Sexual Equity in the Workplace

By Diane Cadrain Sep 1, 2008

Leaders of pioneering companies identify reasons for having a workplace open to gay, lesbian, bisexual and transgender employees—and steps to create such environments.

When the California Supreme Court sanctioned same-sex marriage last May, some proponents applauded the decision and gave an approving nod to employers. They said the decision simply affirmed the realities of the corporate world, where parity between same-sex and heterosexual couples has been the norm for years.

“The employment sector is way ahead of the courts,” says David Buckel, senior counsel with Lambda Legal, a New York-based national advocacy group for gay, lesbian, bisexual and transgender (GLBT) civil rights. “They already know about attracting and retaining committed employees and making the best face to the public.

“Well over half of the Fortune 500 companies already offer domestic partner benefits. The Fortune 500 doesn’t do things for fun—it all relates to the bottom line. As courts start to fulfill the promise of equality, more employers will line up.”

Although it may be a challenge for some employers—and for HR professionals who may take the lead—to determine how to begin building GLBT inclusiveness in the workplace, experts recommend concrete steps that can be taken. In addition, support is emerging from developments such as the California decision and from the achievements of individual organizations.

Evidence that GLBT employees are finding their workplaces more accommodating can be found in the annual Corporate Equality Index produced by the Human Rights Campaign (HRC), one of the largest GLBT civil rights organizations in the nation. This year, the index, a rating of large U.S. employers on their policies and practices toward GLBT employees and customers, showed 195 major U.S. businesses earning the top rating of 100 percent on multiple criteria—a 41 percent increase from the year before. When the HRC first rolled out the index in 2002, only 13 companies received 100 percent.

And the 2008 Employee Benefits survey report by the Society for Human Resource Management states, “Thirty-six percent of HR professionals reported that their organizations offered health care coverage for dependent grandchildren, opposite-sex domestic partners and same-sex domestic partners.”

Brian McNaught, a consultant and author on GLBT issues, says the California decision “will encourage employers who hesitated because they didn’t know which way the culture was going. As California goes, so goes the country.”

Lisa Wright Borden, a partner with Baker, Donelson, Bearman, Caldwell & Berkowitz PC in Birmingham, Ala., says, “For employers, it will come down to economics. As the workforce changes, with younger employees and applicants coming in, even people who aren’t members of such groups care about employer policies. Big law firms competing for top law students are receiving applicants asking about diversity and pro bono work—a firm would lose a lot of ground if it doesn’t have a good environment.

“It’s a generational issue—older workers were more focused on what they could do for the company, younger workers on what the company [can] do for them.”

Brad Salavich, GLBT diversity manager for IBM in Armonk, N.Y., cites the advantages that positive GLBT policies can have on an organization’s reputation among employees and applicants. “Employers who attract and support GLBT applicants and employees get a leg up in the war for talent,” he says. “They want the best employees, and they want a reputation among applicants as having a culture that supports women, minorities and GLBTs.”

Moreover, Salavich continues, “There’s a direct tie between diversity and innovation. Diverse teams create more innovative products and bring lots of ideas and approaches to the table.”

John D. Finnegan, president, chairman and chief executive officer of the Chubb Group of Insurance Cos.—one of the companies that received a rating of 100 percent on the HRC list—states on its corporate web site that it’s “no coincidence” that Chubb’s financial performance improved as it took steps to make the company “a hospitable and welcoming workplace for all employees, specifically including women, people of color, [and] gay, lesbian, bisexual and transgender employees.” When employees are all alike in background, culture and ways of viewing the world, he continues, a company “is likely to stagnate. On the other hand, a company whose employees bring different perspectives to their jobs is one that will always find more efficient ways to operate and new ways to grow.”

Taking Action

Identifying the reasons why an employer would want a welcoming workplace comes down to good business—from recruitment advantages to competitiveness. Learning how to create a workplace where GLBT employees will be valued can be harder.

Potentially helpful informal guidelines can be drawn from the efforts of organizations and employers. For example, the HRC applies criteria in gauging companies’ policies and practices. Among them:

  • Nondiscrimination policies and diversity training on sexual orientation and gender identity.
  • Domestic partner benefits.
  • Employee resource groups for GLBT employees.
  • Engagement in appropriate and respectful advertising and marketing or sponsorship of GLBT community events or organizations.
  • Demonstration of responsible behavior toward the GLBT community.

