SEC denies Apple request to exclude shareholder proposal on confidentiality clauses

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SEC denies Apple request to exclude shareholder proposal on confidentiality clauses

SAN FRANCISCO Reuters - The U.S. Securities and Exchange Commission denies Apple'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.

The move means that Apple will have to face a vote on the proposal at its annual shareholder meeting next year, so it won't be able to reach a deal with the activist. One former employee has disputed that and has filed a whistleblower complaint with the securities regulator because Apple has said it is not to use concealment clauses.

In September, investor Nia Impact Capital filed a shareholder proposal calling for Apple's board to prepare a public report assessing the risks associated with its concealment clauses in the context of harassment, discrimination and other unlawful acts. In October, Apple filed a response with the SEC saying it wanted to exclude the proposal because of the company's policy to not use such clauses. The SEC denied Apple's request in a letter on Monday, saying that the company had not substantially implemented the proposal. An Apple spokeswoman didn't want to comment on the SEC letter. The company is committed to creating and maintaining a positive and inclusive workplace, and has previously stated that it does not discuss specific employee matters. After viewing Apple's response to the SEC on the shareholder proposal, former Apple employee Cher Scarlett said she filed an SEC whistleblower complaint in October, alleging that the company had made false and misleading statements to the regulators. She shared documents with Nia Impact Capital later.

Large companies like Apple often ask permission to skip shareholder proposals, requests that the SEC traditionally grants half of the time.