Concerned Coca-Cola shareholders are taking action against the “woke” carbonated soft drink manufacturer for its embrace of race-driven policies.
According to Powerline report, the shareholders were spurred by a January demand by Coca-Cola’s general counsel that law firms representing the company must “commit that at least 30% of each of billed associate and partner time will be from diverse attorneys, and of such amounts at least half will be from Black attorneys.”
If firms do not meet minimum diversity commitments they could face consequences ranging from fee reductions to outright termination.
The American Civil Rights Project sent a letter to Coca-Cola on behalf of shareholders earlier this month demanding the company either “publicly retract the discriminatory outside-counsel policies it announced in January or provide access to the corporate records related to the decision of Coca-Cola’s officers and directors to adopt and retain those illegal policies.”
The policy was introduced via LinkedIn by Bradley M. Gayton, now the ex-senior vice president and general counsel of the Coca-Cola Company — the company announced in April, less than a year after he joined the company, that Gayton was being moved to a “strategic consultant,” according to Bloomberg Law.
“While bold, they are necessary and long overdue if we are going to impact the stagnant progress on diversity within our profession,” he said at the time. “The time has come for us to stop championing good intentions and motivations, and instead, reward action and results. Quite simply, this is now an expectation.”
The policy goal was explained by Gayton who is African-American during an early February interview with Attorney at Law Magazine.
“When I think about impact, what I think we’re fundamentally trying to achieve is driving demand,” he said. “I’m trying to make it unequivocally clear that there is demand for diverse teams of lawyers and we’re going to reward the firms that put those teams together and cultivate and grow those teams.”
The American Civil Rights Project letter cites 42 U.S.C. Section 1981 to say company directors have exposed the company to unlawful race discrimination liabilities.
“By adopting Policies of contracting, refusing to contract, and altering the terms of signed contracts based on the race of Coke’s counterparties, the Coke D&O have exposed Coke and its shareholders to a material risk of liability,” the letter reads.
The letter said “at the time of its January announcement, Coke knew or should have known that the policies it set forth are illegal,” Powerline summarized. “In the unlikely event that Coke didn’t know this, it was so informed by critics and certainly by Boyden Gray in an open letter to the company in April.”
Gray is a distinguished attorney who served under George H.W. Bush as White House Counsel.
The letter noted that on the same day Gray filed his letter Coca-Cola executed and filed with the SEC a Form 10Q omitting any reference whatsoever to the policies considered illegal, according to the ACRP, or Coke’s related liabilities. It claimed that as a result, the company “executed and submitted to the SEC a false “Certification Under 18 USC Section 1350, as Adopted Under Section 906 of the Sarbanes-Oxley Act of 2002.”
Below is the letter from the company’s Shareholders:
“The Stockholders, therefore, demand that you immediately publicly retract the Policies in their entirety,” the ACRP letter concluded. “If we do not receive a response to these demands within 30 business days, we will understand. . .Coke. . .to have refused to address these matters themselves. At that point, the Stockholders will be forced to seek judicial relief to protect Coke and the Stockholders’ interests in the company from the continued breaches of your fiduciary duties.”