In addition, experts recommend some specific approaches:

Update policies and training. Update policies on sexual orientation and gender identity, even in states where they’re not yet legally protected, says Shanti Atkins, president and CEO of ELT, an ethics and legal compliance training firm in San Francisco.

Training remains critical. “Policies don’t change behavior,” Atkins continues. “No one behaves the way they do because of something written in a company policy. Training is what brings policies to life.”

McNaught maintains that “the only way to bridge the gap between corporate policy and corporate culture is via education. Every diversity director in the world would agree that providing training on gay and transgender issues is the only reliable means of helping the corporate culture to catch up with the corporate goal of valuing diversity.”

McNaught adds: “In-house, corporations need to effectively communicate their diversity policies, make clear what behaviors are unacceptable, and evaluate managers by their proactive efforts to create a safe and productive workplace.

All levels of senior leadership should be involved, from production and research to marketing and the law department. 

“Many companies’ efforts originate with their HR managers and directors of diversity, but for the process to be successful, the CEO, COO and CFO should also embrace the concept.”

Examine benefits offerings. “Employers in California will want to review their benefits plans to see whether they provide benefits for spouses,” says attorney Jamerson Allen, a partner in the San Francisco office of the national employment law firm Jackson Lewis. As a result of the state Supreme Court’s decision in May, “benefits provided under state law or employer policy will have to be provided equally to same-sex spouses as is provided to spouses of the opposite sex.”

Benefits provided under state law include health coverage purchased through commercial insurers, but not employers’ self-insured health coverage plans governed by federal law. In California, Allen says, the California Insurance Equality Act already requires that commercial policies covering spouses provide equal coverage to registered domestic partners.

“Accordingly,” he says, “an employer who purchases an insurance policy issued in California becomes contractually bound to cover same-sex spouses and domestic partners to the same extent it covers opposite-sex spouses.”

Companies that do not operate in California–and a handful of states whose laws vary– are not required to offer equal benefits to domestic partners, but they can do so voluntarily. Companies that have employees working in the Golden State may be affected by the decision and should consult with legal counsel.

Develop and support GLBT employee resource groups. To the HRC, this is a crucial step toward achieving workplace equality. Companies can provide groups with small budgets and access to meeting rooms and e-mail networks. The groups get involved in policy-making, recruitment and leadership development. They also have the potential to foster a sense of safety and acceptance for GLBT employees.

“IBM has had a GLBT diversity task force since 1995,” says Salavich. “It helps the company with empowering, attracting and retaining employees and maximizing the potential of GLBT customers.”

An Intersection with Religion

One challenge to workplace parity requires recognizing where religious expression ends and tolerance begins, says Atkins, a former employment attorney who now works with workplace law firms in creating training materials.

“People whose religions disapprove of homosexuality sometimes think that their statements in the workplace are protected religious speech, and that any sanctions against it are religious harassment,” Atkins says. “That can be hard for HR to figure out. Employers must be able to draw the line between requiring respectful and inclusive behavior toward co-workers of all types, and yet stop short of requiring all employees to agree with one another’s lifestyles or religious beliefs.”

Legally, however, “Someone who asserts religious protection for their speech must show that their religion requires the speech,” Atkins explains.

She draws a distinction between Muslims, whose religion requires them to pray five times a day, and employees who would criticize homosexuality. “It’s different for employees to say they ‘need’ to engage in hate speech,” Atkins says, pointing to a series of cases where employees’ religious expression conflicted with companies’ diversity statements.

As a result of these decisions, Atkins says, employers may lawfully terminate employees for violating company policies. Still, this is a rapidly developing area of the law, and at least one court has held that a company may not terminate a Christian employee for not signing a diversity policy that the employee maintains conflicts with the employee’s religious beliefs (Peterson v. Hewlett-Packard Co., 358 F3d 599, 601 (9th Cir. 2004)).

HR professionals need “to be prepared to address potentially volatile communications in the workplace about same-sex marriage and send very clear messages about a company’s rules and expectations,” Atkins advises.

