Four New York City public pension funds have taken legal action against telecommunications giant AT&T, filing a federal lawsuit Tuesday over the company’s decision to block a shareholder proposal focused on workforce diversity reporting.
The pension funds filed their complaint in Manhattan federal court, alleging that AT&T improperly prevented shareholders from voting on a measure that would require the company to publicly share demographic details of its 133,000 employees broken down by race, ethnicity, and gender.
According to the lawsuit, AT&T justified blocking the proposal by pointing to a November policy update from the U.S. Securities and Exchange Commission that allows companies to exclude shareholder proposals if they can demonstrate a “reasonable basis” for doing so.
However, the pension funds argue that SEC rules don’t provide AT&T with valid grounds to prevent the vote at the company’s 2026 annual shareholder meeting. They claim this exclusion causes “irreparable” harm and are seeking to stop AT&T from gathering shareholder proxies that don’t include their diversity proposal.
The lawsuit reveals that the Dallas-headquartered company already provides this workforce demographic information annually to the U.S. Equal Employment Opportunity Commission. While AT&T made this data available to the public from 2021 through 2023, the company discontinued the practice in 2024 without providing any explanation, according to the complaint.
Neither AT&T nor a representative for New York City Comptroller Mark Levine provided immediate responses to requests for comment on the legal action.
The lawsuit involves several major pension funds, including the New York City Employees’ Retirement System along with retirement funds for police officers, teachers, and other educational workers.
This legal challenge comes amid broader corporate governance discussions. Each year, hundreds of corporations request guidance from the SEC’s Division of Corporation Finance to ensure they won’t face penalties for removing shareholder proposals from voting ballots. Historically, regulators have approved roughly half of these requests.
SEC Chair Paul Atkins has previously stated that numerous shareholder proposals fail to meet legal standards under Delaware law, where AT&T and approximately two-thirds of Fortune 500 companies maintain their corporate registration.
The timing of this lawsuit coincides with shifting corporate attitudes toward diversity initiatives. Many businesses have scaled back their diversity, equity, and inclusion programs following President Donald Trump’s announcement of a federal crackdown on such efforts, including potential civil litigation threats, which he declared shortly after starting his second presidential term.
