Monday, March 13, 2023

Conservative Free Enterprise Project challenges Apple Inc.’s current DEI policies

By Suzanne Cosgrove

In a pushback against recent corporate inclusion and diversity initiatives, conservative shareholder activists from the Free Enterprise Project Friday submitted a proposal at the Apple Inc. shareholder meeting that challenged what they characterized in a tweet as “the value of their (Apple’s) woke Diversity, Equity & Inclusion (DEI) policies.”

“DEI is overtly bigoted against men, white people and straight people by falsely assuming that they are inherently—and irredeemably—racist and sexist oppressors,” stated Ethan Peck, an associate with the National Center for Public Policy Research’s Free Enterprise Project, in a statement released by the group on Friday.

In response, Apple’s board of directors stated the group’s resolution “mischaracterizes Apple’s commitment to inclusion and diversity by suggesting that our policies promoting these goals are discriminatory. Contrary to the proponent’s claims, Apple does not tolerate discrimination or harassment of any kind.”

Apple shareholders backed the company on Friday and voted against the Free Enterprise Project’s proposal.

Apple audit underway. In its shareholder resolution, titled a “Civil Rights and Non-Discrimination Audit Proposal,” No. 5 in Apple’s proxy statement, the National Center for Public Policy Research had argued “there is much disagreement about what non-discrimination means.”

That disagreement and the resulting controversy creates reputational, legal, and financial risk, the group claimed, not just for Apple, but for other companies, including Bank of America, American Express, Verizon and others, according to the group’s proxy filing. In the development of its audit recommendation, Apple should consult both civil rights and public interest law groups, the group said.

But a proposal to conduct an audit is redundant, Apple replied. The company said Apple already engaged a team from Covington & Burling, LLP, led by former U.S. Attorney General Eric Holder, to examine civil rights impacts related to Apple’s people, services, customers and communities.

Part of a bigger picture. The Free Enterprise Project’s latest shareholder initiative is part of a wave of anti-DEI measures. A law firm called the American Civil Rights Project sued Starbucks Corp. on similar grounds last year, also on behalf of the National Center for Public Policy Research, arguing that Starbucks and its executives violated their fiduciary duties in adopting the DEI policies that allegedly illegally discriminated based on race by incentivizing officers to establish a more diverse workforce and supply chain.

And the recent shareholder action follows a vote in Congress earlier this month to disapprove a U.S. Department of Labor rule that would allow ERISA fiduciaries to consider environmental, social and governance (ESG) factors when making investment decisions. The anti-DEI legislation was introduced in the Senate by Sen. Mike Braun (R-Indiana) and a companion bill was sponsored in the House by Rep. Andy Barr (R-Kentucky).

As reported by Securities Regulation Daily, the resolution to disapprove H.J. Res. 30, which was brought under the Congressional Review Act, was expected to encounter a presidential veto. The Biden administration has stated it strongly opposes the resolution.