In 1947, civil rights pioneers James Peck and Bayard Rustin, members of the radical religious group, the Fellowship of Reconciliation, and its offshoot, the Congress of Racial Equality (CORE), prepared to embark on the Journey of Reconciliation, an interracial protest against segregated busing in the American South. But first, they did something else radical: they bought shares in a corporation. A year later, after their travels in the South had led to terror, death threats, beatings, and in Rustin’s case, a term on a chain gang, they brought their civil rights activism to a new site of protest—the shareholder meeting of that corporation, Greyhound Bus Lines. Invoking the shareholder proposal rule adopted a few years before by the Securities and Exchange Commission (SEC), Peck and Rustin insisted that as shareholders they had a right to voice their opinions about Greyhound’s segregation policies and to poll other shareholders on the issue. When Greyhound refused to send their proposal to other shareholders in its proxy statement, they brought the case that became known as Peck v. Greyhound. In 1952, to end the case and future litigation, the SEC changed its rules and held that shareholders could not use the shareholder proposal mechanism “primarily for the purpose of promoting . . . racial, religious, or social or similar causes.” In this landmark case, we see the collision of race and the corporate and securities laws, as radicals attempted to use those laws to pursue social justice, while those charged with administering them insisted that race had no role to play in the corporation—in the process paradoxically writing race into the nation’s securities laws.
Harwell Wells, Shareholder Meetings and Freedom Rides: The Story of Peck v. Greyhound, 45 SEATTLE U. L. REV. 1 (2021).