If Indiana's so-called "religious freedom" law goes down, you can thank Corporate America for killing it.
Big Business' outsized criticism of the state’s coyly named Religious Freedom Restoration Act has galvanized fierce opposition to the law.
Under pressure from businesses -- including the state’s largest employers -- as well as human rights groups and even other states, Republican Gov. Mike Pence said on Tuesday that he would seek to amend the law to ensure that businesses can't discriminate against anyone.
Pence vehemently denied accusations that the law would allow businesses to refuse service to gay customers, but said he would nevertheless support changes to the law in order to clear the air. Neither Pence nor GOP leaders in the legislature have detailed what the amendment will say.
That the business community was able to act so swiftly and decisively against the Indiana law is a sign of just how far Corporate America has evolved on gay rights -- from practicer of "Mad Men"-era exclusion, to protector of employee rights, to outspoken advocate. Improbably, the Fortune 500 somehow have turned into one of the country's most powerful social advocates for change.
“We’re probably at a tipping point,” said Irv Schenkler, a clinical professor of management communication at New York University’s Stern School of Business.
Things have certainly evolved since 2012, when no Fortune 500 companies opposed North Carolina’s proposed law banning same-sex marriage.
After Indiana’s law passed on Thursday, the response from the business community was swift, loud and decisive.
Salesforce.com CEO Marc Benioff was among the first to denounce the law on Friday. His cloud computing company followed up by halting company travel to the state, and put the kibosh on events planned there. Other tech companies followed, with some eventually pulling out of a conference in Indianapolis in May.
Today we are canceling all programs that require our customers/employees to travel to Indiana to face discrimination. http://t.co/SvTwyCHxvE
— Marc Benioff (@Benioff) March 26, 2015
On Sunday, Apple CEO Tim Cook published a piece in The Washington Post sharply criticizing the law. A spokesman from the Human Rights Campaign told The Huffington Post that Cook’s op-ed was “a clarion call” for the opposition movement.
After Arkansas passed its own religious freedom law on Tuesday, the backlash extended to that state. Walmart, which is headquartered there, has already come out against the law and is asking Gov. Asa Hutchinson (R) to veto it.
In a statement the company said the legislation "threatens to undermine the spirit of inclusion present throughout the state of Arkansas and does not reflect the values we proudly uphold."
The hits kept on coming. “The legislation in Indiana (and there are some bills being considered in other states) is not just pure idiocy from a business perspective, and it is that,” Marriott CEO Arne Sorenson told a group in New York, as he accepted an award from a gay rights group for his company’s work on equality. “The notion that you can tell businesses somehow that they are free to discriminate against people based on who they are is madness.”
By Tuesday, a long list of companies were on the record against Indiana’s law, including Nike, The Gap, Levi Strauss and PayPal. Big Pharma companies Eli Lilly and Co. and Roche Diagnostics are opposed, as is insurer Anthem. Angie’s List announced it would halt a planned expansion in the state.
Corporate America’s transformation on gay rights happened slowly, beginning in board rooms and trickling down to workers -- who now get better rights and protections from their employers than they do from their government. Eighty-nine percent of Fortune 500 companies have policies that specifically prohibit discrimination based on sexual orientation, according to a recent report from the Human Rights Campaign.
In contrast, there is no federal law prohibiting discrimination.
But it was the U.S. Supreme Court that truly forced companies out of the closet as gay rights supporters. A stunning 379 businesses, including many of the most respected companies in the U.S., signed onto an amicus brief at the court in support of gay marriage in a case to be argued next month that could make it legal nationwide.
In 2013, about 200 companies signed onto a brief urging that the high court overturn the portion of the Defense of Marriage Act that denies federal rights and benefits (like filing joint tax returns and inheriting money) to gay couples. It was overturned.
“Over the past couple of years, business support for LGBT equality has left the boardroom and entered the public square,” said the HRC spokesman.
Several factors drove the change. First, there’s the public’s increasing support of gay marriage, in particular the support of the coveted millennial generation.
In a Pew survey released Tuesday, 62 percent of Americans ages 18-29 said they’d oppose a law like Indiana’s that would allow, say, a wedding business like a photographer or a florist to decline services to a same-sex couple. For the general population, the percentage was 49 percent.
Companies also want to attract and recruit good people -- and that means having a diverse workforce. “Let's say you’re a tech company in the Bay Area or anywhere. It’s hard enough to find programmers,” says Susan McPherson, who runs a consulting company focused on corporate social responsibility in New York. “If you limit them to be only heterosexual, you lose out. As much as I would like to think it’s altruistic [to support gay rights]. It’s about good business.”
McPherson also notes that tech companies aren’t going to want to move to states where the rights of their workers aren’t protected. It’s hard to attract workers to hostile territory. LGBT shoppers also have extraordinary purchasing power, she said. “Are you really going to alienate them as your consumers?”
The HRC spokesman notes that increasing numbers of LGBTQ Americans are coming out of the closet -- including Apple CEO Tim Cook, the first Fortune 100 CEO to reveal he was gay. (That was another Cook move that galvanized corporate support around gay rights.)
But perhaps The New Yorker’s Andy Borowitz summed up the opposition to Indiana’s law best: “Indiana Governor Stunned By How Many People Seem to Have Gay Friends.”
-- Noah Michelson contributed reporting.
This story has been updated to reflect the fact that Walmart is now asking Gov. Asa Hutchison to veto Arkansas' religious freedom law, and to include Nike in the list of companies officially opposed to Indiana's law.
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