|
|
Gay RightsShareholders' power is the new weaponin fight for workplace equalityBy Michael S. Markowitz, Newsday.com January 4, 2004Cracker Barrel calls itself the "little old country store from Lebanon, Tenn." But to gay men and lesbians, the rustic, down-home values ballyhooed by the family restaurant chain sounded a lot like country-speak for "discrimination." In at least 11 reported cases in the 1990s, Cracker Barrel fired workers for being homosexual, sometimes issuing pink slips that flat-out stated, "Employee is gay." Management even circulated a memo once reminding all Cracker Barrel employees that they must exhibit "normal, heterosexual values" to keep their jobs. A little more than a year ago, though, Cracker Barrel began singing a new ditty. CBRL Group Inc., the chain's publicly traded parent company, added the words "sexual orientation" to its nondiscrimination policy, capitulating after a long series of protests and a nationwide boycott by gays. A major impetus for CBRL's turnabout was a campaign by irate shareholders, who worked for a decade to pass a resolution demanding change. Along the way, they enlisted a powerful ally: New York City's public employee pension funds. By the time CBRL's board adopted the anti-discrimination measure, in late November 2002, voters controlling 58 percent of CBRL's outstanding shares had already filed proxy statements backing the resolution, and the giant New York City Employees Retirement System, which controlled 189,000 shares of CBRL at the time of the vote, had been instrumental in building support for the resolution. Spurred by their Cracker Barrel victory, proponents of anti-discrimination policies covering sexual orientation launched an unprecedented wave of shareholder resolutions in 2003, with New York's pension funds once again joining the battle. City Comptroller William C. Thompson Jr., who currently controls the pension funds and their $78.6 billion in holdings, filed a dozen shareholder resolutions in 2003 calling for companies to add sexual orientation to their nondiscrimination policies, most of them in the name of the NYCERS and the NYCTRS, the New York City Teachers Retirement System. Thompson, a Democrat and a likely candidate for mayor in 2005, says he is planning to continue his campaign this year. As deadlines loom for initiatives that will be part of this year's proxy statements for major companies, the comptroller's office has already notified at least a half-dozen Fortune 500 companies that they will be the targets of shareholder resolutions related to their nondiscrimination policies. Among those companies is Exxon Mobil, where activists promised to continue pressing the issue after a resolution amending the nondiscrimination policy drew about 27 percent of the vote in May. "The one thing that Cracker Barrel showed us is that perseverance does pay off," Thompson says. "We're going to keep coming back at [Exxon Mobil] again and again." The growing use of resolutions to promote nondiscrimination policies is part of a recent upswing in shareholder activism on a variety of issues, particularly environmental causes and corporate governance. Shareholders have also campaigned to reform business practices in countries linked to international terrorism, to curb the marketing of tobacco to youngsters abroad and to improve working conditions in foreign factories, among other issues. According to the Investor Responsibility Research Center in Washington, 1,035 shareholder resolutions were filed in 2003, up from 802 the year before and 739 in 2001. On the gay-rights front, shareholder activists say their work helped prod aerospace giant Lockheed Martin (which has a unit based at Mitchel Field in Nassau County) to take steps that dramatically improved its score in an annual report card on workplace conditions issued by the Washington-based Human Rights Campaign, the nation's largest gay activist group. Companies such as FedEx, Wal-Mart and J.C. Penney, and Duke Energy, which through a subsidiary is building a gas pipeline linking Connecticut and Long Island, also changed their policies recently, in part because of work done either publicly or behind the scenes by stockholders. CSX, one of the companies Thompson planned to target in 2004, said in December that it had already decided to amend its policy and the comptroller withdrew the proposed resolution. In 1999, only one proposal related to sexual orientation went before shareholders and it received 8 percent of the