Human Resources: Corporate America Leads the Way Toward GLBT Equality

June 07, 2005

The United States still lacks a federal law banning employment discrimination based on sexual orientation, but each year, more companies fill the void left by legislative inaction, according to a report released Monday by the Human Rights Campaign (HRC).

More employers than ever offer some domestic-partner benefits to same-sex couples. As of Dec. 31, 8,250 private employers, state and local governments, government agencies, colleges and universities provided health insurance to employees' domestic partners. That's an increase of 926 employers, or 13 percent, from 2003, according to the sixth annual "State of the Workplace" report, produced by the HRC Foundation's Workplace Project.

Ninety-five percent of the employers tracked by HRC offered the benefits to both same-sex and opposite-sex partners.

Thirty-one Fortune 500 companies added or announced domestic-partner health benefits last year, bringing the total number to 230. Among them were three of The DiversityInc Top 50 Companies for Diversity: Pepsi Bottling Group (No. 14), Sprint (No. 37) and Staples (No. 41).

All of The DiversityInc Top 10 Companies for GLBT Employees offer same-sex domestic-partner benefits, as do 92 percent of Top 50 companies.

HRC's findings suggest that the most successful companies are leaders in providing equal benefits to GLBT employees. While 46 percent of Fortune 500 companies provide health benefits to domestic partners of employees, 76 percent of the Fortune 50 do.

The "State of the Workplace" data comes from direct reports to the HRC, the results of the organization's annual Corporate Equality Index survey, news accounts, GLBT-advocacy organizations and state and local governments.

The report notes that in many respects, "employers, not elected officials, are leading the way toward greater equality."

"Companies are responding to a competitive landscape that has not changed with the political winds," said Daryl Herrschaft, deputy director of the Workplace Project. "The business case for diversity is the same today as it was before last year's elections. Treating people fairly, giving them a safety net so they can focus on jobs, is good for the bottom line."

Many business leaders realize that the best way to compete for talent is to establish corporate policies that don't make any group of workers feel like second-class employees. But the desire to enter and tap into the GLBT market-whose total buying power is an estimated $610 billion, according to Witeck-Combs Communications-also is driving companies to adopt more inclusive policies, Herrschaft said.

"What's unique is the connection that gay consumers make to workplace policies. We know that gay and lesbian consumers tend to be more brand loyal and also more likely to look at employees policies when making a purchasing decision," Herrschaft said.

Those policies also are more inclusive in the public sector, according to the HRC report. Two states-Illinois and New Jersey-began offering health-insurance coverage to employees' same-sex partners last year, bringing the total to 11. Twenty local jurisdictions took the jump in 2004, bringing that total to 185.

The HRC report found that 2,867 private and public employers, including 82 percent of the Fortune 500, listed sexual orientation in their nondiscrimination policies by the end of last year. Once again, the closer to the top of the Fortune 500 list a company is, the more likely it is to be inclusive. Only one of the companies in the Fortune 50 lack such a policy. The lone exception is ExxonMobil, which faces increasing pressure from shareholders to amend its policy with each passing year.

Gender identity isn't as common in nondiscrimination policies, but more companies are adding it. At the end of 2004, 201 private employers and colleges and universities included the terms "gender identity" or "gender expression" in their policies. Among the Fortune 500, 51 companies had such protection, compared with 27 the previous year. Since Dec. 31, another three companies have followed suit.

Among the progressive employers leading the way are Citigroup (No. 3 on The DiversityInc Top 50 Companies for Diversity list), PepsiCo (No. 4), Xerox (No. 7), Ford (No. 11), SBC Communications (No. 15), American Express (No. 22), JPMorgan Chase (No. 25), Prudential Financial (No. 32), Sprint (No. 37), Wells Fargo (No. 40) and Eastman Kodak (No. 44).

There has been an enormous increase in companies addressing transgender issues in the workplace, said Herrschaft. "I think it's just a logical extension of the policy that people should not be fired or discriminated against for reasons that have nothing to do with job performance," he added. "For some employers, it may seem challenging or daunting to address this issue, but the report shows that the challenges are not insurmountable."