Gender Identity Protection: The Inadequacy of Shareholder Action to Amend Corporate Employment Discrimination Policies

By Dale, Danielle R. | Journal of Corporation Law, Winter 2011 | Go to article overview

Gender Identity Protection: The Inadequacy of Shareholder Action to Amend Corporate Employment Discrimination Policies


Dale, Danielle R., Journal of Corporation Law


I. INTRODUCTION
II. BACKGROUND
    A. Gender Identity Disorder
    B. Title VII
    C. Interpretation of Title VII in Cases
       1. Ulane v. Eastern Airlines and the Interpretation That "Sex"
          Does Not Encompass Gender Identity and Does Not Protect
          Transsexuals
       2. Sex Stereotyping and Price Waterhouse v. Hopkins
       3. Smith v. City of Salem, Ohio and the Application of Sex
          Stereotyping to Claims by Transsexuals
       4. Creed v. Family Express and Hope For Plaintiffs Framing
          Their Claim Under Price Waterhouse's Sex-Stereotyping Theory
       5. Etsitty v. Utah Transit Authority and the Binary Conception
          of Sex
       6. Schroer v. Billington and the Possibility That Sex Might
          Possibly Extend to Include Gender Identity
    D. Gender Identity and the Corporate Response
    E. The Business Judgment Rule
III. ANALYSIS
    A. Shareholder Apathy
    B. Shareholder Power to Adopt or Amend Bylaws
    C. The Difficulty for Shareholders to Get Gender Identity onto
       Shareholder Proposals
       1. What is a Shareholder Proposal?
       2. "Unless Otherwise Significantly Related to the Company's
          Business" and Whether That Includes Social Issues
       3. Interpretation of 17 C.F.R. [section] 240.14 by Courts in
          Instances Where Shareholders Have Submitted Proposals to
          Amend the Corporation's Employment Discrimination Policy
          a. Apache Corp. v. New York City Employees' Retirement System
          b. New York City Employees' Retirement System v. SEC
    D. Difficulty for Shareholders Once They Put the Initiative on the
       Ballot
IV. RECOMMENDATION
V. CONCLUSION

I. INTRODUCTION

Under current interpretations of Title VII, transsexuals (1)--those who feel a disconnect between the sexual organs that they were born with and the gender with which they best identify (2)--cannot assert employment discrimination claims against corporations who terminate their employment based solely on their transsexual status. (3) Federal courts interpreting Title VII claims are reluctant to say that transsexuals are a protected class under the statute. (4) Thus, federal law subjects a class of people to the possibility of blatant employment discrimination without any type of federal protection. (5)

Since courts have not yet adopted a bright-line rule that protects individuals with gender identity disorder as a class under Title VII, the question becomes whether there is an alternative route to provide employment discrimination protection for individuals with gender identity disorder. (6) This Note analyzes whether shareholders have the necessary power and tools to influence corporate employment discrimination policies by amending policies through the adoption of shareholder proposals. shareholders are of particular interest because Delaware law provides shareholders with a direct method to amend corporate policy. (7)

Part III.A of this Note addresses the concern of whether shareholders are aware of company policies and the likelihood that shareholders will participate in either proposing or voting for shareholder proposals. Part III.B details the power that Delaware law provides shareholders to amend corporate policies. Part III.c addresses the difficulties that shareholders face when trying to put gender identity protection on shareholder proposals included in the corporation's proxy materials. Last, Part III.D discusses the hardship shareholders face in attempting to garner enough support to pass a proposal once it is included in the proxy materials.

Based on this analysis, this Note concludes that shareholders lack the requisite power to change a company's employment discrimination policies. The deference that courts give to decisions that can be cast in terms of the business judgment rule, coupled with the fact that most shareholders are rationally apathetic, makes it difficult for shareholders to effectively implement these policies through shareholder proposals. …

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