By Levi Sumagaysay
Salesforce Inc. has agreed to extend the protections of a California law to the rest of its U.S. employees, in another victory for a coalition that has set out to urge tech companies to adopt transparency in their employment contracts and essentially free employees from nondisclosure agreements.
San Francisco-based Salesforce (CRM) said Friday that by the end of the year, its entire U.S. workforce will have, at a minimum, the protections of the "Silenced No More Act." According to the company's latest annual filing with the Securities and Exchange Commission, its U.S. workforce totals about 40,000.
The law that went into effect in January builds on existing state law that gives employees the right to speak out about sexual harassment and discrimination in the workplace, adding the ability to also talk about racism and other forms of abuse and harassment. It also bans companies from including broad confidentiality and nondisparagement clauses in settlement agreements. This means employees who agree to settlements with companies over any kind of abuse in the workplace will no longer have to keep quiet about why.
"Our employees are key stakeholders, and it's critical that we offer them the support to ensure they're happy, healthy and protected," Salesforce's announcement said. A spokeswoman said the company had no further comment.
Last year, California Gov. Gavin Newsom signed the Silenced No More Act into law, essentially rendering nondisclosure agreements useless for companies trying to keep quiet accusations of discrimination and harassment in the workplace.
See: 'Silenced No More Act' becomes law in California, crippling NDAs
Since then, Ifeoma Ozoma, a co-sponsor of the bill, has worked with a coalition to push some of tech's biggest companies to expand the protections of the law beyond California. The coalition has also helped persuade Apple Inc. (AAPL), Alphabet's Google (GOOGL)(GOOGL), Expensify Inc. (EXFY) and Twilio Inc. (TWLO) to announce nondisclosure, nondisparagement and other concealment-clause protections for their employees, either in their proxies or elsewhere. Salesforce is the biggest of the companies to specifically refer to the fact that its policy change is meant to extend the protections of the California law to its other U.S. employees.
In its proxy, Apple said it had committed to including language in its separation agreements that nothing prevents former employees from speaking about harassment, discrimination or any other unlawful act in the workplace. The company therefore urged shareholders to vote against the coalition's proposal, which called for a report assessing the risks of using concealment clauses in its employment agreements. But at the company's annual general meeting in March, a majority of Apple shareholders voted for the coalition's proposal anyway.
See: Apple investors pass two proposals after worker controversy
Alphabet shareholders will also see the issue before them at the company's annual general meeting in June. In its proxy, Google's parent company urged investors to vote against the proposal and said "Google's employment, severance, and settlement agreements do not prohibit the disclosure of facts underlying claims of harassment or discrimination."
At IBM, which had its annual general meeting this week, the proposal received 64.7% of the shareholder vote, according to a company filing with the SEC Friday afternoon.
IBM has not returned a request for comment.
Ozoma said she was grateful to work with the coalition that consists of her consultancy Earthseed, plus Whistle Stop Capital, Open MIC and Frontier Technology, on this effort. The coalition worked with other investment groups on some of the resolutions at different companies.
"A missing piece for successful shareholder advocacy has been some additional lever," Ozoma told MarketWatch. "My expertise was in policy."
She said that means the coalition's approach was to appeal to companies not based on what might be the ethical thing to do but to show them case studies on the possible risks and costs to their bottom lines and reputations.
"A workplace that tolerates harassment invites legal, brand, financial and human capital risk," the coalition's proposals at companies such as Meta read. The proposals then went on to cite examples, such as Pinterest Inc. (PINS) executives being sued by shareholders who accused them of "perpetrating or knowingly ignoring the longstanding and systemic culture of discrimination and retaliation."
Ozoma left Pinterest in 2020 after accusing the company of gender and racial discrimination. The company did not comment publicly on her departure, and later said it supported SB 331, or the Silenced No More Act.
This story has been updated to insert the result from IBM's shareholder meeting.
(END) Dow Jones Newswires
May 02, 2022 08:12 ET (12:12 GMT)
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