SEC denies Apple Inc’s bid to dismiss shareholder proposal on concealment clauses on NDAs

The U.S. Securities and Exchange Commission (SEC) has denied Apple Inc’s bid to exclude a shareholder proposal that would have required Cupertino to inform investors of its use of non-disclosure agreements and other concealment clauses.

The SEC’s move will mean that Apple will now have to face a vote on the proposal at its annual shareholder meeting next year, barring a deal with the activist.

Although Apple has said its policy is not to use concealment clauses, at least one former employee has disputed that and has filed a whistleblower complaint with the SEC.

In September 2021, Nia Impact Capital, an Apple investor, filed a shareholder proposal calling for 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.”

In October 2021, Apple filed a response with the SEC saying it wanted to exclude the proposal since “the company’s policy is to not use such clauses.”

In its letter the SEC denied Apple’s request, saying Apple had not “substantially implemented the proposal.”

Apple’s spokesperson declined to comment on the SEC letter.

Apple has previously said it does not matters related to specific employee and that it is “deeply committed to creating and maintaining a positive and inclusive workplace.”

After viewing Apple’s response to the SEC on the shareholder proposal, Cher Scarlett, a former Apple employee, has filed a whistleblower complaint with the SEC alleging that Apple had made false and misleading statements to the regulator.

She also mentioned that she had shared documents with Nia Impact Capital on this matter.

Large companies like Apple routinely ask permission to skip shareholder proposals; such requests are routinely granted by the SEC at about half the time.

Categories: Creativity, Entrepreneurship, HR & Organization, Regulations & Legal, Strategy

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