Comptroller Stringer, NYC Funds Call on Portfolio Companies to Immediately End Exploitative Labor Practices

(New York, NY) — Comptroller Stringer and the NYC Funds today announced a call for CBS and Alphabet to end “Inequitable Employment Practices” that force employees to relinquish their ability to challenge unlawful discrimination and harassment. As CBS and Alphabet, the parent company of Google, continue to face widespread employee criticism over hostile workplace issues – including public lawsuits and mass employee walk-outs, the shareholder proposal announced today and submitted to both companies targets a slate of damaging practices with wide-ranging impacts on the broader economy as well as workers’ rights. Specifically, the proposal calls for an end to the mandatory arbitration of employment-related claims, non-compete agreements with employees, agreements with other companies not to recruit each other’s employees, and involuntary non-disclosure agreements – which have been pinpointed as drivers behind corporate cover-up of harassment and tools used to retaliate against whistleblowers.

“When big corporations force their workers to sign away basic rights, investors have to fight back. These fine print agreements have damaging consequences for workers, investors, and the public. Mandatory arbitration and forced non-disclosure silence workers and keep misconduct in the shadows. No-poaching agreements and non-competes can suppress pay and keep employees from leaving hostile workplaces. As investors, these exploitative practices aren’t just wrong on a human level, they have a wide impact on our broader economy,” said Comptroller Stringer. “Over the last two years, on issues from sexual assault to shameless exploitation that endangers workers, brave whistleblowers have sounded the alarm on how the deck is stacked against working people. Corporations and boards of directors that continue to rely on the forced silencing of their employees are creating long-term reputational and regulatory risks for their companies and their investors. We’re committed to using our power as shareowners to unstack the deck, improve accountability, and position these companies for sustained growth.”

Shareholder proposals are an effective tool for investors to bring change to a company. By submitting a proposal, shareholders elevate initiatives and ideas to the boardroom table as well as the company’s board of directors who oversee the firm’s strategy, risks and practices, for peer investors to vote on at the annual meeting. The proposals submitted by Comptroller Stringer will be voted on in the upcoming year and included in Alphabet and CBS’s “proxy” – the ballot of all proposals subject to shareowner votes in that year.

In recent years, companies have increasingly relied on a series of contractual arrangements with their employees that put strict limits on remedies workers can seek for workplace misconduct and wrongdoing – including sexual harassment. These “Inequitable Employment Practices” include:

• Mandatory Arbitration: Prevents workers from taking legal action and suing in court for wrongs like wage theft, discrimination, and harassment, among others. Instead, the agreement requires workers to participate in private arbitration, which has been found to favor companies and discourage claims.
• Non-Disclosure Agreements (“NDAs”): Keep workers from talking publicly about abuse and their experiences, again putting the lid on attempts to shed light on hostile situations. NDAs, which can be used in both court settlements and arbitration, may conceal patterns of misbehavior. The secrecy of NDAs can allow a toxic culture to flourish, increasing the severity of eventual consequences and harming employee morale.
• Non-Compete Clauses: Keep workers from freely making their own employment decisions. There is evidence that non-compete provisions stifle innovation and entrepreneurship, which in turn harms the broader economy.
• “No-Poaching” Pacts: In which companies agree not to recruit each other’s employees. There is evidence that “no-poaching” pacts introduce labor market inefficiencies and inhibit innovation.

The proposals were submitted on behalf of the New York City Employees’ Retirement System (NYCERS), the Teachers’ Retirement System (TRS), New York City Police Pension Fund (Police), and Board of Education Retirement System (BERS).

Comptroller Stringer serves as the investment advisor to, and custodian and a trustee of, the New York City Pension Funds. In addition to Comptroller Stringer, the New York City Pension Funds’ Trustees are:

New York City Employees’ Retirement System: Mayor Bill de Blasio’s Representative, John Adler (Chair); New York City Public Advocate Letitia James; Borough Presidents: Gale Brewer (Manhattan), Melinda Katz (Queens), Eric Adams (Brooklyn), James Oddo (Staten Island), and Ruben Diaz, Jr. (Bronx); Henry Garrido, Executive Director, District Council 37, AFSCME; John Samuelsen, President Transport Workers Union Local 100; Gregory Floyd, President, International Brotherhood of Teamsters, Local 237.

Teachers’ Retirement System: Mayor Bill de Blasio’s Appointee, John Adler; Chancellor’s Representative, Lindsay Oates, New York City Department of Education; and Debra Penny, Thomas Brown and David Kazansky, all of the United Federation of Teachers.

New York City Police Pension Fund: Mayor Bill de Blasio’s Representative, John Adler; New York City Finance Commissioner Jacques Jiha; New York City Police Commissioner James P. O’Neill (Chair); Patrick Lynch, President, John Puglissi, 1st Vice President; Joseph Alejandro, 2nd Vice President, and Juan Zubizarreta, Chair, Patrolmen’s Benevolent Association; Michael Palladino, Detectives Endowment Association; Edward D. Mullins, Sergeants Benevolent Association; Louis Turco, Lieutenants Benevolent Association; and, Roy T. Richter, Captains Endowment Association.

Board of Education Retirement System: Schools Chancellor Richard Carranza (designee: Lindsey Oates); Peter J. Calandrella; Isaac Carmignani; Geneal Chacon; April Chapman; Jose Davila; Deborah Dillingham; Michael Kraft; Vanessa Leung; Gary Linnen; John Maderich; Donald Nesbit; Lori Podvesker; Shannon Waite; Miguelina Zorrilla-Aristy.

To view the proposals submitted by the NYC Funds, click here.

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