SOCIAL TOPICS (Archive): WORKPLACE

Published, July 2000

       In 1999 — the year after the nation grieved over the murder of gay University of Wyoming student Matthew Shepard — there were 29 anti-gay homicides in the United States.1 And in early 2000, California became the 31st state to ban same-sex marriages. Whereas Anita Hill’s courageous testimony at Clarence Thomas’s Supreme Court confirmation hearings prompted more open discussion of sexual harassment in the workplace, and while the New York Times exhorted us throughout this June to discuss issues of race relations, is Corporate America also confronting our nation’s homophobia?

       In this age of presumed liberal tolerance, how tolerant are we? Key questions for social investors are: how does a climate of intolerance affect gay, lesbian, bisexual and transgendered (GLBT) individuals in the workplace? How are corporations addressing such discrimination? What legal protections, if any, are offered to GLBT employees?

       According to a Newsweek poll in March, while most gay men, lesbians and bisexuals believe straight people are becoming more tolerant, most also perceive “a lot” of discrimination based on sexual orientation.2 Georgetown law professor Chai Feldblum has testified to Congress about numerous examples of workplace discrimination over the past few decades. She noted the following:3

• In 1953, President Eisenhower issued an Executive Order calling for the dismissal of all government employees who were homosexuals.
• A 1987 Wall Street Journal poll of Fortune 500 executives indicated that 66 percent of them would hesitate to give a management job to a gay person.
• A review of 20 surveys conducted across the U.S. between 1980 and 1991 showed that between 16 and 44 percent of gay men and lesbians had experienced discrimination in employment.

       Furthermore, Newsweek found that 36 percent of Americans believe gays should not teach elementary school. Professor Feldblum noted that, because of these concerns, the reaction of most GLBT individuals is to hide their sexual orientation from coworkers. The situation for those who are out can be costly financially as well as emotionally. A study in the May 2000 issue of Demography magazine concludes from U.S. Census data that gay men earn less than heterosexual men.

       Interestingly, Newsweek also found that 83 percent of Americans feel that gay men and lesbians should have equal rights in employment. Proposed federal legislation would guarantee just that. The Employment Non-Discrimination Act (ENDA) would prohibit workplace discrimination based on sexual orientation. The bill prohibits public and private employers and labor unions from discriminating based on sexual orientation in employment decisions, such as hiring, firing, promotion, and compensation. The House bill (H.R. 2355) had 169 cosponsors at year-end 1999, while the Senate bill (S. 1276) had 36 cosponsors. Writing in support of ENDA, Senator Edward Kennedy, a Massachusetts Democrat, cited the case of an Atlanta cook who was fired explicitly because she was a lesbian, and a management consultant from Pennsylvania who was fired explicitly because he was gay.4 He could also have mentioned that in the early 1990s Cracker Barrel Old Country Stores fired several employees because they were gay or lesbian. He could have mentioned dozens of cases, because such practices are legal in 39 states.

       Only eleven states (plus the District of Columbia) prohibit employment discrimination based on sexual orientation. They are California, Connecticut, Hawaii, Massachusetts, Minnesota, Nevada, New Hampshire, New Jersey, Rhode Island, Vermont and Wisconsin. In addition, more than 80 cities and counties outside these states offer employment protection for the GLBT community.

       A number of companies have also adopted policies of inclusion. IBM became, in 1974, the first company to adopt a non-discrimination policy that included sexual orientation.5 As of June 2000, the Human Rights Campaign (HRC) had counted 256 companies among the Fortune 500, including AT&T, Coca-Cola, and Merck, that prohibit discrimination based on sexual orientation. Unfortunately, this is only a few more than in 1996.

       Walden portfolio holdings appear to have a slightly higher rate of inclusion. Of the 128 Walden holdings that had responded by the end of May to our annual equal employment opportunity survey, 76 (or 59.4 percent, compared to 51.2 percent of the Fortune 500) explicitly include sexual orientation in their nondiscrimination policies. While the companies that provided Walden a copy of their nondiscrimination policies may be self-selecting, Walden had not disclosed the reasons for which the policies were requested.

       Policies of non-discrimination do not necessarily extend to benefits for domestic partners of GLBT employees. (Only Vermont recognizes same-sex “civil unions” and confers to partners of such unions all of the rights offered married couples under state law.) The New York independent weekly newspaper The Village Voice became, in 1982, the first company in the U.S. to offer domestic partner (DP) benefits, according to Cracking the Corporate Closet. More than 2,000 companies and other institutions now offer DP benefits, compared to less than 500 in 1996. (About two-thirds of these companies extend this benefit to opposite-sex partners as well.) At least 93 Fortune 500 companies, including Hewlett-Packard, Fannie Mae, and Intel, now offer DP benefits. And, in June 2000, the Big Three automakers announced plans to offer DP benefits.

       Walden first addressed discrimination based on sexual orientation in 1986, developing the first mutual fund policy on this issue. Given the dearth of corporate policies on inclusiveness, our initial efforts were focused on asking questions of companies.

       We have voted consistently in favor of shareholder resolutions filed by colleagues in the social investment community, including the Interfaith Center on Corporate Responsibility, NYCERS, the Pride Foundation, and Trillium Asset Management. Resolutions at ExxonMobil and General Electric would have required the companies to include sexual orientation explicitly in their non-discrimination policies. A proposed resolution at McDonald’s last year led the company to change its policy.

       Last year Walden wrote to United Airlines parent UAL encouraging the company to adopt domestic partnership benefits because of its opposition to a San Francisco DP law. This year we wrote to congratulate Southwest Airlines on its adoption of a nondiscrimination policy. In June 2000, Walden wrote to a half dozen companies encouraging amendment of their nondiscrimination policies to explicitly include sexual orientation. With about half of leading companies offering no explicit protection to GLBT employees, more socially responsive investors need to advocate on this issue.

       This article draws in part on information available from the Human Rights Campaign’s State of the Workplace 1999 report (www.hrc.org), as well as two books: The 100 Best Companies for Gay Men and Lesbians by Ed Mickens, and Cracking the Corporate Closet.

1 “Study: Anti-Gay Crimes Grow More Violent,” Associated Press, April 6, 2000.
2 “Shades of Gay,” Newsweek, March 20, 2000.
3 Prepared Statement of Chai R. Feldblum, Georgetown University Law Center, Before the Senate Committee on Labor and Human Resources, in Support of S. 869, The Employment Non-Discrimination Act of 1997.
4 Should Congress pass the Employment Non-Discrimination Act?” Roll Call, February 15, 1999.
5 Cracking the Corporate Closet: The 200 Best (and Worst) Companies to Work for, Buy from, and Invest in If You’re Gay or Lesbian – and Even if You Aren’t, Daniel Baker, Sean O’Brien, Bill Henning, HarperBusiness, 1994.