An investment fund wants a reckoning with three major corporations after a litany of significant fraud, sexual harassment and racial discrimination allegations were made against them in recent times.
New York state’s $260 billion pension fund has confronted Chipotle, Tesla and Wells Fargo with shareholder proposals that will require them to reveal how much money the businesses have spent resolving disputes and what number of complaints You are looking for an answer through arbitration or litigation. The trio have all been involved in lawsuits and investigations or been the topic of reports of unsavory workplace practices. The New York fund says investors will ultimately foot the bill for poor management.
“We selected these companies because of a long history of management and board failure to oversee the workforce,” Mark Johnson, press secretary for New York City Comptroller Thomas DiNapoli, said in an announcement Assets. “Civil rights violations in the workplace can result in significant costs to organizations, including fines and penalties, legal costs, costs associated with absenteeism, reduced productivity, recruiting challenges, and leadership distraction.”
The supporting statements within the proposals discover the problems that led the Fund to submit the proposals. At Tesla, the carmaker was involved in “numerous serious allegations of racial or sexual harassment and discrimination,” in accordance with the money statement. This includes an equal employment opportunity commission legal motion of racial harassment and retaliation because alleged black employees were subjected to open hostility at a producing plant in California. The EEOC said Black employees “regularly encountered graffiti, including variations of the N-word, swastikas, threats and nooses, on desks and other equipment, in bathroom stalls, in elevators and even on new vehicles coming off the Tesla assembly line.” settled a racial discrimination lawsuit with a former elevator operator for $3.2 million and a settlement last month The proposed class motion lawsuit is pending.
Wells Fargo was the bank’s most up-to-date controversy a news report The New York pension fund announced that the corporate had conducted mock interviews with various candidates for positions that had already been filled. It added that the Southern District of New York is reportedly investigating possible violations of federal law regarding the fake interviews. The company also paid $3 billion in 2020 to resolve criminal and civil investigations with various regulators that its employees opened hundreds of thousands of faux accounts without customers’ consent, allowing it to gather fees to which it was not entitled.
Burrito chain Chipotle settled an EEOC lawsuit in 2023 and paid $400,000 to a few former employees — one in all whom was a youngster — to settle a sexual harassment lawsuit wherein the workers said a service manager subjected them to sexual touching and solicitations for sex. The EEOC said the manager isolated the three by trapping them in Chipotle’s walk-in refrigerator.
Chipotle and Tesla haven’t yet filed 2024 proxy statements, which is able to list their shareholder proposals and the boards’ recommendations for the way the businesses want investors to vote. Wells Fargo, in its proxy statement, urged investors to vote against the proposal. According to the board, New York presented the corporate with the identical proposal last yr and a majority of investors supported it. Since then, the corporate has released a racial equity assessment and makes “material changes to our policies and practicesThe company eliminated confidentiality and nondisparagement provisions from severance agreements for non-supervisory employees in 2023 and plans to update its harassment and discrimination policies in 2024, amongst other changes that the board said would reply to the shareholder proposal .
Wells Fargo said it had worked with representatives of the New York fund “on multiple occasions.”
In an announcement about this Assetsthe comptroller’s press secretary said: “We have not had constructive engagement with the companies.” Regarding Wells Fargo, the press secretary said the fund resubmitted the proposal “because we won majority support and nothing happened.”
