Investors have filed a shareholder resolution asking Apple Inc. to add language to its employment agreements that ensures workers can speak freely about potentially unlawful workplace conditions, including harassment and discrimination.
At Apple, like many other tech companies, workers sign employment agreements that protect confidential corporate information. However, many of these agreements also prohibit them from speaking up about instances of harassment, discrimination, or other unlawful behavior. In addition to silencing workers and contributing to toxic and inequitable workplaces, these “concealment clauses” can negatively impact shareholder value by leading to expensive lawsuits, regulatory risk, negative press, and challenges in attracting and retaining talent.
The shareholder proposal, filed by Nia Impact Capital, a Calfornia-based investment firm, asks Apple’s Board to prepare a public report assessing the potential risks to the company associated with its use of concealment clauses in the context of harassment, discrimination and other unlawful acts. The proposal is concerned with these clauses as they appear in “any employment or post-employment agreement, such as arbitration, non-disclosure or non-disparagement agreements” for Apple employees or contractors globally.
“Apple's use of concealment clauses is both a governance and a diversity concern,” said Kristin Hull, Founder, CEO and CIO of Nia Impact Capital. “Concealment clauses block investors from understanding true workplace conditions and may undermine diversity, equity and inclusion programs. The Board, as the representatives of the investor, should be concerned about the role concealment clauses play in enabling harmful corporate cultures to continue, hidden from stakeholders."
Many major tech companies have a long history of enabling racism and sexism in the workplace and trying to cover it up — at great expense. At Apple, workers have been organizing publicly, under the banner #AppleToo, to collect and expose stories of harassment, institutional discrimination, and abuse at the company.
Nia Impact Capital is part of a coalition of investors, civil society organizations and individuals who are presenting the policy change as a straightforward way for companies like Apple to mitigate business risks, improve corporate governance, and create a corporate culture that is proactive about building a fair, safe, and equitable workplace for all.
In California, Governor Gavin Newsom is expected to soon sign into law the Silenced No More Act, which will require companies to ensure that their workers in that state are able to discuss unlawful behavior by adding the following language to employment agreements: “Nothing in this agreement prevents you from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that you have reason to believe is unlawful.”
The shareholder proposal is expected to be considered by Apple shareholders and voted on at Apple’s annual meeting in February.
Ifeoma Ozoma, Founder & Principal, Earthseed: “I know first-hand that many employment agreements are designed to keep workers quiet about issues of discrimination and harassment. But when our coalition encouraged Apple to take a leadership role and adopt a policy that enables people to speak freely about unlawful activity, the company declined, citing their existing policy. It’s hard to believe their existing policy is sufficient when their own employees say the company is using that same policy handbook to silence workers. With this shareholder resolution, investors are giving Apple a second chance to make the right move — we’ll be curious to see how they respond.”
Meredith Benton, Founder & Principal, Whistle Stop Capital: “Increasingly, shareholders want to understand what’s happening inside companies, particularly when it comes to issues of diversity and equity. Once the Silenced No More Act becomes law in California, it will become burdensome and costly for Apple to deploy a patchwork of protections for workers in different states, increasing the chance of operational inefficiency and business risk. This shareholder resolution asks Apple to take a proactive step toward a consistent, common-sense approach to employment agreements — and to show itself as the industry leader it claims to be.”
Michael Connor, Executive Director, Open MIC: “Research shows that a healthy workplace culture improves financial returns and is beneficial for workers, companies and investors. This shareholder resolution asks Apple to simply adopt a policy that’s expected to soon be law in California to include all its workers and contractors globally. Unlawful behavior has no place in the workplace and workers and contractors should be able to discuss it when encountered. Apple needs to make that clear to its billions of customers, workers and shareholders all around the world.”
Shareholders Tell Apple: Using Employment Agreements as Gag Orders to Hide Discrimination and Harassment Is Bad for Workers and Bad For Business