BERKSHIRE HATHAWAY INC. | Racial discrimination audit at BERKSHIRE HATHAWAY INC.

Status
0.65% votes in favour
AGM date
Previous AGM date
Proposal number
5
Resolution details
Company ticker
BRK/A US
Lead filer
National Center for Public Policy
Resolution ask
Conduct due diligence, audit or risk/impact assessment
ESG theme
  • Social
ESG sub-theme
  • Diversity, equity & inclusion (DEI)
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Financials
Company HQ country
United States
Resolved clause
Shareholders request that the Board of Directors oversee an independent racial discrimination audit analyzing Berkshire’s legal and reputational risks stemming from its subsidiaries’ race-based initiatives. A report on the audit, prepared at reasonable cost and omitting confidential or proprietary information, should be publicly disclosed on Berkshire’s website.
Whereas clause
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.19

Attorneys General of 13 States warned Fortune 100 companies that SFFA implicates corporate diversity, equity, and inclusion (DEI) programs.20

Prior legal advice regarding the legality of racially discriminatory programs has been called into question post-SFFA.21

The Supreme Court ruled in Muldrow v. City of St. Louis that Title VII of the Civil Rights Act protected against discriminatory job transfers22 and lowered the bar for employees to successfully sue their employers for discrimination.23

Berkshire Hathaway Inc. (“Berkshire”) owns subsidiaries that may be engaging in unethical and illegal racial discrimination under the guise of DEI. For example: (1) GEICO includes on its website race-based employee resource groups;24 (2) Shaw Industries Group, Inc., also offers race-based employee groups,25 and has a supplier diversity program that tracks supplier spend on the basis of race and includes performance goals “set around increasing spend with diverse suppliers”;26 (3) Fruit of the Loom, Inc., includes increasing representation of “ethnically diverse talent” across the organization as one of its sustainability goals.27
Supporting statement
In 2023, a corporation was successfully sued for a single case of discrimination against a white employee resulting in an award of more than $25 million,28 and the risk of being sued for such discrimination appears only to be rising.29 Berkshire’s subsidiaries have as many as 30,000 employees.30 Even if only a fraction of employees file suit, and only some of those prove successful, the cost to the subsidiaries could reach tens of billions of dollars. And that does not include non-employee suits, such as from vendors negatively impacted by a subsidiary’s race-based policies. Sensibly, many major companies have rolled back their DEI commitments and are laying off DEI departments.31 Alphabet and Meta cut DEI staff and DEI-related investments;32 Microsoft and Zoom laid off their entire DEI teams;33 Harley Davidson ceased its DEI efforts34 as did Jack Daniels.35 Since Muldrow, John Deere publicly halted DEI-related policies36 after Tractor Supply explicitly stated that it “eliminate[d] DEI roles and retire[d] our current DEI goals.”37 Notably, when Tractor Supply was the focus of Robby Starbuck’s anti-DEI campaign for three weeks, which merely exposed the truth about its DEI programs, they lost almost $3 billion in market cap.38

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