While politicians and judges dither over legislation, small but radical shifts are taking place outside the political arena. It’s like Gandhi famously said and Martin Luther King Jr. famously quoted: “There go my people. I must catch them, for I am their leader.”
At the commemoration of the 1963 March on Washington last weekend, it was clear that many people consider gay rights the new civil rights. Mixed in with the cries for racial justice at the rally on the mall were appeals for tolerance for gays and lesbians. Gay issues came front and center this summer after the Supreme Court ruling on sodomy in Texas sparked debate on gay marriage. But while a political storm on gay rights is brewing in Washington, Corporate America has ended the debate. Some of the nation’s biggest and best companies are moving forward on issues like domestic-partner health benefits. “The Supreme Court rulings are catching up with corporate strategy,” explains senior benefits consultant Tom Casey of Buck Consultants, a subsidiary of Mellon Financial.
This week, the Human Rights Campaign, a gay advocacy group, came out with its second annual “Corporate Equality Index” report. The index scores the largest companies on issues like nondiscrimination policies and same-sex partner benefits. This year, the number of U.S. corporations winning a 100 percent rating nearly doubled to 21. Most telling, 198 of Fortune 500 companies now offer benefits to their employees’ gay and lesbian partners. In 1992, there was just one publicly traded company–software maker Lotus Development Corp. (now part of IBM, which has the same policy)–that did so. “Domestic-partner benefits have become a competitive issue,” says Kim Mills, HRC’s education director and editor of the report.
For some companies, offering these benefits is a political statement. Ben & Jerry’s started making them available to employees a decade ago because it fit with the ice-cream-maker’s liberal image. Since then, diversity has become a marketing point for many companies. BrownCo–the discount-brokerage arm of J.P. Morgan–even took out a recruitment ad in a recent OUT magazine that boasted that it had a 100 percent rating from HRC. Companies from Apple to Xerox can now do the same. “We want to be a 21st-century employer,” says a spokeswoman for General Electric, which will begin offering such benefits in January.
At Lockheed Martin there are now diversity councils that advise the company and a group called GLBAL–Gay-Lesbian-Bi at Lockheed. Dwayne Neal, who works for the company in Oswego, N.Y., and helped found GLBAL, began lobbying for same-sex benefits a few years ago. “We lost a lot of people out of frustration and financial need,” he says. But this summer, Lockheed began offering the benefits and won HRC’s “most improved” company, going from a zero rating to a 71 percent rating this year.
Neal’s lobbying certainly had something to do with the change. But it also was good public relations. “Companies do it because they feel it looks good for them,” explains Ken McConnell, research analyst at the Employee Benefits Research Institute. He says that younger workers see tolerance on gay issues as a gauge of a good working environment overall. During the research for HRC’s report, Mills says, “We hear from HR people that job candidates are coming in are asking, ‘What’s your discrimination policy?’ Often they are straight but they see it as an indicator of the atmosphere inside a company.”
A lot has changed since the Walt Disney Co. first announced that is was offering partner benefits several years ago and the Southern Baptists threatened a boycott. The Lion King won. Today, a telling sign that the social climate has changed is that the United Auto Workers insisted on same-sex benefits during their negotiations with the Big Three automakers. The recent Supreme Court rulings have only made such benefits more likely. “These cases are giving companies social permission,” Casey says.
But it’s the bottom line that is really driving these changes. “It’s easy–and it’s cheap,” McConnell says. Companies didn’t say it out loud, but initially they were scared that benefits for gay partners would saddle them with staggering AIDS bills. “There was a misconception that the people who use the benefits would all have AIDS,” Mills says. In fact, she says, “heart disease costs more.” When companies offer domestic partner benefits to both straight and gay couples, straight partners use them more. Gay couples who do use the benefits are often less expensive than straight couples, explains Ilse de Veer, a senior benefits consultant at Mercer Human Resource Consulting. “The costs are lower than for spouses.” de Veer explains. “Domestic partners tend to be a little younger and there is a lower incidence of maternity.”
With little financial downside, corporations see these benefits as a way to compete in a tight labor market. During the tech boom, companies like Lotus started offering competitive benefits packages to lure workers. Even today, with the tech bust and a so-called jobless recovery, companies know that good employees will soon enough be hard to find once again. Birthrates have been declining since the 1940s. “The court decisions are basically confirming what most benefits and HR strategist have seen–the inevitability of demographics,” Buck Consultant’s Casey says. Unlike business, politics is all too often not based on either the bottom line or common sense.
