Shareholders Demand Pfizer Scrap Race-Conscious Policies in the Wake of Civil Rights Lawsuit
Policies endanger company’s entire financing structure, shareholders say
Getty Images Aaron Sibarium • September 27, 2022 5:00 am That didn’t take long. Less than a week after Pfizer was hit with a lawsuit over a fellowship program that excludes whites and Asians, shareholders are demanding that the company scrap a spate of race-conscious policies that they say put it at risk of further litigation. The lawsuit, filed Sept. 15, argues that Pfizer is violating federal law by excluding white and Asian applicants from its prestigious “Breakthrough Fellowship.” In an open letter to Pfizer executives last week, shareholders allege that the program is just one of several policies that invite a “pandora’s box” of civil rights complaints. Beyond the fellowship, they point to an apparent requirement that a fourth of Pfizer directors “identify as ethnically diverse,” according to the company’s ESG reports and corporate governance principles. The pharmaceutical giant has also linked executive pay to the diversity of its employees, with hard targets set for the number of African Americans and Hispanics in management positions.
The letter, filed by the public interest law firm the American Civil Rights Project on behalf of shareholders, is the latest example of corporate investors taking action to challenge reverse discrimination. Over the past year, shareholders in Coca-Cola, JP Morgan, McDonalds, and Lowe’s have threatened to sue executives at each company who’ve implemented race-conscious policies, which they argue invite costly litigation that threatens their interests as stockholders.
The threats persuaded Lowe’s and Coca-Cola to drop a variety of racial quotas. When Starbucks executives ignored similar demands, one nonprofit, the National Center for Public Policy Research, used its stock in the company to file a lawsuit against the coffee giant’s top brass. The center also owns stock in Pfizer, and is one of the shareholders that signed on to the demand letter.
The letter offers a preview of how shareholder activism and traditional civil rights lawsuits can complement each other. It cites the Sept. 15 complaint as evidence that Pfizer’s policies have created a “standing invitation to federal litigation”
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