SEC Rules Bob Evans’ Proxy Must Include Animal Cruelty Resolution

The SEC ruled that Bob Evans must allow shareholders to vote on whether to phase in eggs from cage-free hens

By Kristie Middleton

The U.S. Securities and Exchange Commission ruled last week against Columbus, Ohio-based restaurant chain Bob Evans, requiring the company to allow shareholders to vote on a proposal submitted by The Humane Society of the United States (HSUS). The HSUS’ proposal encourages Bob Evans to begin phasing in cage-free eggs and will be printed in the company’s 2011 proxy materials. Bob Evans petitioned the SEC for permission to block the proposal from being voted on at its shareholder meeting this fall. The animal protection organization challenged the proposed exclusion, and the SEC ruled in the organization’s favor.

Animal welfare has become a prominent corporate social responsibility issue in recent years, with companies focusing on the issue in their CSR reports and through their PR channels. So much so that industry trends analyst Phil Lempert, “The Supermarket Guru,” wrote in his predictions for 2011:

Move over local. Move over organic. Humane is stepping in.

Many of Bob Evans’ major competitors, including Denny’s, Golden Corral, Cracker Barrel, IHOP, and Ruby Tuesday have recognized the growing consumer demand for the humane treatment of animals and have started to use some cage-free eggs.

Why all the flap about eggs?

American egg factories cram some 280 million egg-laying hens into cages so small the birds can’t even spread their wings. Each hen has less space than a sheet of paper on which to spend her entire life. Virtually unable to move, these animals can’t engage in many of their important natural behaviors.

Anyone who has ever spent time around chickens can attest that these animals are highly active and inquisitive. In a more natural setting, they spend half of their active time pecking the ground, searching for seeds and insects. Given the chance, they perch—an activity that has carried down from their ancestors, the red jungle fowl of Southeast Asia who would perch high up in trees at night to keep safe from predators. Perhaps most important to a hen is to lay her eggs in a nesting area. She will seek out a private, secluded spot, dig a shallow hole, and lay her eggs where she can safely raise her young.

The science overwhelmingly demonstrates that confined in cages for their 12-18 month lives, hens’ existences are filled with suffering and that allowing them to live free from cages results in far better welfare. A joint study by The Pew Charitable Trusts and Johns Hopkins School of Public Health—and which included a former USDA Secretary—concluded that battery cages should be phased out.

Unlike their caged counterparts, cage-free hens are able to dustbathe, walk, flap their wings, and lay their eggs in private nesting areas.

Supporting animal welfare initiatives makes good business sense

Consumers want the companies they patronize to support good animal welfare practices. The issue is so prominent that Citigroup wrote in a restaurant industry focus that “concerns over animal cruelty” present a “headline risk” to restaurant companies. In 2008 California voters overwhelmingly voted to ban the cage production of eggs in that state. In 2009, the Michigan legislature passed a similar law.

Many of the largest food companies take animal welfare so seriously that they are actively working in earnest to improve conditions in their supply chains. Bob Evans’ unsuccessful petition for SEC permission to exclude The HSUS’ shareholder proposal from being voted on indicates that it is lagging behind.

Kristie Middleton is the Manager of Corporate Policy and Supply Chain Strategy for Farm Animal Protection at The Humane Society of the United States. Follow her on Twitter.

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