vote, says Meg Voorhes, director of the Investor Responsibility Research Center's Social Issues Service. There was one proposal in 2000 and one in 2001, but as momentum built toward the CBRL vote in 2002, five proposals reached shareholders and they garnered an average of 22 percent of the vote. The 2003 crop drew an average of 31 percent. Under Securities and Exchange Commission rules, any proposal that draws at least 10 percent can be reintroduced. "I think what's happening is that this issue is becoming a mainstream issue," Voorhes said. "There's been a lot of activity and it's another sign of how U.S. public opinion has been changing on this issue overall." Those involved in promoting these resolutions say that institutional shareholders, especially the public employee pension funds with large stakes in major companies, have made a big difference in these campaigns. Unlike the activists, liberal church groups and charitable foundations that often lay the groundwork for resolutions, institutional holders have the clout to make management and corporate directors pay attention. "Institutions have been very important," said Shelly Alpern, an assistant vice president at Trillium Asset Management, a Boston-based firm that promotes "socially responsible" investing. "The advantage of having an institutional holder file these resolutions is that companies always return their phone calls. If they want a dialogue, they get it." Although critics of such activism complain that it amounts to "social engineering," Thompson insists that it is possible to demand both corporate responsibility and high investment returns. "Some companies already understand that it is good business sense to send the message out that all employees are welcome," he said. "From a fiduciary point of view, I have to do what's in the best interest of the members of my pension fund.... To the members of our pension funds, I would say that this is good business and we're truly acting in their best interests." For 2004, Thompson has already served notice that he will back gay-friendly initiatives at such widely held companies as AES Corp. of Arlington, Va.; Alltell of Little Rock, Ark.; CenterPoint Energy of Houston; Goodyear of Akron, Ohio; HCA Inc. of Nashville; Lear Corp. of Southfield, Mich.; the Southern Company of Atlanta, and Waste Management of Houston. The teachers' and employees' fund together hold between 200,000 and 2.5 million shares in each of these companies. The biggest battleground, however, is likely to be Exxon Mobil, where chairman Lee Raymond is viewed as a staunch opponent of changes to the company's policies. (Mobil Oil had a number of "gay-friendly" policies, but those were rescinded after it merged with Exxon in 1999.) "That is the one company that we have targeted and been involved with repeatedly," says Kim Mills, the Human Rights Campaign's education director. "We haven't succeeded yet, but I think that we have been able to raise the consciousness of the gay and lesbian and allied community around the fact that Exxon Mobil continues to oppose this resolution for reasons that no one can understand." A representative for Exxon Mobil did not return a call seeking comment. The Human Rights Campaign identifies 352 Fortune 500 companies that bar discrimination based on sexual orientation. They include Arrow Electronics, Melville; Keyspan Inc., Brooklyn; Cablevision, Bethpage; Verizon, New York City; Consolidated Edison Co., New York, and Computer Associates, Islandia. Also on the list is Avnet Inc. of Phoenix, which was headquartered in Great Neck until 1998. Tribune Co. of Chicago, Newsday's parent, also bars such discrimination. Private companies on the list include Adecco North America, Melville; Brookhaven National Laboratory, Upton; Forest Laboratories Inc., New York City, and Nettradedirect.com Corp., Plainview. Workers at companies that already have nondiscrimination policies say they make a big difference. Although discrimination is rarely as overt as it was at Cracker Barrel, it remains legal in 36 states to fire someone based on his or her sexual orientation (New York, New Jersey and Connecticut bar such discrimination). Being recognized as a matter of corporate policy not only gives gay and lesbian employees a legal leg to stand on when problems crop up, it sends a signal that they are welcome to live their lives as openly as anyone else. "I put a lot of my energies into my job here and it's fairly entwined with my life, and to not