April 29, 2003
Will Dover Heed Shareowners' Loud Call for Sexual Orientation Nondiscrimination?
by William Baue
Almost half of Dover shareowners want the company to explicitly add sexual orientation to its
nondiscrimination policy, but the company has yet to commit to such a decision.
Last year's proxy season ended with a record 58 percent vote on the infamous "Cracker Barrel"
shareowner resolution that asked CBRL Group (ticker: CBRL) to bar
sexual orientation discrimination in its Equal Employment Opportunity (EEO) policy. In response,
Cracker Barrel ended its decade-long resistance by adding sexual orientation nondiscrimination
protection to its written EEO policies.
Momentum on the nondiscrimination issue is
continuing into the present proxy season. Last week, 42.8 percent of voting shareowners supported
a resolution calling on New York-based industrial products manufacturer Dover Corporation (DOV) to amend its
EEO policy to include sexual orientation. This represents the second highest vote on a shareowner
resolution regarding a social issue where management recommended a vote against it.
view this vote as a landmark in my thirty-plus years in shareholder advocacy for greater corporate
responsibility," said Tim Smith, senior vice president at Walden Asset Management, which submitted
"A company facing a vote this high by its owners ignores that vote at
its peril," said Nikki Daruwala, senior analyst and shareholder advocacy coordinator for the
Calvert Group, which co-filed the resolution.
However, it remains to be seen whether Dover
will follow in CBRL's footsteps by explicitly adding sexual orientation nondiscrimination to its
"It's not a question of changing policy, it's a question of changing the
written form of the policy," Joe Schmidt, Dover general counsel, told SocialFunds.com. The company
does not discriminate based on sexual orientation, despite the fact that it does not explicitly
guarantee protection against sexual orientation discrimination in its EEO policy, Mr. Schmidt
Ken Scott, a portfolio manager at Walden, pointed out that absence of such a
policy puts companies at a competitive disadvantage. He said that many gay, bisexual, lesbian, and
transgender people avoid working at companies that lack written confirmation to sexual orientation
Their wariness has strong foundation, as a recent Harris
Interactive/Witeck-Combs survey found that 41 percent of gay and lesbian workers in the U.S. report
facing some form of hostility or harassment on the job. The survey also found that almost one out
of every ten gay or lesbian adults stated that they had been fired, or dismissed unfairly, or
pressured to quit a job because of their sexual orientation.
nondiscrimination is in the EEO policies of many of Dover's competitors, such as Cummins (CUM), General Electric (GE), and United Technologies
(UTX). It's also explicitly stated in the policies of a majority of Fortune 500 companies (60
percent), and 90 of the Fortune 100.
In New York State, where Dover operates, Republican
Governor George Pataki signed the Sexual Orientation Non-Discrimination Act (SONDA) in December
2002 to become the thirteenth state to require companies to not discriminate based on sexual
orientation. Dover is one of the largest New York companies not to explicitly prohibit such
discrimination, whereas other large companies operating in New York, such as IBM (IBM), International Paper (IP), and Verizon (VZ),
"So legislative momentum is there," said Mr. Scott. New Mexico recently became the
fourteenth state to enact such legislation.
Popular opinion also supports sexual
orientation nondiscrimination. A June 2001 Gallup poll found that 85 percent of respondents favors
equal opportunity in employment for gays and lesbians.
"We believe it's appropriate that
Dover explicitly add sexual orientation nondiscrimination to its policy, and we hope the company
will," said Mr. Scott.
Mr. Schmidt told SocialFunds.com that the issue is on the agendas
for the Governance and Nominating Committee as well as the Board of Directors at its meeting next