Riverwater Partners Employment Clauses Engagement

By Cindy Bohlen

Chief Mindfulness Officer & Analyst, Riverwater Partners

Riverwater Partners, a Responsible Investment RIA based in Milwaukee, WI, is working in collaboration with Meredith Benton, Whistle Stop Capital, and Molly Betournay, Clean Yield Asset Management, and a few other investors, on an engagement campaign with companies to end the use of Forced Arbitration and Non-Disclosure Agreements in the context of employee harassment and discrimination claims. Riverwater chose to participate in this campaign because we believe the cost and effort to end the use of these tools is insignificant compared to the risks associated with their use, which include human capital costs, legal risk, and brand exposure.

In June, Riverwater sent letters to CEOs and Investor Relations of 24 portfolio companies highlighting said risks, stating that Attorneys General from all 50 states have signed a letter calling for the end of mandatory arbitration in sexual harassment cases, and citing examples of high-profile companies that have ended their use. As of August, we have received responses from eight companies, most indicating they do not use Forced Arbitration/Non-Disclosure Agreements at all. A few with union employees stated that negotiated contracts require certain disputes to be determined by arbitration; given that these terms are negotiated by experts on behalf of the employees, we believe this is fair. In all cases, we are encouraging companies to disclose these policies publicly, as investors have begun to focus on the issue.

Riverwater is in the process of following up with companies that have not yet responded. Our goal is to educate them regarding the risks of using Forced Arbitration and Non-Disclosure Agreements, and to encourage them to either disclose publicly if they are not using such tools, or to end use. We will consider further action, including shareholder resolution, if we deem it appropriate. We welcome participation by others who are concerned about this practice. Please feel free to contact Cindy Bohlen of Riverwater at [email protected] with interest.

Note from SGI: Efforts like this to end mandatory arbitration of sexual harassment claims help to put a stop to the culture of silence that protects perpetrators at the cost of their victims. We salute Cindy for her participation in this important work.