Trucker J.B. Hunt Bucks Investor Call for LGBT Protectionsby
Activists say company leaves workers `at mercy' of local laws
Companies with gay-friendly policies outperform, study says
Activist investors are pressing J.B. Hunt Transport Services Inc., which has 15,000 drivers, to explicitly protect gay and transgender workers from discrimination in its employment policies, arguing that the Arkansas trucker is among just a few large companies not to do so.
J.B. Hunt has said that the proposal is “unnecessary” and recommends shareholders vote against it at its annual meeting on April 21 in Lowell, Arkansas. “The Company has not received indications from its employees that discrimination on the basis of sexual orientation, gender identity or gender expression is practiced within the Company,” according to its proxy materials. A J.B. Hunt spokesman declined to comment.
As many U.S. employers voice support for gay rights -- even threatening to pull business from states with restrictive new laws -- some haven’t adopted specific language related to sexual orientation or gender identity. This year, five similar investor measures have been withdrawn after companies voluntarily adopted protective language, according to ISS Voting Analytics. The J.B. Hunt proposal is the only one now on a U.S. proxy ballot, said ISS, which recommends that investors vote in favor.
“The trucking business requires employees to travel all over the country, and without a company-wide policy, the employees are at the mercy of the patchwork of state and local policies,” said Brianna Murphy, head of shareholder advocacy at Boston-based Trillium Asset Management LLC, the investor that put forward the proposal.
Trillium, which has more than $2 billion under management, owns more than 172,000 shares of J.B. Hunt, she said.
Only 22 states have laws that protect workers from discrimination based on their sexual orientation. Shareholder proposals that add protections have been popular in the past five years, said Edward Kamonjah, head of U.S. strategic research analysis and studies at ISS. “LGBT friendly employment practices have traction with both issuers and investors,” he said.
While the company hasn’t added specific language for the gay and transgender community, its written policy does say J.B. Hunt “is firmly committed to operating its business in full compliance with applicable employment laws and providing each of our employees with a workplace free from unlawful discrimination or harassment of any kind.”
According to the Human Rights Campaign, a gay activist group, some 93 percent
of the companies in the Fortune 500 had adopted language explicitly protecting
workers from discrimination based on sexual orientation and 75 percent on the
basis of gender identity.
"There are strong reasons to be a leader from a business point of view," said Beck Bailey, HRC’s deputy director of employee engagement. "Companies that are ahead of the curve find it’s good for talent acquisition, retention and employee engagement."
Those companies may also find benefits for their bottom line, according to research released last week by Credit Suisse. The study found that a group of 270 companies that supported LGBT employees outperformed the MSCI ACWI index of global companies by 3 percent annually over the past six years.
“Our hypothesis continues to be that diversity brings financial benefits to organizations and investors,” the Credit Suisse report said. “We can only draw associations, not causality.”
"Do better companies have better LGBT policies?,” the report asked, "or do LGBT employees make companies better? Probably both."
A company that resists the trend toward pro-LGBT language, such as J.B. Hunt, "is a true outlier," Bailey said, adding that other Arkansas-based companies, including Wal-Mart Stores Inc. and Tyson Foods Inc., provide those protections.
Many employees and managers "rely upon information provided by the employer to know their rights or understand what constitutes acceptable behavior," said Sarah Warbelow, legal director of HRC.