Comptroller Thompson adds gender identity, benefits parity to his Wall Street advocacy
New York City Comptroller William C. Thompson, Jr. has announced that in his role as trustee of the city’s five employee pension funds, he has initiated 18 new shareholder initiatives aimed at bringing greater workplace fairness to gay, lesbian and, in some cases, transgendered, employees of Fortune 500 companies.
Fifteen of those resolutions, filed with the federal Securities and Exchange Commission (SEC) for approval prior to facing shareholder votes, aim for corporate policies that bar discrimination based on sexual orientation, following up on several dozen victories on similar questions that the comptroller’s office has won in recent years.
The other three resolutions, however, if allowed to move forward to shareholder votes by the SEC, hold open the potential for breaking new ground in guaranteeing nondiscrimination protections for gender-variant employees and in giving gay and lesbian couples equal access to partner benefits.
These three initiatives, targeting Toys R Us, Delta Airlines and Cerner Corporation, a Missouri-based leader in health industry information technology, would, if accepted by shareholders, bind the companies to a ten-point commitment known as the Equality Principles. Sponsored by a non-profit, investor coalition, the Equality Project, formed a decade ago as the Wall Street Project to press for fair treatment of gay, lesbian, bisexual and transgender (LGBT) employees of major corporations, the principles include a prohibition on discrimination based on gender identity and expression and a provision that LGBT couples have parity with married spouses in any domestic benefits offered to employees.
Both of these goals represent a new departure for the shareholder resolution movement.
Two years ago, when announcing seven new resolutions sponsored by the city’s pension funds, Thompson, who due to his oversight of such a large employee retirement system, is one of the nation’s largest institutional investors, was asked whether he was then ready to press for transgender protections in corporate America.
“Right now, no,” he told Gay City News at that time.
Thompson’s change of heart came in the wake of an appearance he made last March at the Stonewall Democratic Club, a citywide LGBT club, where he was pressed to expand the scope of his efforts to include resolutions regarding gender identity and expression. Within weeks, Thompson and his staff began meetings with Tom Smith, Stonewall’s president, and Melissa Sklarz, a longtime transgender rights activist who this month became the president of Manhattan’s Gay and Lesbian Independent Democrats, to explore ways to follow up.
According to Sklarz, the group made progress almost immediately.
“Tom Smith and I made a formal presentation that state of art language covers not only sexual orientation, but also gender identity,” she recalled of the first meeting at the comptroller’s office. “Every time we stated a sentence, Bill Thompson finished it.. He understood the nuances implicitly. The comptroller and his staff were open from the outset to our ideas for sexual orientation and gender identity equality.”
“It was wonderful and refreshing to have a politician follow through with his full support,” he said this week. “I am gratified that he has put his time and his energy and the full weight of his office behind this effort.”
“The main goal here is make certain that people aren’t excluded, that everyone is treated fairly,” Thompson said of the effort to tackle gender identity and expression in an interview this week. “It’s taking an extra step.”
Asked whether he thought gender expression nondiscrimination might be a tougher sell on Wall Street than a ban on anti-gay bias, Thompson emphasized that there is precedent in existing corporate policies.
“There are companies out there that do this,” he explained. “It’s not as if companies have never confronted these issues before. Delta wound up on this list because of American Airlines having this policy.”
Thompson is correct—corporate America has begun to add provisions barring gender identity and expression discrimination, along with anti-gay bias, though not to the same extent. According to the WorkNet portion of the Human Rights Campaign’s Web site, an impressive 412 of the Fortune 500 companies have indicated that they ban sexual orientation discrimination, versus 48 who have responded that they also bar bias on the basis of gender identity and expression.
Toys R Us was selected by Thompson as a target in the wake of a long-running lawsuit that Manhattan civil rights attorney Thomas Shanahan pursued on behalf of three transgendered women—Donna McGrath, Tanya Jinks and Tara Lopez—who were the subject of a 2000 attack at the toy company’s Bay Ridge, Brooklyn store, in which employees shouted homophobic slurs and brandished baseball bats. The women won their case, but were given only a dollar in damages, though nearly $200,000 in attorney’s fees were later awarded, and upheld recently on appeal, in a ruling hailed as a vindication of the ability to make gender expression discrimination claims in New York.
Thompson’s decision to address the issue of benefits equality also marks a new step in shareholder activism, one that could have sweeping impact. The SEC exercises tight control over the types of issues that can be put to a shareholder vote, and typically excludes anything regarded as “ordinary business decisions” properly left in the hands of management. In fact, it was only because of efforts by the New York City comptroller’s office that the SEC during the past decade allowed questions of nondiscrimination policy to be put before shareholders. Provision of employee benefits, such as domestic partner health coverage, have typically been viewed as “ordinary business decisions,” so activists have shied away from pushing that issue.
However, according to Grant Lukenbill, an expert on LGBT workplace issues who is co-chair of the Equality Project, Thompson’s new efforts in this regard are not strictly an effort to influence the types of benefits employees receive, but rather a move to ensure that the nondiscrimination policies of corporations are properly enforced when distributing the benefits on which the company’s management decides.
“To put a spin on this as a domestic partner issue is not fair,” Lukenbill said in a telephone interview from San Francisco. “This is instead an effort to ensure that a company’s nondiscrimination policy is appropriately applied to financial benefits.”
Stonewall’s Smith agreed with that assessment.
“The Equality Principles are based in the theory that all employees must be treated equally, and that includes on financial matters,” he said. “It’s one thing to say that there will be no hiring discrimination, but this idea must also be applied to equal benefits, equal pay raises and, for example, equal access to facilities for employee organizations.”
Noting that Toys R Us has formally challenged Thompson’s ability to bring if the Equality Principles to shareholder votes, Lukenbill said that if the comptroller is able to move forward, the impact will be profound.
“If the SEC doesn’t accept Toys R Us’ argument, it will mean that we can conduct a mop-up on employment policies in this country.”
He predicted that similar resolutions could be introduced quickly at untold number of public companies. Currently, according to HRC, 228 of the Fortune 500 companies offer domestic partner benefits.
Toys R Us, based in Wayne, New Jersey, did not respond to a request for comment. Spokespeople for both Delta Airlines, based in Atlanta, and Cerner Corporation indicated that they are still studying the city pension fund resolutions.
Shelly Alpern, who has been active in LGBT shareholder initiatives for years in her position with Trillium Assets, a Boston-based money fund that focuses on socially responsible investments, voiced caution about what she termed Thompson’s test cases. She said that while her company was “observing them closely” and hoping for a good outcome, it remained uncertain how the SEC would view the effort. She added that promoting the Equality Principles in total, versus sexual orientation nondiscrimination standing alone, might be a tougher slog with shareholders.
“It’s easier for Wall Street-types to grasp banning gay bias rather than the broader policy changes now being asked for,” she said in a telephone interview. “I think that investors may think they are being asked to adopt a gay agenda and I’m pessimistic about getting the high votes” achieved on the sexual orientation bias resolutions.
Asked about those comments, Lukenbill noted that Alpern had left the Equality Project board last year after many years of service.
Among those companies that Thompson is targeting with sexual orientation nondiscrimination resolutions this year are Alcoa, Owens-Illinois, Harrah’s Entertainment of Las Vegas, U.S. Steel and ExxonMobil. Previous successes by the comptroller’s office on such resolutions include Cracker Barrel, Winn-Dixie Stores, Marathon Oil, JCPenney, Lockheed Marin, FedEx and Goodyear Tire & Rubber.