In a letter to Disney’s Los Angeles law firm, Fried, Frank, Harris, Shriver & Jacobson released publicly Thursday, lawyers for Disney and Gold said the company had thrown up “unprecedented and unreasonable barriers” to finding out how Fidelity Investments, trustee for the Disney 401(k) plan, cast its votes at the March annual meeting on behalf of participants.
The contentious annual meeting ended with a highly unusual withholding of shares in a no-confidence initiative aimed at outsting Disney chief Michael Eisner. After the vote, the Disney board split Eisner’s former two positions of chairman and chief executive officer and gave the chairman title to former U.S. Senator George Mitchell (See Eisner Protest Vote Reaches 43% ).
In attempting to block access to the 401(k) trustee vote by Disney and Gold, company officials argued that release of the data would violate ERISA’s confidentiality clause designed to protect workers voting their shares from potential company recrimination.
Through their counsel, Disney and Gold said the worry is a red herring. “As we have repeatedly informed the Company, we have no intention of disclosing the voting instructions delivered by any individual 401(k) participant to the 401(k) plans’ trustee,” the Disney/Gold letter stated. “We understand that ERISA’s confidentiality requirements are necessary to protect individual employees from retribution so that employees will feel free to vote their conscience. This concern for individual employees’ continued employment is one of the reasons that the Company is not permitted to receive a record of the individual participants’ voting instructions. However, we do not believe that such concerns, or ERISA’s confidentiality requirements, apply to disclosure of the trustee’s vote of the 401(k) plan shares, where individual participants are not identified and the vote is not broken out by participant.”
The two men asserted that the company’s refusal to release the information forced them to take the issue to a judge.
“Your construction of unprecedented and unreasonable barriers to our access to the voting materials leads us to believe your intent is to delay and obfuscate the release of the voting results,” the letter said. “We regret being forced to take this action (a lawsuit), but you have left us with no other recourse.”