In the LGBT Workplace

ExxonMobil's Gay Problem

The world's largest oil company is under fire for refusing to specifically prohibit discrimination against gays in its employment policy.

May 10, 2006: 6:57 AM EDT

NEW YORK (FORTUNE) — Does ExxonMobil have a problem with gay people?

While much of corporate America has embraced gay rights - by promising not to discriminate against gay workers and offering domestic partner benefits - the world's largest oil company has steadfastly resisted pressures to become more gay-friendly.

ExxonMobil (Research) has been boycotted by gay rights groups, peppered with angry phone calls, criticized in gay-oriented consumer guides and pressured by shareholder resolutions - all to no avail.

To be sure, Exxon Mobil says that it does not discriminate against gay and lesbian workers or, for that matter, anyone else. Nor have its critics brought forward evidence that the company has refused to hire gay people, or treated gay workers unfairly.

But because ExxonMobil has repeatedly declined to prohibit discrimination based on sexual orientation in its written employment policy, its shareholders will vote for the eighth year in a row on whether the company should do so.

The annual meeting of shareholders is May 11. The resolution, which was filed by New York City Comptroller William C. Thompson, Jr. on behalf of the city's pension funds, was supported by 29.5 percent of the votes cast last year.

Out & Equal Workplace Advocates, which promotes safe and fair workplaces for lesbian, gay, bisexual and transgender (LGBT) people, is among 19 gay rights groups that have asked ExxonMobil to change its policy.

Jim Freeman, president of Out & Equal's board and an advocate for LGBT issues at IBM, where he works, says: "Shareholders drive their corporations to improve the productivity of the workforce and serve more customers. Both goals are served by rescinding ExxonMobil's current written employment policy."

"If Exxon Mobil does, in fact, treat their employees as fairly they say they do, why not write it down?" ask Darryl Herrshaft, director of the workplace project at the Human Rights Campaign, a gay and lesbian civil rights group.

"Having the words 'sexual orientation' in the policy could go a long way towards preventing problems," Herrshaft says. "It sets a tone."

An unfriendly tone

For the most part, ExxonMobil has set an unfriendly tone when it comes to gays. When Exxon merged with Mobil in 1999, the merged company rescinded Mobil's anti-discrimination policy, which referred to sexual orientation, and chose not to extend Mobil's domestic partner benefits to new employees. (Former Mobil workers continue to get domestic partner benefits.)

Its actions have put ExxonMobil is out of step with the biggest public companies. All but two companies in the FORTUNE 100—Plains All American Pipeline (Research), an energy firm based in Houston, is the other exception—prohibit discrimination against gays. So do at least 16 states and the District of Columbia.

Meanwhile, 78 of the Fortune 100 offer health and other benefits to the same-sex partners of their employees. Among them are oil companies BP America (Research), Chevron (Research) and Shell (Research).

Eric Matusewich, the deputy director of the New York City Equal Employment Practices Commission and author of the Manager's Handbook on Employment Discrimination Law (Andrews Publications, 2000), says ExxonMobil may worry that if it includes sexual orientation as a "protected class" in its employment policy, that language could be considered a legally binding contract with its employees. Statements made in employee handbooks about due process rights for employees, for example, have been held to be legally binding.

"I'm surprised at ExxonMobil's position, though," Matusewich adds. "A growing number of states and localities, including virtually every large city, do, in fact, prohibit discrimination on the basis of sexual orientation. Consequently, ExxonMobil is subject to that non-discrimination requirement in many areas where it does business."

The Human Rights Campaign, which has battled ExxonMobil since 2000, has been trying to mobilize the buying power of gay Americans to pressure the oil giant. Its Buying for Equality guide (www.hrc.org/buyersguide) recommends filling up the tank with BP brands Amoco and Arco or Chevron brands Caltex and Texaco instead of Exxon or Mobil. The group says gay purchasing power in America has been estimated at $641 billion a year.

ExxonMobil doesn't seem to be suffering. Last month, it reported first quarter profits of $8.4 billion and its earnings of $36 billion in 2005 were a record.

An ExxonMobil spokesman declined, via e-mail, to discuss the issue. Exxon says in its proxy statement that the company "has zero-tolerance discrimination and harassment policies that are comprehensive in nature, rigorously enforced, and applicable to all employees." It goes on to say that those policies prohibit "discrimination or harassment for any reason, including sexual orientation."

You've got to wonder. If ExxonMobil will tell its shareholders that it opposes discrimination on the basis of sexual orientation, why won't it put that into its employment policy to tell its workers the same thing?

Plugged in is a daily column by writers of FORTUNE magazine. Today's columnist, Marc Gunther, is a senior writer.

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Reprinted with permission.

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