State officials urge SEC to probe if Apple misled investors on NDA rules

A group of state treasurers is calling on the Securities and Exchange Commission (SEC) to investigate whether Apple misled its investors and the agency about its use of nondisclosure agreements, which advocates say have long been used to silence mistreated workers, reports The Washington Post.   

In a letter to SEC Chairman Gary Gensler, eight Democratic state treasurers questioned the veracity of Apple’s recent statement to the commission that its policy “is to not use such clauses,” known as concealment clauses.

In December 2021 denied Apple’’s bid to exclude a shareholder proposal that would require the company to inform investors about its use of non-disclosure agreements (NDAs) and other concealment clauses. The tech giant says its policy is not to use concealment clauses, but former employees dispute that.

In September 2021, investor Nia Impact Capital filed a shareholder proposal calling for Apple’s board to 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.”

In October 2021, Apple filed a response with the SEC saying it wanted to exclude the proposal because “the company’s policy is to not use such clauses.” However, the SEC denied Apple’s request, saying that the company had not “substantially implemented the proposal.”

Now, the Post says that the state treasurers are calling for the SEC to step in and determine “whether or not Apple misled the Commission and investors about this matter.” The letter is signed by treasurers from Rhode Island, California, Delaware, Iowa, Illinois, Washington, Colorado and Kansas. 

A bit of background: Cher Scarlett, a central organizer of the #AppleToo movement, said Apple attempted to get her to sign a strict non-disclosure agreement after her departure from the company. She shared the NDA that Apple offered her with Nia Impact Capital, the activist investor seeking to force a shareholder vote around transparency on NDAs at the company. Last month Nia informed the SEC that it had “received information, confidentially provided, that Apple has sought to use concealment clauses in the context of discrimination, harassment, and other workplace labor violation claims.”