So far, five lawsuits have been filed by shareholder proponents challenging company decisions to exclude shareholder proposals from their 2026 proxy materials based on the ordinary business exception:
AT&T: A group of New York City pension funds challenged the company’s exclusion of an EEO-1 workforce diversity disclosure proposal based on the ordinary business exception. The case has been settled, with AT&T agreeing to include the proposal in its proxy statement.
Axon Enterprise: Nathan Cummings Foundation challenged the company’s exclusion of a political spending disclosure proposal based on the ordinary business exception. The case has been settled, with Axon Enterprise agreeing to disclose its policies and governance framework for political contributions and electoral spending made with corporate funds or assets, amounts, and recipients (essentially implemented the underlying proposal).
PepsiCo: PETA challenged the company’s exclusion of a proposal seeking a report on the treatment of animals in the company’s supply chains based on procedural deficiencies. Case has been settled, with PepsiCo agreeing to include the proposal in its proxy statement.
BJ’s Wholesale Club Holdings: New York’s comptroller challenged the company’s exclusion of a deforestation proposal based on the ordinary business exception.
Chubb Limited: As You Sow challenged the company’s exclusion of a climate-related proposal based on the ordinary business and micromanagement exceptions.
UnitedHealth Group: Interfaith Center on Corporate Responsibility challenged the exclusion of a shareholder proposal regarding the company’s acquisition and vertical integration strategies based on the ordinary business exception.
Each of these companies filed exclusion notices with the SEC and included an unqualified representation that they had a reasonable basis for exclusion.
In the absence of substantive SEC responses this year, more proponents may start turning to the court system to force companies to include their proposals. To minimize this risk, companies should consult no-action precedents and clearly explain their basis for excluding a shareholder proposal in their 14a-8(j) notice. Companies may also want to consider the full spectrum of risks and engaging with proponents before excluding a shareholder proposal.
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