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February 05, 2007
Proxy Votes on Sexual Orientation Nondiscrimination Draw Strong Support
    by Anne Moore Odell

Shareholder resolutions calling for equal rights for all employees at Commercial Metals and Micron highlight growing support for companies to include sexual orientation in their nondiscrimination policies.


Two recent shareholder resolutions asking for sexual orientation to be added to companies’ employment nondiscrimination policies met with great success. Micron Technology (MU) revealed on January 10, 2007 in their 10-Q that 55% of shareholders supported an amended policy in a recent proxy vote. Commercial Metals (CMC) shareholders supported 43% in favor to unequivocally add sexual orientation to their Equal Employment Policy.

These two companies are part of a minority of companies that still don’t have inclusive nondiscrimination policies. The Human Rights Campaign reports that over 85% of Fortune 500 Companies have policies that are inclusive of sexual orientation. Although there is no federal law protecting employees from discrimination based on sexual orientation, sixteen states and over 130 cities have passed laws that require companies to protect workers from discrimination based on sexual orientation.

Micron, a maker of semiconductors, is based in Boise, ID. Micron’s nondiscrimination resolution was filed by the New York City Employees' Retirement System (NYCERS) and was moved at its annual meeting by Zack Wright, board member of the Pride Foundation of Seattle, WA.

The Micron resolution states that "corporations with non-discrimination policies relating to sexual orientation have a competitive advantage to recruit and retain employees from the widest talent pool. Employment discrimination on the basis of sexual orientation diminishes employee morale and productivity." The Board of Directors recommended voting against the resolution as discrimination based on sexual orientation is not a federal law.

"We were surprised that we got more than 50% of the vote." Wright of the Pride Foundation told Socialfunds.com. "Micron has already had time to respond to the vote. It doesn’t take a lot of time to add a couple of words to a policy. It seems a bit arrogant that a company would go against the vote of its shareholders."

"A lot of gay employees are afraid to come out at work for fear of losing their jobs," Wright added. "It would be great to have a nondiscrimination policy in place for the Micron employees."

Micron strictly prohibits discrimination and harassment, the company said, with training programs in place to help identify and stop discrimination. Daniel Francisco, Micron spokesman told SocialFunds.com, "We do not allow harassment of any kind. We respect the shareholder vote, and given this, management is evaluating an appropriate response. Specifically, Micron management is evaluating appropriate changes, if any, to its existing policies in response to the shareholder proposal."

Walden Asset Management was the lead filer at Commercial Metals, headquartered in Irving, TX. Pat Tharp of the Social Action Council of Dallas, TX, formally moved the resolution at CMC’s annual meeting. Commercial Metals is a metals manufacturer that manufactures, recycles and markets steel and metal products around the globe.

Like Micron, CMC management stressed that the company does not tolerate discrimination of any form, including sexual orientation. However, as sexual orientation is not a protected under federal law, CMC management does not support the amendment at this time.

David Sudbury, Senior Vice President, Secretary & General Counsel for CMC added, "Approximately 57% of the shareholders voting, a majority, did not support the proposal to amend the existing policy. The Company will continue to monitor both the application and effect of the existing policy and take such steps, if any, that it considers appropriate."

Meredith Benton, Research Associate with Walden Asset Management commented to Socialfunds.com, "It is hard to predict how CMC will respond to the vote. However, with the exception of Micron, whose vote totals were also announced in January, no other company has received such a definitive positive vote on this issue and continued to hold a non-inclusive policy."

ExxonMobil is one the biggest companies not to include sexual orientation in its nondiscrimination policies. ExxonMobil faces a resolution addressing this issue in the upcoming proxy season. Support for this resolution at ExxonMobil has risen steadily from 13% in 2001 to 34.6% in 2006.

Cracker Barrel gained notoriety and media attention after ten years of proxy votes about including sexual orientation as part of their nondiscrimination policies. And in 2002, Cracker Barrel got a 58% shareholder vote in favor of adding sexual orientation to its nondiscrimination policy.

Many companies have added sexual orientation to their nondiscrimination policies before shareholder resolutions were put to proxy vote. For example, in 1997 McDonald’s worked with the Pride Foundation to make a written policy barring discrimination based on sexual orientation.

Although these resolutions are prefatory, management of Micron and CMC will need to respond. While most social issue proxies receive between 5% and 15% of the vote, a 43% and 55% vote shows the support that shareholders have on this issue. If sexual orientation isn’t added into their nondiscrimination policies this year, both Micron and CMC can count on another similar resolution being brought up in the next proxy season.

 

 
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