Wal-mart: An unlikely voice for gay rights

Retail giant Wal-Mart played a major part in the fight for equality when its CEO spoke out against a bill that would let businesses discriminate on religious beliefs, writes Nathan Layne in Chicago    

The chief executive of Wal-Mart Stores has emerged as an unlikely voice for gay rights after the Arkansas governor heeded his call to reject a much-criticised bill.

However, the decision by Doug McMillon to speak out against the ‘religious freedom’ bill reflects more than a decade of evolving policy by the retailer on the issue of gay and lesbian rights, and follows a pattern of taking stands on social issues when it makes business sense to do so.

“Every day, in our stores, we see firsthand the benefits diversity and inclusion have on our associates, customers and communities we serve,” McMillon said, asking for a veto of the bill. That was seen as a major factor behind Governor Asa Hutchinson’s decision to ask lawmakers in Wal-Mart’s home state for revisions.

Wal-Mart’s action comes against the backdrop of other major companies taking stands on developing political and social issues, with mixed results.

General Electric CEO Jeff Immelt joined a growing chorus of executives expressing concerns about a similar bill seen as possibly discriminatory against gay people in Indiana.

Starbucks cancelled a programme in which baristas were invited to engage customers on conversations about race, making it a cautionary tale for companies looking to wade into potentially controversial issues.

Wal-Mart has been careful in how it tackles issues in the public domain and retains a reputation for conservatism that traces to its origins in a small Arkansas town.

For years, it has resisted calls by labour groups to pay a “living wage” and its move in February to increase pay to at least $9 an hour was viewed by many analysts as driven by competition for workers in a tight labour market as much as social concerns. Advocates of the living wage want $15 per hour.

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One former Wal-Mart executive, who now consults for the company, saw parallels between McMillon’s show of support for LGBT rights and a push on sustainability a decade ago under then-chief executive Lee Scott.

Scott told people to find ways to use less energy and cut waste but wanted new initiatives to be profitable, the former executive said. Ultimately, the stand on LGBT rights is about protecting the business, said the former executive, who declined to be quoted because of his continuing ties to Wal-Mart.

“It was the smart business thing to do,” the consultant said, adding that McMillon’s stance should help avoid the business boycotts now threatening Indiana. “But it was also the right thing to do for the associates culturally.”

Standing by while its home state was labelled anti-gay could have hindered Wal-Mart’s ability to recruit executives, as well as hurt its image generally, said Deena Fidas, a director at the Human Rights Campaign, which rates companies on their policies toward lesbian, gay, bisexual, and transgender workers.

“It comes down to the issue of economics here,” said Fidas. “No one wants the stain of discrimination on their headquarters state.

“In many ways, their story is one of leading in some cases and, in other cases, following industry peers and the trends of the Fortune 500 broadly.”

Wal-Mart made its first big step on LGBT policy in 2003 when it added sexual orientation to its equal employment policy. An internal support group, Walmart PRIDE (Promoting Respect, Inclusion, Diversity & Equity) was formed the following year.

However, a few years later it pulled its support for the National Gay and Lesbian Chamber of Commerce after conservative groups threatened to boycott its stores, drawing criticism from LGBT groups and illustrating tension over the issue within the company.

Wal-Mart’s shift in stance in many ways reflects changing attitudes in the US overall. A majority of Americans has supported same-sex marriage for several years, although a substantial minority still opposes it, according to Gallup polls.

While some shoppers have taken to social media to criticise Wal-Mart’s stance on the Arkansas bill, many have voiced support and there has been no sign of protest or any other impact on Wal-Mart stores.

In 2011, Wal-Mart added gender identity to its nondiscrimination policy and in 2013 announced it would extend benefits to same-sex partners. On the back of those moves, the retailer scored 90 out of 100 in the HRC’s latest Corporate Equality Index.

“Wal-Mart has had a vision of where they want to take their LGBT policies over the last decade before we even got in the picture,” said Jordan Garcia of the Northwest Arkansas Center for Equality, which was founded on a grant from Wal-Mart in 2006. “It was just a matter of when was the right time and the right leadership in place.”

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Protecting religious freedom

Arkansas and Indiana leaders agreed to modify new state laws that were billed as protecting religious freedom but drew criticism from across the country as opening the door to anti-gay discrimination.

The Republican governors of both states signed off on changes approved by the legislatures aimed at clarifying the intent behind the legislation. To a large extent, the measures were modelled after a federal law enacted in 1993 with broad bipartisan support. But critics say they were designed with a different motive — to shield businesses and individuals who do not want to serve gay and lesbian people, such as florists or caterers who might be hired for a same-sex wedding.

Here is some of the background about these laws:

Q: What was the purpose of the 1993 federal law?

A: The federal Religious Freedom Restoration Act arose from a case related to the use of peyote in a Native American ritual. It has since been used by other individuals who claimed the government was infringing on their religious rights, such as a Sikh woman who was fired by the IRS for wearing a 3-inch ceremonial dagger to work. In 1997, the US Supreme Court ruled the federal law did not apply to the states, so states began enacting their own laws. They are now on the books in 21 states.

Q: What’s changed in recent years?

A: In the past two years, numerous judges have struck down state bans on same-sex marriage, which is now legal in 37 states. The US Supreme Court will hear arguments on April 28 in a case over the constitutionality of such bans that could legalise gay marriage nationwide. The push for religious freedom laws has been spurred by those developments and by the Supreme Court’s ruling last year that Hobby Lobby and certain other private businesses with religious objections could opt out of providing the free contraceptive coverage required by the Affordable Care Act. In another key case, the New Mexico Supreme Court ruled in 2013 that a photography studio violated the state’s Human Rights Act by refusing to photograph a lesbian couple’s commitment ceremony. The court rejected the studio’s effort to invoke the state’s religious freedom act, holding that the law applied only to lawsuits against a government agency, not to disputes between private parties. Partly in response to that case, conservative lawmakers in several states proposed religious-protection legislation aimed at shielding people from private discrimination lawsuits if they felt that doing business with same-sex couples violated their religious beliefs.

Q: What do the new state laws say?

A: The Indiana and Arkansas measures do not specifically mention gays and lesbians, though they had strong backing from lawmakers and conservative activists who have opposed same-sex marriage and were unhappy with its spread. The measures say that state laws and regulations cannot infringe on a person’s religious practice unless the government can show that it has a compelling interest in doing so.

Q: How did Indiana and Arkansas revise their laws?

A: In response to widespread criticism, Indiana lawmakers passed an amendment prohibiting service providers from using the law as a legal defence for refusing to provide goods, services, facilities or accommodations. It also bars discrimination based on race, colour, religion, ancestry, age, national origin, disability, sex, sexual orientation, gender identity or US military service. The law would still offer protections to churches or other nonprofit religious organisations. The conservative Family Research Council, a strong supporter of the original measure, denounced the proposed changes, saying they would “gut religious freedom in Indiana.”. The revised Arkansas measure only addresses actions by the government, not by businesses or individuals; supporters said that would prevent businesses from using it to deny services to individuals. Opponents contended the measure still needs explicit anti-discrimination language similar to Indiana’s proposal.

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