Seven of the largest US technology companies, including Alphabet, Amazon and Meta, are facing investor pressure to publish more information about their non-disclosure agreements and other concealment clauses in employment contracts.
Amid growing investor support for employee rights issues, the seven shareholder proposals filed ahead of the companies’ 2022 annual general meetings requested information about the risks posed by concealment clauses.
The proposals, filed by investment advisory firms Clean Yield Asset Management and Nia Impact Capital on behalf of individual investors, noted that Pinterest paid $22.5m to settle a lawsuit after years of binding employees with concealment clauses. They also state that California now prohibits certain concealment clauses, and ask the companies to consider expanding the state’s new requirements more widely.
Etsy, IBM, Salesforce and Twitter also received the shareholder proposals, which were seen by the Financial Times.
“These are all companies that have stated their commitment to the same principles — equity [and] transparency,” said Ifeoma Ozoma, who broke a non-disclosure agreement with Pinterest and is helping lead the shareholder proposals campaign. With these petitions, “we are asking them to act”.
Pinterest had recently agreed to change its employee agreements to emphasise that workers were free to discuss potential harassment and discrimination, Ozoma said. Software company Expensify and cloud computing platform Twilio had agreed to adopt similar language, she added.
Asked for comments about these proposals, a spokesman for Meta said the company’s employee contracts “do not include concealment clauses or language preventing them from speaking publicly about concerns”. Amazon said it did not restrict employees from talking about their employment and supported their right to talk about their working environment.
Alphabet said last year that it made dozens of workplace policy changes, including making arbitration optional for workers. Twitter declined to comment. The other companies that received the proposals did not immediately respond to requests for comment.
Companies have faced shareholder concerns about mandatory arbitration in recent years, but demands for changes about concealment clauses are relatively new.
“Given that the MeToo issue continues to resonate, especially at tech companies, I would expect to see more of these types of proposals about concealment clauses,” said Douglas Chia, founder of consultancy Soundboard Governance, and a fellow at Rutgers Law School.
With BlackRock and other big asset managers now talking about workplace rights issues, “I think this kind of proposal will get considerable support. It is almost one of those proposals that it would be hard to vote against”, Chia said.
There is no guarantee that these plans will go to a vote next year. Companies routinely ask the Securities and Exchange Commission for permission to block proposals, requests that are often granted.
