October 12, 2018
The letter requests that the boards of directors:
In its press release, CtW argues that non-compete and other provisions are "anti-competitive" and limit productivity, growth, and entrepreneurship, while citing "growing appetite among regulators to challenge" no-poach agreements and the use of mandatory arbitration.
However, the link to increased human capital management disclosure is not entirely clear based on either the press release or the letter and seems more tied to CtW's overall focus on human capital metric disclosure in line with its other campaigns (such as with its focus on mandated ESG disclosure).
Focus on 2017 human capital metrics rulemaking petition. In its letter to companies, CtW referenced last year's petition by the Human Capital Management Coalition (a group of 25 investors, including CtW, with $2.8 trillion in assets) asking the SEC to require companies to increase disclosure of human capital management information. The 2017 petition offered nine categories of workforce information deemed "fundamental," including workforce demographics, stability, composition, skills and capabilities, culture and empowerment, health and safety, productivity, compensation, and human rights.
Outlook: Shareholder advocates have had success over the past two years with targeted campaigns (such as Arjuna Capital's campaign on gender pay equity disclosure, which resulted in most targeted companies agreeing to additional disclosure rather than risk a proposal going to a vote). The CtW letter combines several issues percolating at the state and federal levels, some of which apply to specific industries. In addition to increased shareholder pressure, the campaign may foreshadow additional legislative initiatives at the state and federal level, depending on the outcome of the 2018 elections.