One chilly fall day last year, Gary Osifchin trooped into a mandatory training session at S.C. Johnson & Son Inc. The privately held company, located in Racine, Wis., which was voted 2003's "all-American city" by the National Civic League, manufactures Raid insecticide and Glade air fresheners. It's the kind of place where factory workers ride to the assembly line on Harley-Davidsons, dine on local bratwurst, and chase it down with Milwaukee beer.
About 20 plant managers were seated in a circle in a drab conference room. Osifchin, an S.C. Johnson marketing exec, walked into the center and started telling stories -- about his boyfriend, his romantic life, and his experiences as a homosexual. He told co-workers, for instance, that one constant source of stress was having to come out anew every time he sat down with a new supervisor or switched units. "Somebody might see a picture of a guy on my desk, and that just sparks conversation," he said.
The frank talk was the kickoff of Gay 201, the upper-level course in gay sensitivity training offered at S.C. Johnson. It's available only to graduates of Gay 101, an introductory seminar that debunks stereotypes. The classes at Johnson are hardly anomalous. Eastman Kodak Co. (EK) offers similar sessions. Lucent Technologies (LU), Microsoft (MSFT), Southern California Edison (EIX), and dozens of others, meanwhile, send executives to weeklong training courses for gay managers at the University of California at Los Angeles' Anderson School of Management.
The programs are just one small piece of a growing gay, lesbian, bisexual, and transgender (GLBT) rights movement in Corporate America. Following in the footsteps of African Americans, women, and other traditionally marginalized groups, corporate gays are increasingly standing up for their rights. Defense contractors such as Raytheon Co. (RTN) and Lockheed Martin Corp. (LMT) now sponsor gay support groups. American Express Co. (AXP) and Lehman Brothers Inc. (LEH) promote their gay financial advisers in GLBT publications. Even culturally conservative Wal-Mart Stores Inc. (WMT), which bans racy magazines and compact discs with offensive lyrics, this year adopted a nondiscrimination policy toward gays.
The new attitude of GLBT acceptance in the business world stems from the same cultural forces that, in recent months, have led to openly gay clergy, the television hit Queer Eye for the Straight Guy, the Supreme Court's landmark Lawrence v. Texas decision banning anti-sodomy laws, and the prospect of gay marriage in Massachusetts. Change is coming quite rapidly to corporations as well. Of the nation's top 500 companies, 95% now offer policies that preclude discrimination based on sexual orientation, and 70% offer domestic partner benefits for same-sex couples. In 2000, the numbers stood at 51% and 25%, respectively. "To be competitive, we need to be able to get the best from people when they're at work, and to do that they need to bring their whole self to the table," says Marge Connelly, director of operations at credit-card issuer Capital One Financial Corp. (COF). She should know -- she's a lesbian. "Being out is imperative for me to be a good leader," Connelly says. "You've got to let people know you. People have to trust you."
TOUGHER AT THE TOP
Still, it comes as no surprise that, as is the case with society at large, gays still face plenty of discrimination in their jobs. In a study released on Oct. 1 by researcher Harris Interactive Inc. (HPOL) and marketer Witeck Combs Communications Inc., 41% of gay employees said they had been harassed, pressured to quit, or denied a promotion because of sexual orientation. Homosexuality is still legitimate legal grounds for firing an employee in 36 states. "For a lot of people, the fear is very real and justified that if you are openly gay in the workplace, it will jeopardize your earning potential," says Walter B. Schubert Jr., the first openly gay member of the New York Stock Exchange.
So while gays may have won more acceptance at work, that does not mean they have gained legal, financial, and occupational equality. Intolerance that has built up over centuries does not disappear because of the sudden emergence of harassment-training videos and rainbow flags in cubicles. Many members of the GLBT community believe that discrimination increases as they rise up the corporate hierarchy into the executive suites, boardrooms, and country clubs where true power is wielded.
Need proof? Just look at a list of openly gay corporate leaders. While there are some big names -- including DreamWorks SKG co-founder David Geffen, former Quark CEO Tim Gill, and Ford (F) Vice-Chairman Allan D. Gilmour -- it is pretty paltry roster for a highly educated minority that comprises, by some estimates, 6% of the population. In fact, many corporate CEOs who are widely believed to be gay are not comfortable discussing their sexuality on the record. The price of success, even in 2003, may be having to stay in the closet.
Ironically, many of the companies that are most progressive about GLBT rights are reluctant to stand up for them in public for fear of being identified too closely with the issue -- an apprehension that is likely only to mount if gay marriage touches off a national culture battle in coming months. Several companies that were more than willing to discuss their benefits and programs were unwilling to allow gay employees to pose for photographs that might wind up prominently displayed in the pages of BusinessWeek. Coors Brewing Co. (RKY), whose products were boycotted by the gay community in the 1970s for giving money to anti-gay groups, adopted its sexual nondiscrimination policy in 1978. Since 1988, it has offered financial support to gay community causes. But the Golden (Colo.) company would not allow Scott Coors, the gay vice-president and marketing director who is the son of Vice-Chairman William Coors, or any other spokespeople, to talk to BusinessWeek about its programs.
