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December 26, 2003
‘Tis the Season to Bar Sexual Orientation Discrimination
    by William Baue

The New York City Employees Retirement System files a shareowner resolution asking 11 Fortune 500 companies to explicitly bar sexual orientation discrimination.

During the holiday season, business people brace themselves for the inevitable dreaded gift: a tie or scarf they could never wear because it clashes so blatantly with their own taste. While some recipients send a polite thank-you note and then bury the gift in the closet as if they never received it, the wise ones take another tack: they pass the gift along to someone who truly appreciates it.

This holiday season, the New York City Employees Retirement System (NYCERS) is gifting 11 Fortune 500 companies with a shareowner resolution asking them to explicitly bar sexual orientation discrimination in their equal employment opportunity (EEO) code. While many companies dread receiving shareowner resolutions, others are more prudent, recognizing that they cannot simply ignore or closet their shareowners’ wishes.

One of the companies, CSX (ticker: CSX), sensibly passed the gift along to their gay, lesbian, and bisexual employees by explicitly banning sexual orientation discrimination in its corporate code of ethics. CSX spokesperson Dan Murphy said the company made the change earlier this month “because it’s the right thing to do.”

NYCERS filed the resolution at ten other Fortune 500 companies, including Goodyear (GT), Southern (SO), Waste Management (WMI), and, for the fourth year in a row, ExxonMobil (XOM).

“We expect the companies in which we invest City pension funds to hire and promote employees based on their qualifications and performance—it’s good policy and good business,” said Martha Stark, New York City finance commissioner and chair of the NYCERS board of trustees. “We call on these companies to prohibit discrimination and once and for all resolve doubts about their commitment to equal employment opportunity.”

Before the merger between Exxon and Mobil, Mobil had put in place a formal policy prohibiting sexual orientation discrimination. After the merger, ExxonMobil promptly repealed this policy and has been receiving a sexual orientation nondiscrimination shareowner resolution since. Last year, the resolution received 27.3 percent of the vote at the company’s annual meeting.

“ExxonMobil maintains that its current policy, which does not reference sexual orientation, is adequate,” said Shelley Alpern, director of social research and advocacy at Trillium Asset Management, which co-filed the resolution. “But no court has ever upheld such an interpretation.”

The resolution does not document any instances of overt discrimination at these companies, but rather points out that many regions where they operate require companies to specifically bar sexual orientation discrimination. For example, fourteen states, including New York, and more than 150 cities and counties, including Dallas and the District of Columbia, have laws prohibiting employment discrimination based on sexual orientation.

Four cities (Atlanta, Los Angeles, San Francisco, and Seattle) have gone a step further by adopting legislation restricting business with companies that do not guarantee equal treatment for lesbian and gay employees.

The business case for barring sexual orientation discrimination extends to mainstream consumer perception, as national public opinion polls consistently find more than three-quarters of Americans favor equal workplace rights for gay men, lesbians, and bisexuals. The resolution cites a June 2001 Gallup poll in which 85 percent of respondents supported equal opportunity in employment for gays and lesbians.

NYCERS is a veteran of filing sexual orientation non-discrimination resolutions. NYCERS contended with Cracker Barrel for more than a decade before the parent company, CBRL Group (CBRL), formally barred sexual orientation discrimination last year after the resolution garnered 58 percent of the vote.

“It is important that we send a message to companies that once we file shareholder proposals, we’re not going to go away until they do the right thing,” said William Thompson, the comptroller for New York City who filed the resolutions on behalf of NYCERS. “We will not give up until all of these companies amend their policies to provide equal treatment for all.”


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