Last week, McDonald’s disclosed the extent to which it is using mandatory arbitration and confidentiality clauses in employee agreements. This new disclosure marks a major advancement for corporate transparency in the #MeToo era and comes as a result of dialogue with shareholders. Specifically, the company has reported that it does not require employees to agree to mandatory arbitration of harassment and discrimination claims as a condition of employment and that, if McDonald’s seeks a nondisclosure agreement in connection with a harassment or discrimination claim against an officer, the board of directors will be informed to ensure appropriate oversight.

While the company’s new disclosure makes clear that these clauses are used only in limited circumstances, shareholders urge McDonald’s and all companies to follow Microsoft and Alphabet’s lead and eliminate use of these clauses completely.

Clean Yield’s Director of Shareholder Advocacy, Molly Betournay, praised McDonald’s new disclosure. “With this new level of transparency, McDonald’s has raised the bar for corporations reporting on use of employment clauses that have obscured issues of workplace harassment and discrimination. This is a win for some of the country’s most vulnerable workers. We urge other companies, particularly those in the fast-food industry, to follow suit.”

McDonald’s new disclosure is timely, as a rising tide of state laws have been passed or are under consideration to outlaw use of these provisions. More than sixteen states have introduced bills to address the use of nondisclosure agreements related to sexual harassment, and laws have passed in seven states. In February 2018, attorney generals from all 50 states signed a letter asking that Congress end mandatory arbitration in sexual harassment cases, stating, “ ... [C]oncerns arise from the secrecy requirements of arbitration clauses, which disserve the public interest by keeping both the harassment complaints and any settlements confidential … Ending mandatory arbitration ... would help to put a stop to the culture of silence that protects perpetrators at the cost of their victims.” (https://tinyurl.com/yaxtb67s)

Clean Yield Asset Management is a registered investment manager based in Norwich, Vermont. Clean Yield focuses exclusively on socially responsible asset management, offering clients customized equity and balanced portfolios and the opportunity to invest in high social impact vehicles. 

If you would like more information about this topic, please call Molly Betournay at 802-526-2525 or email (molly@cleanyield.com).

Clean Yield Asset Management

Clean Yield Asset Management

Clean Yield Asset Management is a registered investment manager based in Norwich, Vermont. Clean Yield focuses exclusively on socially responsible asset management, offering clients customized equity and balanced portfolios and the opportunity to invest in high social impact vehicles.

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