Apple to end employee gagging clauses after activist campaign

Apple has agreed to drop all employee gagging clauses related to workplace harassment in a win for shareholders and activists who had pressured the iPhone-maker’s board to investigate following a worker uprising called Apple Together.

The pledge comes after independent counsel found instances in which the $2.3trn company may have restricted employees from speaking out on sensitive issues related to discrimination and abuse. 

In a note published this week called “Our Commitment to an Open and Collaborative Workplace,” Apple said it is committed to “a safe, inclusive and respective work environment” and that “employees have the right to speak freely about their workplace conditions.”

The tech giant said provisions that might bar “a person’s ability to speak about [unlawful] conduct” were only found in “limited instances,” and that it “committed to not enforce those restrictions and to make improvements and clarifications going forward.”

Kristin Hull, chief executive of Nia Capital, who alongside the Minderoo Foundation, led a petition supported by more than 50 per cent of shareholders in a vote last March, said Apple’s concession represented a victory for activists.

“Apple has agreed to remove concealment clauses from employee contracts, both for full-time employees, as well as for contract workers,” she said. “That is huge in itself. Then the fact that this commitment spans for US as well as international workers is also groundbreaking and should set the trend for the rest of US-based companies.”

Activist investors have been stepping up their efforts in recent years. In 2020, Apple published its first-ever human rights policy committing to “freedom of information and expression” after shareholder agitation.

Hull had previously argued Apple’s policies were inconsistently applied and that the company appeared not to know whether its contractors were asked to sign arbitration, non-disclosure or non-disparagement agreements.

Her petition followed a series of allegations that Apple had retaliated against employees complaining of discrimination. This led to the Apple Together online movement with hundreds of employees collecting and sharing their stories.

Apple’s use of concealment clauses received widespread attention in November 2021 when a former software engineer on its security team, Cher Scarlett, broke her non-disclosure agreement by showing media that Apple had made her severance package contingent on withdrawing a work complaint to the National Labor Relations Board and agreeing not to “encourage” other complaints against Apple.

Scarlett’s allegation appeared to contradict Apple’s claim to the Securities and Exchange Commission that it “supports the rights of its employees and contractors to speak freely” about workplace issues, and treasurers from eight US states called on the SEC to investigate. 

Nia successfully lobbied a majority of shareholders to support its call for Apple to investigate, arguing that other tech companies such as Pinterest had suffered negative backlash when workers broke their non-disclosure agreements and spoke up against racism. For Pinterest, this led to a $23mn settlement and a $50mn pledge to promote diversity.

“When previously hidden discrimination or harassment problems surface, multiple employees may step forward at once, creating a sudden and significant brand liability,” Nia said last year.