By JAMES B. STEWART
“For millions of gay and lesbian employees, much has changed since 1999, when no states recognized gay marriage, “Don’t Ask, Don’t Tell” effectively barred people who were openly gay from serving in the military, Matthew Shepard’s murderer was convicted — and Exxon Mobil shareholders were first asked to protect gay and lesbian employees from discrimination.
One thing hasn’t: Exxon Mobil’s implacable opposition to adding sexual orientation to its official equal employment opportunity statement.
The issue will be on the agenda at Exxon Mobil’s annual shareholder meeting next week for the 14th consecutive year. Last year the company went so far as to ask the Securities and Exchange Commission for a ruling that it needn’t keep including the proposal on its ballot, but was rejected.
The proposal, backed this year, as it has been since 2010, by New York State Comptroller Thomas P. DiNapoli on behalf of the New York State Employees Retirement System, has never gained majority support. That’s not unusual for so-called social, political and environmental shareholder initiatives, since most institutional money managers usually decline as a matter of policy to vote against management recommendations on such issues. Still, the measure has gained as much as 38 percent of the vote, considered resounding support by the feeble standards of shareholder democracy.
That hasn’t fazed Exxon Mobil. On the contrary, as social attitudes and other corporations’ policies on the subject of gay rights have changed drastically, Exxon Mobil has moved steadily further from the mainstream, even within the energy sector. According to the Human Rights Campaign, 88 percent of Fortune 500 companies have adopted written nondiscrimination policies prohibiting harassment and discrimination on the basis of sexual orientation, as have all the major integrated oil companies that compete with Exxon Mobil.
Twenty-one states, the District of Columbia and more than 160 cities and counties have laws prohibiting employment discrimination based on sexual orientation. But Exxon Mobil maintains it isn’t bound by these because of the federal Defense of Marriage Act, which pre-empts state law. A constitutional challenge to DOMA is awaiting decision by the Supreme Court, and two federal appeals courts have ruled DOMA unconstitutional.
“Exxon Mobil is an outlier among Fortune 500 companies on this issue,” Mr. DiNapoli said when I asked him about the issue this week. He said it was not only a social or civil rights issue. “The company runs the risk of restricting its ability to attract and maintain top talent. Exxon Mobil is sending a message that applicants and employees can be discriminated against on the basis of non-job related criteria. It just doesn’t make sense from a bottom-line standpoint.”
In countries where it’s mandated by law, Exxon Mobil does have policies barring discrimination against gay and lesbian employees — and extends spousal benefits to same-sex married couples. But the company has gone to unusual lengths to avoid doing so in the United States. Mobil Oil had polices protecting gay and lesbian employees from discrimination and extended benefits to same-sex couples. But Exxon rescinded them when it acquired Mobil in 1999. It eliminated the same protections and benefits when it acquired XTO Energy in 2009.
A former Exxon Mobil employee told me that he was involved with the company’s effort to transfer a highly valued executive from Belgium, where the executive lived with his husband, to Texas. He said the executive told the company, “I’m not coming alone,” and asked for the same medical benefits and recognition for his spouse that he received in Belgium. The company refused.
An Exxon Mobil spokesman said he couldn’t comment on a specific case, but noted that the United States immigration service doesn’t grant visas to same-sex spouses since those marriages aren’t recognized under federal law. He confirmed that it was company policy to provide such benefits only in countries where they are mandated by law, and not in the United States. According to Mr. DiNapoli, Exxon Mobil told him that the company refused to recognize the validity of same-sex marriages in New York or any other state where they are now legal. “Exxon Mobil must recognize that its stance against equal rights will hurt the company and its investors,” Mr. DiNapoli said.
It seems to be hurting the company with gay and lesbian customers and employees. Last June, Cece Cox, chief executive of Resource Center Dallas, and a group that included representatives from several Fortune 500 companies, met with Exxon Mobil’s relatively new head of human resources, Malcolm Farrant. “He flat-out asked us, ‘What’s your opinion of Exxon Mobil?’ ” Ms. Cox said. “Every single person said the equivalent of, ‘I’d walk 20 miles in a blizzard to find another gas station if I’d run out of gas. We’d never spend a dime at Exxon Mobil.’ ” It may also hurt the company’s recruiting efforts, especially among young engineering graduates who support same-sex marriage.
