On Thursday, July 2, 2020, Bottini & Bottini, Inc,. and Renne Public Law Group filed a shareholder derivative lawsuit against the Board of Directors of Oracle Corporation in the United States District Court for the Northern District of California.
The complaint alleges that Oracle’s Directors, wishing to avoid public backlash, have repeatedly made misrepresentations in the Company’s public statements by claiming to have a multitude of policies, internal controls, and processes designed to ensure diversity both at the management level and the Board itself.
These policies, however, are not worth the paper they are printed on. At Oracle, it is “Do As I Say, Not As I Do.” Oracle’s Board, which has no Black individuals, has consciously failed to carry out Oracle’s written proclamations about increasing diversity in its ranks. The Board, as well as the Company’s executive officers, remain devoid of Black people and other minorities. In short, Oracle remains one of the oldest and most egregious “Old Boy’s Club” in Silicon Valley. A sign advising applicants “Blacks Need Not Apply” might as well hang at the entrance to the Company’s headquarters at 500 Oracle Parkway in Redwood Shores, California.
The complaint alleges that the Director Defendants knew of, but failed to disclose, fraudulent business practices at Oracle that put the Company at material risk — namely, discriminatory hiring and compensation practices. Had this information been disclosed, shareholders would not have voted to reelect Board members, approve executive compensation packages, and reject an independent Board chairman.
Despite at least two Congressional inquiries into the lack of diversity on Oracle’s Board, and a Department of Labor (“DOL”) lawsuit claiming Oracle’s discrimination against minorities resulted in at least $400 million in underpaid salaries, Oracle persists in its refusal to fix its glaring racial disparities. Oracle stands alone in the basement of just a handful of publicly-traded companies that have earned the dubious distinction of having not a single Black person on its board. In short, Oracle’s culture and top ranks are permeated with a backwater attitude about diversity.
The time for change has come. If Oracle’s directors want to continue to be part of the problem, not the solution, then they at least need to be held liable for their breaches of fiduciary duties to the Company’s stockholders. If, on the other hand, they want to be part of real change, they hold the keys themselves. They can (and should), stand up and exercise the control of Oracle that they possess to make change NOW.
Click below to view a copy of the complaint and to read an article about the case.