(Reuters) – The US Securities and Exchange Commission has denied Apple Inc.'s bid to exclude a shareholder proposal that would require the company to inform investors about its use of confidentiality agreements and other secrecy clauses, according to a document seen by Reuters.
The proposal means that Apple will have to face a vote on the proposal at its annual shareholders' meeting next year, with the exception of an agreement with the activist. Apple has said its policy is not to use secrecy clauses, but at least one former employee has denied it and filed a whistleblower report to the Securities and Exchange Commission.
In September, investor Nia Impact Capital submitted a shareholder proposal urging Apple's board to a "public report assessing the potential risks to the company in its use of concealment clauses in connection with harassment, discrimination and other illegal acts."
Apple filed a response to the SEC in October, saying it wanted to exclude the proposal. because "the company's policy is not to use such clauses."
In a letter dated Monday, the SEC rejected Apple's request, saying that the company had not "substantially implemented the proposal."
An Apple spokesman declined to comment to the SEC the letter.
After seeing Apple's response to the SEC on the shareholder proposal, former Apple employee Cher Scarlett said she filed a SEC whistleblower complaint in October, alleging that the company had made false and misleading statements to the regulator. She said she later shared documents with Nia Impact Capital.
Large companies like Apple routinely ask for permission to skip shareholder proposals, requesting that the SEC traditionally grant about half the time.