RESOLVED: Shareholders of Autodesk Inc. (“Autodesk”) ask that the Board of Directors prepare 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. The report should be prepared at reasonable cost and omit proprietary and personal information.
SUPPORTING STATEMENT: Concealment clauses are defined as any employment or post-employment agreement that Autodesk asks employees or contractors to sign to limit their ability to discuss unlawful acts in the workplace, including harassment and discrimination. These can include non-voluntary arbitration agreements (including those with short opt-out periods early in employment), settlement agreements, and non-disclosure or non-disparagement agreements.
WHEREAS: It is appropriate to use concealment clauses in employment agreements to protect confidential corporate information. However, Autodesk's employment-related agreements may prohibit workers from speaking publicly about harassment, discrimination, or other unlawful acts. Harassment and discrimination claims should not be kept confidential. If they are, investors cannot be confident in their knowledge of Autodesk's workplace culture.
A healthy workplace culture is linked to strong returns. For example, the consultancy McKinsey found that companies in the top quartile for workplace culture post a return to shareholders 60 percent higher than median companies and 200 percent higher than organizations in the bottom quartile.
In contrast, a workplace that tolerates harassment invites legal, brand, financial and human capital risk. Companies may experience reduced morale, lost productivity, absenteeism and challenges in attracting and retaining talent. Employees who engage in harmful behavior may also be shielded from accountability by concealment clauses.
Autodesk operates under a quickly changing patchwork of state and federal laws related to the use of concealment clauses and may benefit from a consistent practice of limiting the use of concealment clauses in the context of harassment, discrimination, and other unlawful acts across all employees and contractors, no matter the law of a particular jurisdiction. As of November 21, 2022, “The Speak Out Act,” which limits non-disclosure agreements when sexual harassment is claimed, is expected to soon be signed into federal law by the President. It joins existing federal legislation which ended the use of forced arbitration in workplace sexual assault and harassment cases. Additionally, a number of states, including California, Maine, New York, and Washington, have reduced employers’ abilities to use of concealment clauses.
Pinterest paid $22.5 million to settle a gender discrimination lawsuit brought by a former executive after years of binding employees who settled discrimination claims to concealment agreements. Similarly, in 2020, Alphabet agreed to limit confidentiality restrictions associated with harassment and discrimination cases as part of a $300 million settlement of shareholder lawsuits alleging the company created a toxic work environment. Companies such as Alphabet, Apple, Microsoft, and Salesforce, among others, have now moved away from use of these clauses.
1. https://www.mckinsey.com/business-functions/organization/our-insights/the-organization-blog/culture-4-keys to-why-it-matters
5. https://www.institutionalinvestor.com/article/b1phvnsfffr2bp/Retirement-System-Sues-Pinterest-Board-and Execs-Over-Discrimination