Exxon Mobil ranks last in the Human Rights Campaign Corporate Equality index of the Fortune 1000 corporations, with a score of negative 25 out of a possible 100. The company received the first and thus far only negative score for “engaging in activities that undermine L.G.B.T. equality,” an H.R.C. spokesman said. “Exxon Mobil is in a class by itself, and I don’t mean that in a positive sense,” said Deena Fidas, H.R.C.’s deputy director for the workplace project.
When I asked the Exxon Mobil spokesman, Alan T. Jeffers, for the company’s rationale, he referred me to its proxy statement, which states that “the board believes the proposal is unnecessary” because Exxon Mobil already “prohibits all forms of discrimination” and specifically mentions sexual orientation in a statement on its Web site and in its training programming for new employees.
That position irks gay rights advocates. “They have a bevy of attorneys who understand the difference between a legally binding equal employment opportunity statement and some reference on their Web site,” Ms. Cox said.
It seems ironic, then, that employees and former employees I spoke to praised the company for its tolerant work environment. “As an employee there every day, I never experienced anything close to discrimination based on sexual orientation or anything else, for that matter. And I never heard anything from anyone else. The only complaints I heard were about medical benefits,” said Tom Allen, who recently retired after 10 years with the company. Exxon Mobil has a gay employees organization, and a few members attended the “Out and Equal” workplace meeting when it held its annual convention in Dallas two years ago.
Mr. Allen was working at Mobil at the time of the merger with Exxon, and was involved in persuading Mobil’s former chairman, Lucio Noto, to ban discrimination based on sexual orientation and to extend domestic partner benefits to same-sex couples. “We met with him, and explained the advantages straight people had, and he turned to me and said, ‘You’ve got to help me out here. What do you mean by straight people?’ But he understood the issue. Exxon just doesn’t seem to get it. They were very proud of their record on apartheid but they just don’t seem to see the common thread.”
Mr. Allen added, “Inside the company we anxiously watched that shareholder vote year after year. We kept hoping to see it turn to a yes vote, and we felt it was trending in the right direction. We never understood the company’s position. All their major competitors have taken this step. That’s what I don’t get. They are so driven by what happens at the competition, and wanting to stay competitive, except for this. It’s got to be somebody somewhere is blocking it. I can’t imagine who that is.”
For years, some people assumed it was Lee Raymond, Exxon’s blunt former chairman and chief executive best known for his vocal skepticism about global warming, who was also dismissive of the sexual orientation issue at shareholder meetings. But he retired at the end of 2005, replaced by a more genial Texan, Rex W. Tillerson.
Mr. Tillerson, a former Eagle Scout, was national president of the Boy Scouts of America from 2010 to 2011, while the Boy Scouts maintained its ban on gay scouts and scout leaders. He is a member of the Boy Scouts’ national executive board, which voted this week to lift the ban on gay scouts (but not gay scout leaders). Eight years into his tenure as Exxon Mobil’s chief executive, the company’s position hasn’t budged. No one doubts that if Mr. Tillerson threw his support behind the issue, the company’s policy would change.
Mr. Jeffers said Mr. Tillerson had no comment. He added that the company’s position on the issue was a board decision, and that board deliberations were confidential.
This week, Freedom to Work, a gay advocacy group, filed suit against Exxon Mobil in Illinois, claiming discrimination based on sexual orientation. The group sent the company two fictitious résumés for a job opening in Patoka, Ill. One résumé had stronger qualifications, but identified the applicant as gay. Exxon Mobil responded to the lesser-qualified applicant’s résumé and made several follow-up phone calls. The résumé from the gay applicant received no reply.
Tico Almeida, a Yale Law School graduate and president of Freedom to Work, told me this week he was inspired by similar lawsuits that were part of the civil rights movement. “Exxon Mobil says it doesn’t discriminate. If so, all they have to do is adopt the same nondiscrimination policy that other companies have and we’ll settle the case,’ Mr. Almeida said. “I hope they don’t decide to waste shareholder money by fighting it.”
But no one is holding out much hope, either for the lawsuit or the coming shareholder vote. “I don’t think they’ll ever back down,” Mr. Allen said. “Not until they’re forced to. I think it’s just a cultural thing.””