have to hide what my life is very important to me," said Chuck Harms, a manager with Lucent Technologies in Whippany, N.J. AT&T, which spun off Lucent in the mid-'90s, was one of the first big corporations to make sexual orientation part of its nondiscrimination policy, and it happened without a shareholder resolution. Harms, a resident of High Bridge, N.J., says that he's felt welcome during his entire 22-year career with the company, and that its nondiscrimination statement, its active minority employee groups and its domestic partnership benefit programs have made it easier to recruit talented workers - among them young heterosexuals who view a company's policies toward gays as an important indicator of what the corporate culture is like. "Employees and prospective employees these days look for policies that say that a business is a truly welcoming place to work," says Mills. Today, about 350 members of the Fortune 500 bar discrimination against gays and lesbians and another 250 offer domestic partnership benefits, according to gay organizations. For now, there are limits to the kinds of issues that can be pursued by shareholders. Some activists would like to use resolutions to push for domestic partner benefits, arguing that it is hollow of companies to proclaim that all workers are equal but to give insurance only to the spouses and families of heterosexuals. The Securities and Exchange Commission, however, has ruled that benefit plans come under the umbrella of ordinary business and therefore are not subject to shareholder votes. Grant Lukenbill, a San Francisco-based author and the vice chairman of the Equality Project, an organization devoted to promoting gay and lesbian shareholder initiatives, says resolutions are most effective as part of a "multifaceted approach." "In truth, by the time a resolution comes up, the company has probably already been lobbied by gay and lesbian groups, by employee resource groups and has watched its competitors change their policies," he says. Sometimes resolutions are withdrawn without a vote because the company agrees to make a change. CSX, for example, said it had begun reviewing its code of ethics even before the New York City comptroller filed a resolution in late November. When a resolution was filed at J.C. take a few years to translate that into votes." Tracking the ChangeIn 2003, the New York City Comptroller's Office used shareholder resolutions to ask companies to add sexual orientation to their nondiscrimination policies. All but two of the companies agreed to do so.
Agreed to terms before resolution filed: Lockheed Martin, Bethesda, Md. Aerospace/defense
Resolution passed by shareholders: J.C. Penney, Plano, Texas 93.3 percent voted for changes
Agreed to make the changes before the resolution came up for a vote: American Electric Power, Columbus, Ohio Duke Energy, Charlotte, N.C. FedEx, Memphis, Tenn. Marathon Oil, Houston TXU Corp., Dallas. Electric utilities Ingram Micro, Santa Ana, Calif. Computer hardware
Resolution failed on shareholders vote: Exxon Mobil, Irving, Texas Backed by 27.8 percent CenterPoint Energy, Houston Backed by 32 percent SOURCE: City of New York, Office of the Comptroller
Pressure From The PensionsThe New York City Comptroller's Office has been able to seek change in nondiscrimination policies because they control large blocks of stocks in certain companies. Millions of dollars in shares are held in two pension funds, the New York City Employees Retirement System (NYCERS) and the New York City Teachers Retirement System (NYCTRS). Values reflect the stocks' Dec. 30, 2003 closing prices. Company Value of NYCERS shares Value of NYCTRS shares (in millions rounded) HCA Inc., Nashville, Tenn., Healthcare facilities $79.7 n/a Waste Management Inc., Houston $76.2 n/a Southern Company Inc., Atlanta, Electric utilities $69.9 n/a Alltel Corp., Little Rock, Arkl, Communication services $26.4 13.0 CSX Corp., Jacksonville, Fla., Railroad transportation $14.6 5.7 CenterPoint Energy Inc., Houston, Public utility holding company $9.3 n/a Lear Corp., Southfield Mich., Auto interior design $7.5 $4.4 AES Corp., Arlington, Va., Global power $7.3 32 Smurfit-Stone Container Corp., Chicago, cardboard packaging $5.2 1.9 Goodyear Tire & Rubber Co., Akron, Ohio $3.2 n/a n/a= Not applicable, fund is not a shareholder SOURCES: City of New York, Office of the Comptroller, Edgar ONline, Yahoo Finance |
Send mail to
email@gaypasg.org with questions or comments about this web site.
|