The people driving the gay rights revolution in Corporate America by and large are not working in the executive suite. They're ordinary employees like Daniel Kline. The United Parcel Service Inc. (UPS) supervisor last year applied for the company's Management Initiated Transfer, which allows employees to follow spouses to other cities and keep their jobs and seniority. An employee for more than two decades, Kline wanted to move with his longtime partner, who was reassigned by United Airlines Inc. (UALAQ) from San Francisco to Chicago. After receiving approval at district and regional levels to take an open position in Chicago, Kline was rejected at the corporate level.
UPS backed down this August after the couple enlisted Lambda Legal Defense & Education Fund, a gay advocacy organization, to sue on their behalf, contending the company violated California antidiscrimination laws. A spokesman says UPS' policy on so-called trailing partners now includes same-sex couples. "I'm not looking to change the world. I simply want to live with the person with whom I've shared the last 27 years," says Kline.
Not all companies need to be pushed. Consider the story of Melissa Feinmel, who was asking for far greater accommodation than Kline. After boarding American Airlines Inc. (AMR) planes for 10 years as pilot Mark Feinmel -- and participating in the sports talk and sexual innuendo that suffuse the macho, military-influenced cockpit culture -- she nevertheless decided to undergo a sex-change operation in 2000. Instead of opposing the move, American executives worked with Feinmel to clear the many federal regulatory hurdles that arose. For instance, the Federal Aviation Administration required Feinmel to undergo additional psychological and physical tests. The airline also had to figure out which bathroom to designate for her while she changed sexes. "There was a fear of losing my job, fear of losing my friends, fear of discrimination in the cockpit," says Feinmel. American "helped face all those issues." Now she happily flies 777s on transatlantic routes.
While the gay experience in Corporate America is far from monolithic, most gay managers interviewed by BusinessWeek say it has become easier in recent years to be themselves in the workplace. Displaying a picture of a same-sex lover on a desk or bringing a partner to a corporate gathering is no longer quite as intimidating as it used to be. Many now attend events such as the Out & Equal Workplace Summit, held this year in Minneapolis in October. "I used to keep my worklife and my private life separate, never talking about what I did on the weekend," says IBM Microelectronics (IBM) Vice-President Scottie Ginn. "Once you come out, you feel a much more whole person."
Broadly speaking, there is a generational divide among gay workers. Younger employees, typically those below 35, saw Roseanne Barr kiss another woman on TV and comedian Ellen DeGeneres declare publicly that she was a lesbian. They tend to come into the workplace as unashamedly gay and to demand equal rights more aggressively. Older workers, raised in times of greater stigma, tend to be quieter about their sexual identity to both co-workers and customers. Says James Law, a gay adviser at American Express Financial Advisors Inc. (AXP): "With my older clients, I'm less prone to bring it up. With my younger clients, it's a nonissue."
The Massachusetts Supreme Court's recent decision supporting gay marriage is certain to shake up employee-benefits practices, but it is still too early to predict how widespread the victory will be. In the court's 50-page ruling, the justices held that gay couples working in the private sector should be entitled to the same health insurance, life insurance, and bereavement benefits that straight married couples receive. The court gave the state legislature until May to pass a law giving gays marriage-like rights, which will affect companies with offices in the state.
But not all issues are covered by the ruling. Veterans benefits, citizenship rights, and traditional retirement plans regulated by federal law, such as 401(k) plans and Social Security, are unaffected. Under the federal Defense of Marriage Act of 1996, which defines marriage as a legal union "between one man and one woman," gays are legally barred from claiming the same federal benefits as straight couples.
Now the action on this issue is likely to shift to Congress and state legislatures. Some gay advocacy groups want to challenge the Defense of Marriage Act. Their conservative counterparts want to broaden it. California and Minnesota have recently passed laws requiring employers to treat benefits for same-sex couples effectively the same as for married couples. But many other state legislatures are opposed to such a move.
The controversy will surely make life more complicated for CEOs trying to navigate this contentious issue. While they may not want to alienate cultural conservatives, they will also be loath to drive away the gay community. After all, the GLBT universe in the U.S. includes some 15 million consumers. Many have high disposable incomes. Research from online company MarketResearch.com pegs GLBT buying power this year at $485 billion.
Of course, the path of gay rights in Corporate America is not a line angling boldly upward. When Exxon bought Mobil Oil in 1999, it rescinded the target company's policy of offering medical benefits to gay partners and disowned Mobil's written policy against discrimination based on sexual orientation (arguing that gay partners are not legal spouses and that gays are covered under its broader nondiscrimination policies). But despite such setbacks, far more companies are expanding gay rights than contracting them. There's no doubt that full legal equality for gays is many years away. But for the first time, it seems reasonable for gays in Corporate America to dream of a day when Gay 101 will no longer be necessary. By Cliff Edwards
With Jessi Hempel in New York