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LEGAL ISSUES

Why ENDA is Good For Your Business

Barring discrimination on the basis of sexual orientation or gender identity will boost your bottom line.

Last week the Senate passed the Employment Non-Discrimination Act (ENDA), which would create a federal law making it illegal to discriminate against LGBT employees based on sexual orientation or gender identity. 

The bill's fate in the house is uncertain, but conservative business critics have already jumped in to say the bill is unnecessary. Social changes, they say, are already eliminating discrimination, and seven out of ten small businesses already have equivalent protections in place. ENDA, they say, is yet another unnecessary regulation that will add to the cost of doing business by opening the door to lawsuits. 

Yet ENDA is deeply necessary, and needed. By granting LGBT people equal rights at work, and further encouraging diversity, ENDA would create a unified set of laws for businesses and their LGBT employees, as opposed to the patchwork that currently exists. By allowing employees to be open about their identities at work, companies will have a chance to intelligently interact and sell to the LGBT community, their friends and family. ENDA will help lead to stronger, more diverse workplaces, which is a good thing for businesses and helps them make money.

An ineffective patchwork of regulation

Currently, there is no federal law protecting people in the workplace on the basis of sexual identity or gender expression. Twenty-one states have added their own protections, and about 175 municipalities have as well. But in 29 states, it's still perfectly legal to fire LGBT employees based on their sexuality or gender expression.

About 75% of LGBT people say they have experienced discrimination at work, with an equivalent percentage saying they have been harassed at work, according to the Williams Institute, a gender identity law and public policy institute. Sixteen percent say they have lost a job due to their sexual orientation.

In the U.S., protections for employees have been an additive process over the last 50 years. The landmark 1964 Civil Rights Act included Title VII, which prevents discrimination based on gender, race, religion, and place of origin. Congress passed the Americans with Disabilities Act in 1990, preventing discrimination based on disability. Even ENDA has been introduced in every Congress for the past 20 years, albeit unsuccessfully. 

"The correct historical analogy for ENDA is to go back to the early 1960s before Congress passed Title VII of the Civil Rights Act," says Peter Romer-Friedman, a civil rights attorney and associate at Cohen Milstein, a law firm in Washington, says.

More lawsuits?

Business owners who fear that adding another protected class will open them up to new discrimination lawsuits are also misguided. There are only about 9 million GLBT people in the U.S., and not all of them work, according to M.V. Lee Badgett, an economist and distinguished scholar at the Williams Institute and director of the Center for Public Policy and Administration at the University of Massachusetts Amhers.

While the Congressional Budget Office estimates a five percent increase in the number of Equal Employment Opportunity Commission suits brought as a result of enacting ENDA, Badgett's own research based on the 21 states that have passed nondiscrimination laws suggests the increase is likely to be closer to 3 percent. Simply, says Badgett: "There won't be a flood of law suits."

The weakness of corporate policies

As attitudes have evolved, GLBT people have moved from being a fringe class of citizens widely considered to have a mental illness to a class whose rights are now being recognized by mainstream society.

Critics of ENDA say that most Fortune 500 businesses already offer protection against discrimination based on sexual identity and gender expression. That's true: 88% of the top Fortune 500 companies offer protections based on sexual orientation, and 57% offer protections for gender expression, according to the Williams Institute. That's also not the same as legal protection. "If you don’t have the ability to enforce the rights under law, the right is not worth much," Romer-Friedman says.

One need look no further than ExxonMobil to understand how capricious rights granted by corporations can be. Both Exxon and Mobil were Fortune 500 companies when the former acquired the latter in 1999. While Mobil offered protections based on sexual orientation, and equivalent benefits for GLB employees in relationships as their straight counterparts, Exxon did not. Soon after the deal closed, Exxon eliminated protections based on sexual orientation, and it eliminated benefits for same-sex couples. 

While the changes sparked a huge amount of protest, ExxonMobil only revisited its policy in 2013, in response to the Supreme Court's June ruling overturning the Defense of Marriage Act and Proposition 8, which opened the door to federal recognition of same-sex marriage.

Rejecting good employees

Meanwhile, private companies may know discrimination is bad for businesses and out of step with the times, but they still do it anyway. That's detrimental to their own productivity, because they're eliminating good employees. 

Just ask Lisa Howe, executive director of the Nashville GLBT chamber of commerce, a group with about 200 member businesses.

Howe was a popular soccer coach at Belmont University, a private Baptist school in Nashville, Tennessee, for six years. A lesbian, she became fed up with hiding her identity at work. So in November 2010, she informed her team that she was a lesbian, and that she and her partner were expecting a child in the coming months. A month later, the university terminated her job.

Neither officials at Belmont nor Howe will talk publically about the specifics of what happened at the school due to an agreement, but the incident garnered national attention and resulted in Nashville passing a nondiscrimination ordinance for sexual minorities.

Howe, who says she has always worked in Southern states that do not protect sexual minorities, says not being able to talk openly about herself at work led to a sense of alienation and intimidation that affected her productivity.

"I fell into a relationship and started a family, and in a working situation where you can't be yourself or bring your full self to work, and where you are fearful or nervous about it, it becomes exhausting," Howe says. "This is not an over-regulation. You have a class of citizens who don’t have the same access to the same kind of workplace that other taxpaying Americans have."

 

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Last updated: Nov 12, 2013

JEREMY QUITTNER | Staff Writer | Staff Writer, Inc. and Inc.com

Jeremy Quittner is a staff writer for Inc. magazine and Inc.com. He previously covered technology for American Banker and entrepreneurship for BusinessWeek.




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