The proposal was brought in December by Hal Scott, a Harvard University professor who represents a trust with J&J shares. Shareholders were expected to vote on the issue at the annual meeting.
The SEC often rules on divisive proposals that proponents attempt to pass at corporations’ meetings.
On Feb. 11, the SEC ruled that J&J could choose to not hold a vote on the proposal because requiring mandatory arbitration would violate New Jersey state law.
Mandatory arbitration is a contentious issue. Supporters want the SEC to let companies require arbitration, arguing that resolving disputes would be faster and less expensive than heading to court. But opponents say that access to the courts is necessary to uphold investor-protection laws.
Read the full report here.
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