Resolved clauseRESOLVED: Shareholders ask that the board commission and publish a report on (1) whether the Company engages in any practices directly or indirectly associated with diversity, equity, and inclusion (DEI) initiatives that may create risks of discriminating against individuals who might sue the Company (including employees, suppliers, contractors, and retained professionals) for illegal discrimination on the basis of protected categories like race and sex, and (2) the potential costs of such discrimination to the business.
Whereas clauseWHEREAS: The US Supreme Court ruled in SFFA v. Harvard on June 29, 2023, that discriminating on the basis of race in college admissions violates the equal protection clause of the 14th Amendment.1
Attorneys General of 13 States warned Fortune 100 companies on July 13, 2023, that SFFA implicated corporate diversity, equity, and inclusion (DEI) programs.2
Prior legal advice regarding the legality of racially discriminatory programs has been called into question post-SFFA.3
Recent analysis of American Fortune 100 hiring in the wake of the 2020 race riots found that whites were excluded from 94% of the hiring decisions,4 a statistic that itself provides prima facie proof of illegal discrimination on the basis of race by these companies, given that whites constitute 76% of the American population.5
It was reported in 2021 that Coca-Cola infamously instructed its employees to “be less white,” and that to be less white means to be less “ignorant,” “oppressive” and “arrogant,” alongside a host of other false and discriminatory slurs.6 Ironically, this blatant racism was part of an employee training seminar titled “Confronting Racism.” Today, the Company’s DEI webpage reports that: “It is our aspiration by 2030 to have women hold 50% of senior leadership roles … and in the U.S. to have race and ethnicity representation reflect national census data at all levels.”7 Meanwhile, the “Equity Accountability Councils” (EAC) page reports that: “EACs will focus on economic equity for Asian Pacific, Black, and Hispanic communities.”8
Supporting statementSUPPORTING STATEMENT: In just the past year, a corporation was successfully sued for a single case of discrimination against a white employee resulting in an award of more than $25 million.9 The risk of being sued for such discrimination appears only to be rising.10 With roughly 700,000 employees,11 Coca-Cola likely has at least 525,000 employees who are potentially the victims of this type of illegal discrimination because they are white, Asian, male, or straight.12 Accordingly, even if only 10 percent of such employees were to file suit, and only 10 percent of those prove successful, the cost to the company could exceed $125 billion. And while racial equity audits can cost up to $4 million, this report should cost much less, as it need review only the potentially discriminatory programs, unless Coca-Cola has established so many such programs that its liability for this discrimination must be expected to be much higher.