Review Effectiveness of Company’s Anti-Harassment Efforts

Resolution Text

Whereas:

Concerns have been raised about International Business Machines’ (“IBM”) workplace practices. These have included gender, race and age discrimination allegations.

Given the severity of the allegations, investors and other stakeholders may have reduced confidence in the Company’s statements that “IBM has been a leader in corporate diversity and inclusion for decades and is deeply committed to fostering a healthy, safe, and productive work environment for all IBMers.”[1]

Indicating a possible discomfort with the Company’s use of concealment clauses, 64.7 percent of IBM’s investors supported a 2022 shareholder resolution which requested that IBM’s Board of Directors release 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”.[2] Concealment clauses are defined as employment or post-employment agreements, such as arbitration or non-disclosure agreements, that IBM asks employees or contractors to sign which would limit their ability to discuss unlawful acts in the workplace, including harassment and discrimination.  

IBM utilizes concealment clauses within a patchwork of state and federal laws. In September 2022, the U.S. Senate unanimously passed “The Speak Out Act” which would limit non-disclosure agreements when sexual harassment is claimed.[3] California and Washington already prohibit agreements that prevent employees from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination.

Given that IBM continues to use concealment clauses “in settlements of lawsuits, or as part of voluntarily agreed exit agreements,”[4] shareholders are unable to assess the breadth of discrimination and related risks within the Company. This practice is not used by Alphabet[5], Apple[6], Microsoft[7], or Salesforce[8], among others.

Resolved:

Shareholders request the Board of Directors commission an independent review of the effectiveness and outcomes of the Company’s efforts to prevent harassment and discrimination against its protected classes of employees, and issue a public report summarizing the findings.

Supporting Statement:

In its discretion, the Board may wish to consider including in the report disclosures such as:

the total number and aggregate costs associated with disputes settled by the Company related to harassment or discrimination in the previous three years;
the total number of pending harassment or discrimination complaints the Company is seeking to resolve through internal processes, arbitration or litigation;
the total number and aggregate costs associated with contracts that include exit or other agreements where concealment clauses that restrict discussions of harassment or discrimination are present,
an estimate of the number of claims which may be made public, should existing non-disclosure or arbitration agreements be made null by changing legislation.

The report should not include the names or details of settlements without consent and should be prepared at a reasonable cost and omit any information that is proprietary, privileged, or violative of contractual obligations.

[1] https://sec.report/Document/0001104659-22-031075/

[2] https://www.sec.gov/ix?doc=/Archives/edgar/data/0000051143/000110465922053570/tm2213945d1_8k.htm

[3] https://spectrumnews1.com/oh/cincinnati/news/2022/10/03/u-s–senate-passes-bill-limiting-ndas

[4] https://sec.report/Document/0001104659-22-031075/

[5] https://www.sec.gov/Archives/edgar/data/1652044/000130817922000262/lgoog2022_def14a.htm

[6] https://www.sec.gov/Archives/edgar/data/320193/000119312522003583/d222670ddef14a.htm

[7] https://blogs.microsoft.com/on-the-issues/2022/06/08/microsoft-announces-four-new-employee-workforce-initiatives/

[8] https://www.salesforce.com/news/stories/salesforce-extends-workplace-protections-in-ca-sb331-bill-to-all-u-s-employees/