An activist investor is suing UnitedHealth Group in a bid to pressure the company to include details on the impact of its vertical integration activities in its annual proxy filing.
The Quebec-based Congregation des Soeurs des Saints Noms de Jesus et de Marie, a member of the Interfaith Center on Corporate Responsibility (ICCR), filed the lawsuit Friday in the District of Columbia federal court, arguing that proponents of the proposal requested that the healthcare giant publish a report diving into the effects of its acquisitions and integration strategy over the past decade.
In the proposal, the investors expressed concern that the company’s level of vertical integration could “create risks for the healthcare system.”
UnitedHealth responded in a letter to the Securities and Exchange Commission that it had a “reasonable basis to exclude the proposal,” and the agency agreed in mid-February.
“The Company represents that it has a reasonable basis to exclude the proposal,” the SEC said in a response letter (PDF). “Based solely on that representation, we will not object if the company excludes the proposal from its proxy materials.”
In its missive to the SEC, UnitedHealth said that the proposal “seeks to impermissibly micromanage the company” over something that pertains to “ordinary business.”
The proposal’s proponents, however, argue that the scale of the company’s acquisitions is a policy issue that goes beyond normal business matters, and that public concern about vertical integration means additional scrutiny is warranted.
As the SEC did not object to UHG excluding the proposal, the filing shareholders have chosen to pursue legal action to compel the company to comply.
The congregation made a similar attempt a year ago to force the company to shine additional light on how it uses utilization management, which was later withdrawn.
ICCR said the group’s push for transparency comes as the SEC has determined it will no longer review requests from companies to exclude shareholder proposals. As of November 2025, the agency will instead send companies a “no objection” letter on the request.
Other shareholder lawsuits have cropped up as a result of this policy change, ICCR said.
“Last year we submitted our resolution with UnitedHealth because we knew that sunlight is the best disinfectant and that shareholders have a right to clarity around how strategic decisions made by corporate leaders will impact the value of their shares and the wider sector in which they operate,” said Timnit Ghermay, a representative of the congregation, in the press release.
“Rather than work with us on our reasonable request, UnitedHealth decided to try and exploit the ongoing lack of both vigilance and commitment to accountability on the part of the SEC’s current leadership,” Ghermay said. “This lawsuit is in response to those attempts and flows from our belief that our rights as shareholders are worth defending.”
