WASHINGTON – In the beginning, it was about money as much as rights.
Long before America started rapidly changing its mind about gays, corporate America set the stage. From companies such as Marriott, founded by socially conservative Mormons, to technology giants led by libertarian-minded gurus, business started thinking in the last decade that it was in its best interest to treat gays the same as straights.
That approach is now taking hold more broadly, as a majority of Americans support same-sex marriage for the first time, forcing politicians to jump on the bandwagon and likely changing the country’s politics. While this social change is driven by many factors – a new generation that’s decidedly more open, an older generation adjusting to gays in their families and lives, courts opening the doors – it first took hold at work.
Marriott International, for example, was founded by Mormon John Willard Marriott. By 1999, his son and successor, Bill Marriott, worried about losing highly trained employees to competitors and decided to start providing health benefits for partners of gay and lesbian employees.
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“Bill Marriott got it immediately,” said Apoorva Gandhi, Marriott’s vice president of multicultural affairs. “He thought of it as a business judgment and a fairness judgment.”
“It was really about attracting talent,” said Bob Witeck, a marketing expert who’s worked with the executives at American Airlines, Marriott and other big-name companies to provide same-sex benefits and ban discrimination based on sexual orientation.
By easing into it, Marriott avoided the backlash that the Walt Disney Co. suffered in 1997 when it offered same-sex benefits and allowed Gay Days at theme parks.
“They treated it as a business decision. They didn’t make a public expression of it,” Witeck said of Marriott. “They didn’t put it out in a press release. . . . That approach certainly helped.”
Times have changed rapidly since then. Today, Marriott also aggressively courts gay consumers. It sponsors floats in gay-pride parades. Its home page includes a section courting gay travel that features photos of men kissing. “At Marriott,” it says, “there is no room for inequality.”
“The backlash is almost nonexistent,” said Gandhi, the Marriott vice president. “Some people will say, `I’m not going to stay with you anymore.’ Where are they going to go? All of the hotel chains are doing this. The blowback does not ring true on this.”
The need for a skilled high-tech workforce drove the initial push for same-sex benefits elsewhere, as well.
Companies didn’t care whom employees slept with as long as they could write software programs and understood the fast-moving technology that would soon change American life.
“Tech companies were desperate for employees who could basically expand their business,” said Cathy Woolard, the first openly gay City Council president in Atlanta, who today advises corporations on nondiscrimination policies and same-sex benefits.
“The tech companies were headquartered in Silicon Valley,” she said, “and the places tech companies expanded were places like Austin, Texas, New York and Seattle, where you had large gay communities.”
One such pioneer was the software company Lotus, which was later acquired by IBM. Apple was another.
Companies operating in multiple states also needed uniform rules.
That need drove more than 100 name-brand corporations such as Nike, Starbucks and Johnson & Johnson to urge the U.S. Supreme Court to overturn the federal Defense of Marriage Act. In a joint brief to the court, the companies cited “unnecessary cost and administrative complexity” and said the law “forces us to treat one class of our lawfully married employees differently than another, when our success depends upon the welfare and morale of all employees.”
Businesses push back at states
Corporate America also is speaking up in other venues.
When Arizona’s Legislature passed a state law that would have allowed businesses asserting religious objections to refuse service to same-sex couples, Apple, American Airlines and many other companies threatened to withdraw investment from the state. Their arguments swayed Republican Gov. Jan Brewer to veto the law in February.
When Georgia debated similar legislation, the CEO of Atlanta-based Delta Air Lines, Richard Anderson, warned that the measure would cost local jobs as employers shunned the Peach State. His position helped quash the legislation.
As employers took stands for gay employees, more came out at work. Many straights grew accustomed to a changing workplace.
“As long as they perform their tasks in a professional, workmanlike manner it makes no difference in the workplace whether they’re gay or straight, or have green hair or are covered with tattoos,” said Bryan Edlich, a veteran transportation and logistics specialist in the suburbs of Charlotte, N.C.
“A hiring manager might have used a personal prejudice to preclude that individual from employment. You don’t see that these days,” said Edlich, who’s straight. “There’s much more interest in their skill sets rather than their individual characteristics.”
The changes have been rapid.
When the Human Rights Campaign, a gay rights group, started to rank gay-friendly policies with a Corporate Equality Index in 2002, 319 companies participated and 13 received top scores.
This year, 734 companies participated, and 304 received top scores.
Some big-name companies such as Apple, General Motors and Chevron got perfect scores. But billionaire Warren Buffett’s Berkshire Hathaway Inc. got a zero and energy titan Exxon Mobil got a negative score, penalized for actively working against internal policy changes to allow same-sex benefits, the report said.
“The report is inaccurate,” said Richard D. Keil, a spokesman for the energy company. “Exxon Mobil’s global policies prohibit all forms of discrimination in any company workplace, anywhere in the world. This includes discrimination based on sexual orientation or gender identity.”
In the United States, he said, “we provide benefits to all legally married employees and their spouses, regardless of gender.”
Legally married is the key term. Gay rights groups want Exxon Mobil to follow the lead of big-name firms such as JPMorgan Chase, which provides these benefits to all employees and goes as far as providing reimbursement to offset state and federal taxes paid by same-sex couples who can’t take advantage of tax deductions offered to opposite-sex married filers.
In 2002, 61 percent of Fortune 500 companies provided explicit nondiscrimination protection on the basis of sexual orientation. This year, it’s 91 percent.
By comparison, federal legislation passed the Senate a year ago but is stuck in the House of Representatives.
Investors take note
Corporate America is now rated by investors as well.
Earlier this year, Denver-based ALPS began offering investors a chance to buy shares in an exchange-traded fund that tracks the Workplace Equality Index. The index was created in 2001 by Denver Investments in response to requests from foundations and endowments looking to invest in companies with gay-friendly policies.
The 162 companies on the index have outperformed companies on the S&P 500 index from 2009 forward, data shows.
John Roberts, a partner at Denver Investments, speculated that companies offering more-inclusive policies are being rewarded by grateful employees who work harder.
“There’s a war for talent out there,” he said. “You want the best employees out there, regardless of their . . . gender identity or sexual orientation.”
It wasn’t just employees that American business had in mind over the last decade. It also wanted customers.
The gay community was large and had discretionary income, estimated at $830 billion last year.
Witeck credits the Internet company AOL for pioneering research into the community. AOL created two “gay spaces” on its Web portal long before it became common. By creating a “virtual” gay meeting space where information was shared, AOL provided a metric for assessing the size of the gay community, and its tastes.
Vodka distiller Absolut was one company that early on capitalized on this specific information offered by AOL. It courted gay spending, sponsoring AIDS-related events and later placing colorful ads in high-end gay-targeted publications to reach a niche audience.
Such niche-focused ads are no longer necessary, a testament to the changing public sentiment. Popular TV shows such as “Modern Family,” which includes a gay couple in its cast of characters, command top-dollar ads. Amazon’s ads for its Kindle e-reader included a gay married couple.
Gays are part of the landscape in advertising now, not targeted as a single market. That parallels U.S. Census Bureau data showing fewer “mostly gay” neighborhoods.
“I think that’s a combination of things. Probably largely social acceptance; they feel they can be safe and find other LBGT people in lots of places,” said Gary Gates, a demographer at the Williams Institute at the University of California-Los Angeles.
“If you look at broad social stigma and formal legal equality, it’s been arguably a bumpy road that has been at least five decades in the making. In that sense, it’s not that rapid, and there were clear bumps in the road.”