm that concealment clauses in employment agreements may be causing to the companies, their shareholders, workers, and broader society.
For more information:
Michael Connor
Executive Director, Open MIC
media@openmic.org
212-875-9381