Dealing with Taxes

The federal Defense of Marriage Act (DOMA) of 1996 defines marriage as a legal union between one man and one woman. Because of DOMA, any spousal benefits governed by federal law—Social Security, for example—are provided only to spouses in heterosexual marriages. DOMA also denies to same-sex couples the favorable tax treatment of filing jointly, which is available to heterosexual couples. Many states have enacted similar laws. (In November, California voters will decide whether to approve a proposed constitutional amendment stating that only marriage between a man and a woman is valid in the state.)

“But those laws are all about what the government can and can’t do,” Buckel says. “Employers make the mistake that anti-gay-relationship laws apply to them.” Companies offering domestic partner benefits do not run afoul of these laws, he says.

When giving domestic partner health benefits, Buckel says, keep in mind “the value of the benefits for a same-sex spouse is considered income to the employee. That can be costly—it can bump them into a higher tax bracket.”

But employers can reduce the impact of the higher tax through the practice of “grossing up,” whereby the employer pays the employee an additional sum designed to cover the extra tax that the employee has to pay. “Some employers are doing it. Then that payment gets taxed, but it mitigates the burden and brings employees into greater parity,” he says. “That brings extraordinary loyalty to the company.”

Responsibility On Both Sides

A lot remains to be done before workplaces are routinely regarded as GLBT-friendly, and discussions will continue on the extent of the employer’s responsibility for helping to achieve that result.

“Employers don’t have to change societal culture or to challenge fundamental beliefs,” Salavich says. “But they can expect standards of behavior. They can demonstrate the appropriate respect in the workplace.”

Liz Winfield, founder and principal of Common Ground, a consulting firm in Denver that focuses on workforce diversity education, says, “The responsibility is partly on the individual to come out of the closet, but partly on the employer to create a workplace that will be receptive.”

The author is an attorney and writer based in West Hartford, Conn., and a member of the Human Resource Association of Central Connecticut.

Web Extras

Beyond the Basic Policies

It’s worthwhile for employers to take the basic steps, such as worker education and company policy reviews, in trying to make their workplaces more open to gay, lesbian, bisexual and transgender (GLBT) employees. But employers can do even more, experts and advocates on GLBT issues note. Among their suggestions:

Acknowledge transgender issues. If your organization’s anti-discrimination policy already covers sexual orientation, add gender identity and gender expression.

Gender identity is the gender a person identifies with; gender expression is the gender expressed in personal behavior.
Transgender people are those whose identity, appearance or behavior falls outside of conventional gender norms.

“To be transgender now is what it was to be gay in the ’80s,” says Liz Winfield, founder and principal of Common Ground, a consulting firm that focuses on workforce diversity education.

“It’s an area of human diversity manifesting itself. In addition to adding gender identity and expression to their nondiscrimination policies, companies also need to understand the difference between them.

“Transitioning at work is one of the most challenging issues,” she adds. “Even those who get it intellectually find it difficult in real life.”

Brad Salavich, GLBT diversity manager for IBM, says health insurance is highly important for transgender employees, as are “support during the transition, and training programs for their co-workers.”

Cultivate suppliers. Consider developing relationships with suppliers that offer domestic partner benefits and that have nondiscrimination policies covering race, religion, age, nationality, social or ethnic origin, sexual orientation, gender, gender identity or expression, marital status, pregnancy, political affiliation and disability.

IBM was among the first companies to develop an accreditation program for GLBT suppliers, validating those suppliers so that GLBT-friendly companies would know similarly accommodating companies with which they could do business.

One way to find such suppliers is through the National Gay and Lesbian Chamber of Commerce. It has certified GLBT-owned businesses since 2002.

Consider meeting locations. “Organizations want to avoid states where GLBT employees’ relationships won’t be respected and they won’t feel safe,” says David Buckel, senior counsel with Lambda Legal, a national advocacy group for GLBT civil rights. “If one partner gets hurt and has to go to the hospital, the hospital may consider the uninjured partner a legal stranger.”
Lambda Legal provides a “safety scale” that ranks states on their legal treatment of same-sex relationships.

Communicate publicly in advertising. “Show you welcome GLBT people as employees and customers,” says Brian McNaught, a consultant and author on GLBT issues.

“That shows the company understands their issues and supports them,” McNaught says. “I’m much more interested in a company that puts my face on its literature and much more likely to buy a product pictured in a GLBT publication. That says, ‘I know who you are, and I value you.’ ”


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