MASTERCARD INCORPORATED | Report on affirmative action risks at MASTERCARD INCORPORATED

Status
Filed
AGM date
Previous AGM date
Proposal number
9
Resolution details
Company ticker
MA
Lead filer
National Center for Public Policy
Resolution ask
Report on or disclose
ESG theme
  • Social
ESG sub-theme
  • Diversity, equity & inclusion (DEI)
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Technology
Company HQ country
United States
Resolved clause
Shareholders request the Board of Directors of Mastercard Incorporated conduct an evaluation and issue a report within the next year, at reasonable cost and excluding confidential information, assessing how the Company’s affirmative action initiatives impact Mastercard’s risks related to actual and perceived discrimination on the basis of protected categories under civil rights law.
Supporting statement
In 2023, the US Supreme Court ruled in SFFA v. Harvard that discriminating on the basis of race in college admissions violates the equal protection clause of the 14th Amendment.1 As a result, the legality of corporate affirmative action programs was called into question2 and thirteen Attorneys General warned that SFFA implicated corporate affirmative action programs.3

In 2024, those implications widened when the Supreme Court ruled in Muldrow v. City of St. Louis that Title VII of the Civil Rights Act protected against discriminatory job transfers.4 The ruling lowered the bar for employees to successfully sue their employers for discrimination,5 and is therefore likely to lead to an increase in discrimination claims.

Finally, the Eleventh Circuit recently held that a company that offered grants only to minority entrepreneurs violated the Civil Rights Act’s prohibition against race-based contracts in American Alliance for Equal Rights v. Fearless Fund.6 Requiring vendors and other business partners to implement affirmative action initiatives similarly discriminates on the basis of race.

Around the same time as SFFA, Starbucks was successfully sued for “reverse discrimination” with damages of $25.6 million,7 and the risk of being sued for such discrimination is rising.8

Despite these obvious risks, Mastercard apparently continues to practice affirmative action in at least the following ways:

1.Mastercard plans to “grow U.S. Black leadership at the vice president level and above at Mastercard by 50% by 2025, from 2020”;9

2.Mastercard plans to “invest $500 million in Black communities”;10

3.Mastercard has “committed to increase our procurement with Black-owned businesses to $100 million annually by 2025.”11

Dividing employees and other stakeholders on the basis of race, and then allocating benefits on that basis, may be deemed immoral, illegal, and a breach of duty. With 30,000-plus employees,12 Mastercard likely has thousands of employees, job applicants, and other stakeholders who are potentially victims of this type of discrimination. If even only a fraction of them file suit, and only some of those prove successful, the cost to Mastercard could reach billions of dollars. Accordingly, it is imperative that Mastercard take action to assess the risks created by its affirmative action programs.

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