AT&T Inc. has reached a swift settlement with several New York City pension funds, agreeing to place a shareholder proposal on its ballot that calls for greater transparency around workforce diversity reporting.
The agreement, filed Wednesday in the U.S. District Court for the Southern District of New York, resolves a lawsuit brought on Feb. 17 by four city retirement systems. The funds had accused AT&T of improperly excluding their proposal from the company’s proxy materials.
The plaintiffs — the New York City Employees’ Retirement System, Teachers’ Retirement System of the City of New York, New York City Police Pension Fund and the New York City Board of Education Retirement System — argued that AT&T unlawfully relied on the “ordinary business” exclusion to omit the measure. That provision allows companies to leave out shareholder proposals that deal primarily with day-to-day operational matters.
Under the settlement, AT&T will include the diversity-reporting proposal in its proxy materials, and the pension funds will dismiss their claims. Each side will bear its own legal fees and court costs.
Dispute Over Diversity Disclosure
At the heart of the dispute is a proposal asking AT&T’s board to adopt a policy requiring public disclosure of a report the company already submits annually to the U.S. Equal Employment Opportunity Commission. That report includes detailed demographic data on the company’s workforce, broken down by race, ethnicity and gender.
