LEGAL ISSUES

Why ENDA Is a Bad Idea

A law to make employer discrimination against LGBT workers is unnecessary and would be burdensome on small companies.
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The Senate recently passed the Employment Non-Discrimination Act, better known as ENDA, and sent it on to the House of Representatives. This bill prohibits discrimination by employers on the basis of sexual orientation or gender identity. Whether or not the bill will even come to a vote in the House is up in the air. If it does pass it will put yet another burden on businesses.

You can argue that burdens are okay, as long as they creating a greater good in stopping discrimination against people based on their sexual orientation. There are many, many stories of people being fired or treated poorly because managers or coworkers found out that they were gay (or merely thought that they were gay). So, it makes sense to prohibit such discrimination in the workplace, right?

ENDA would create a so-called "protected class." Like it or not, that changes the way people look at members of the class. Some people--even decent people--see potential lawsuits.

And it's pretty darn easy not to hire someone: Unemployment is high and you can almost always make a perfectly legal case for why you chose someone else for the job. But if you do hire someone in a protected class, and then you need to fire or discipline or fire them, they can cry discrimination. Suddenly you are spending time, money and other resources to fight that charge, regardless of the legitimacy of the claim.

Since it's easy not to hire, but potentially dangerous to fire or discipline, ENDA may make businesses less likely to hire people based on sexual orientation. Some people argue that the Americans With Disabilities Act did just that--it encouraged people not to hire rather than risk lawsuits.

You can expect to spend between $50,000 and $250,000 just on legal bills fighting an employment lawsuit, not including an eventual payout if you lose. That's just to fight.

Proponents of the law claim that ENDA really isn't a threat to businesses because, in states that already have legal prohibitions against discrimination based on sexual orientation, few lawsuits have been filed. Rather than show that this law won't be burdensome, it shows that the law is not necessary.

You don't need to implement a law to get people to do what they are already doing. The Williams Institute reports that

Overall, we find that almost all of top 50 Fortune 500 companies and the top 50 federal government contractors (92%) state that, in general, diversity policies and generous benefit packages are good for their business.  In addition, the majority (53%) have specifically linked policies prohibiting sexual orientation and gender identity discrimination, and extending domestic partner benefits to their employees, to improving their bottom line.

Small businesses are not far behind. American Progress reports that 7 out of 10 small businesses already have policies prohibiting discrimination on the basis of sexual orientation. Why implement a new law, with added costs to taxpayers (the CBO estimates $47 million) and business owners alike, when most people already are acting in their own best interest by hiring, firing, and disciplining based on performance, not sexual orientation?

Businesses have seen that hiring people of all sexual orientations is good for business. They don't need government standing over their shoulders and second guessing decisions.

Apple made headlines the other day for advocating for passage of ENDA. But keep something in mind. What's the goal of Apple? To make money, of course. How does ENDA help them make money? By putting burdens on their smaller competitors. Apple already has a labor and employment law department. They already have lawyers on board. So compliance with this type of law is extremely easy for a big company. It is not extremely easy on the start-up that has 25 employees and has stretched its legal budget to the limit already.

There are lots of bad managers out there. A good portion of my job involves advising people on how to deal with their poor managers (and advising managers how to deal with their poor employees).  Punishing an employee for anything other than poor performance is ridiculous, yet it happens every day. You cannot legislate out bad management. You cannot wave a magic wand and make every business fair. Sometimes people are going to be treated poorly. That is unfair. But you cannot legislate that away. You can only increase the costs for compliance on business. And that doesn't help anybody, regardless of sexual orientation.

Last updated: Nov 7, 2013

SUZANNE LUCAS | Columnist

Suzanne Lucas spent 10 years in corporate human resources, where she hired, fired, managed the numbers, and double-checked with the lawyers.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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