Roll Out the Barrel: The SEC Reverses its Stance on Employment-Related Shareholder Proposals Under Rule 14a-8 -- Again

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SSRN Electronic Journal

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Patricia R. Uhlenbrock
Elsevier BV
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Recent headlines have shouted the news of multi-million dollar verdicts against large corporations and huge settlement agreements. Texaco, facing adverse publicity as a result of ninety-four discrimination claims, settled those claims for $172 million. Mitsubishi settled a sexual harassment suit filed by the Equal Employment Opportunity Commission (EEOC) for $34 million. Shoney's, Inc., a family restaurant chain, faced a $530 million racial discrimination lawsuit. Shoney's settled for $134.5 million and saw its earnings drop dramatically: "the company posted a $26.6 million loss [in 1992]." Moreover, "in 1996 The Wall Street Journal reported that Shoney's had spent more than $194 million on minority organizations and salaries to repair its image after the lawsuit." In February 1997, Publix Supermarkets settled a sex discrimination claim for $81.5 million. More recently, in November 1997, Home Depot had to pay out more than $104 million to settle sex discrimination claims against its West Coast locations. Consequently, the "November 1997 settlement reduced ... Home Depot's fourth quarter earnings by 25 percent."