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U.S. SEC allows Apple shareholder's push for details on non-disclosure

U.S. SEC denies Apple's bid to dismiss shareholder proposal on concealment clauses
U.S. SEC denies Apple's bid to dismiss shareholder proposal on concealment clauses   -   Copyright  Thomson Reuters 2021   -  
By Reuters

<div> <p>By Julia Love and Stephen Nellis</p> <p><span class="caps">SAN</span> <span class="caps">FRANCISCO</span> -The U.S. Securities and Exchange Commission has denied Apple Inc’s bid to exclude a shareholder proposal that would require the company to inform investors about its use of non-disclosure agreements and other concealment clauses, according to a document viewed by Reuters.</p> <p>The move means that Apple will have to face a vote on the proposal at its annual shareholder meeting next year, barring a deal with the activist. Apple has said its policy is not to use concealment clauses, but former employees dispute that. </p> <p>In September, investor Nia Impact Capital 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.”</p> <p>Apple in October filed a response with the <span class="caps">SEC</span> saying it wanted to exclude the proposal because “the company’s policy is to not use such clauses.”</p> <p>In a letter dated Monday, the <span class="caps">SEC</span> denied Apple’s request, saying that the company had not “substantially implemented the proposal.”</p> <p>An Apple spokesperson declined to comment on the <span class="caps">SEC</span> letter. The company has previously said it does not discuss specific employee matters and is “deeply committed to creating and maintaining a positive and inclusive workplace.”</p> <p>After viewing Apple’s response to the <span class="caps">SEC</span> on the shareholder proposal, former Apple employee Cher Scarlett said she filed an <span class="caps">SEC</span> whistleblower complaint in October alleging that the company had made false and misleading statements to the regulator. She said she later shared documents with Nia Impact Capital.</p> <p>Former Apple employee Ashley Gjovik also filed an <span class="caps">SEC</span> whistleblower complaint in October alleging Apple made false statements to the agency.</p> <p>Large companies like Apple routinely ask permission to skip shareholder proposals, requests the <span class="caps">SEC</span> traditionally grants about half the time. </p> </div>