Sexual Orientation Discrimination in the Workplace
Introduction
One of the most controversial issues in the workplace today deals with sexual orientation
discrimination of employees. The ethics of this issue are constantly being debated and voted on in
businesses and corporations in the United States and because of this, the concern of sexual orientation
discrimination has now earned a written nondiscrimination policy in over eighty-four percent of Fortune
500 companies and over ninety-three percent of Fortune 100 companies (Action Report). These clauses
have been established based on the fact that over forty-four percent of LGBT have experienced firsthand
discrimination based on their sexual identity in the workplace (Action Report). In another study, when 35
studies were taken out, the reviewers established that sixteen to sixty-eight percent of the LGBT
respondents surveyed reported to experiencing some form of discrimination in the workplace. Since these
evaluations were made available to the public, fifteen addition reviews have been performed to describe
almost the exact findings (Action Report).
This dilemma is one that cannot go unheard in the workplace and many managers and boards of
directors are forced to face this problem in their companies. These companies are responsible for the
harassment and discrimination that take place in their firms and in the past, lawsuits and legal pursuits
have been brought about in dealing with these issues (Despuez). With the increasing frequency of this
dilemma, heads of companies and even policymakers at the federal, state, and local level are closely
monitoring the employment discrimination and considering laws that would ban the various instances of
employment discrimination on the basis of sexual orientation and gender identity. This is a vital step in
the direction of bettering the workforce and making sure all employment opportunities are equal.
The diversity initiatives taken by businesses are important because they show all employees how
to act and react to situations and working with their fellow employees. Training for employees is vital to
their success and in the situation of working with other LGBT individuals, extensive training can be
significant for success (Despuez). Since it is expected that all employees be accountable for their own
decisions and behavior, it is hopeful that employees will take it upon themselves to make the right
decisions and work well with their associates. Businesses and government officials do not expect changes
in the viewpoints of their employees but do expect the employees to be tolerant in their thinking and open
to working with all individuals no matter their sexual orientation.
Section 1
The two businesses that we researched and found to have confronted this issue in their past were
Exxon Mobil and Wells Fargo. Each of these companies has a different approach to the concern of
whether or not there should be a clause about sexual orientation discrimination in the workplace. After
studying these two companies and their current states, we understand how they each formed the clause
that currently explains their standards. The first of these two corporations, Exxon Mobil, is now the
world’s largest international gas and oil company (ExxonMobil). They are at the top of their industry in
global connections with oil and gas resources and have worked hard for their fourth ranking on The
Forbes Global 2000, which is a ranking of the most powerful companies in the world (Forbes).
The headquarters for Exxon Mobil is currently located at 5959 Las Colinas Boulevard in
Irving, Texas. Exxon Mobil’s products include oil and gas. They sell petroleum at the various gas stations
owned across the United States (ExxonMobil). They are an industry leader because they own facilities in
almost all of the countries in the world and they attain their gas and oil from six continents. Their annual
revenue for the year 2010 was $301,500 billion, according to their financial statement. This number
continues to rise year after year as they grow and become a more powerful company.
Exxon Mobil merged in 1999 and since this point in the acquisition of their companies, they have
continuously voted against putting an antidiscrimination clause on the basis of sexual orientation into
their code of conduct. When questioned on their reasoning for this, they relate it to the fact that it is not a
federal law. They strongly prohibit the act of sexual orientation discrimination but may never add a clause
about this in their code of business conduct (Standards of Business Conduct). Exxon Mobil’s Standards of
Business Conduct directly states the following: “It is the policy of Exxon Mobil Corporation to prohibit
any form of harassment in any company workplace. The policy prohibits unlawful harassment based on
race, color, sex, religion, national origin, citizenship status, age, physical or mental disability, veteran or
other protected status, as well as any other form of harassment, even if the harassing conduct is
lawful.(Standards of Business Conduct)”
The other company that we researched, Wells Fargo, differs greatly from Exxon Mobil. Wells
Fargo & Company is a business that offers financial services and other operations to businesses and
individuals around the world. They were founded on March 18th, 1852 in New York City and then
opened their doors to customers on July 13th, 1852. Wells Fargo is one of the largest banks in the world
due to their recent merge with Wachovia and is now qualified as one of the “Big Four Banks” along with
Citigroup, Bank of America, and JP Morgan Chase (Wells Fargo). In May of 1995, Wells Fargo was the
first bank to offer online banking to their customers starting a convenient trend for other bank to soon
catch on to and duplicate. Since 1852, Wells Fargo has grown to now having over 6,300 banking
locations in 39 different states (Wells Fargo).
Wells Fargo & Company’s corporate headquarters in located at 301 South College Street on the
19th Floor in Charlotte, NC. Although Wells Fargo is more of a service-based company, they offer
numerous products and services to their customers including, treasury management, real estate, insurance,
investing, and financing. The wide varieties of services that they offer are much of the reason why they
are such a successful, growing company. In 2010 alone, their annual revenue reached $85.210 billion.
Other than its various locations in the United States, Wells Fargo also has main offices in India, Hong
Kong, and London (Wells Fargo).
Taking the spot of twenty-seventh on The Forbes Global 2000 Companies list, Wells Fargo has
always been a top company who is open to employees of all races, genders, religions, ages, and even
sexual orientations (Forbes). Their employee handbook specifies on what prohibited harassment is and all
the ways it can be performed beyond the legal level. Their employee handbook directly states, “We
recruit, hire, and promote team members based on their individual ability and experience, in accordance
with Equal Employment Opportunity and Affirmative Action laws and regulations. Wells Fargo’s policy
is that we do not discriminate on the basis of race, color, gender, national origin, religion, age, sexual
orientation, gender identity, genetic information, physical or mental disability, pregnancy, marital status,
veteran status, or any other status protected by federal, state, or local law. (Wells Fargo)” They include all
of the qualifications that Exxon Mobil does while including “sexual orientation” in their employee
handbook.
Section 2
Exxon-Mobil is one of two fortune 500 companies, and ranked among the top ten, that does not
include an explicit sexual-orientation policy in their code of ethics or employee handbook (Dale, 2011, p.
488). However, this does not mean that they do not address the issue at all. Exxon has made efforts to
rationalize their refusal to add in a specific sexual orientation discrimination clause through a proxy
statement that insists the company “has zero-tolerance discrimination and harassment policies.” These
policies include all employees and are strictly enforced. It also states that sexual-orientation
discrimination is included in this broad discrimination “definition” (Gunther, 2006, p. 2). Their code of
ethics addresses discrimination in two sections, which in comparison to other corporations, is fairly
extensive. An excerpt from the code of ethics that deals with the managers involvement in protecting a
discrimination-free work environment states: “Managers and supervisors are responsible for
implementing and administering this policy, for maintaining a work environment free from unlawful
discrimination, and for promptly identifying and resolving any problem area regarding equal employment
opportunity” (Exxon-Mobil, 2006, p. 18). In the case of Exxon-Mobil, it is the responsibility of managers
to enforce and deal with the issues of any discrimination.
When it comes to the sexual-orientation discrimination dilemma, managers must handle the
situation thoroughly to the standards of Exxon-Mobil. If any sexual-orientation discrimination or
harassment occurs they are required to confront the issue with both parties and resolve the issue within
their discretion (Exxon-Mobil, 2006, p. 18). As detailed as Exxon-Mobil’s code of ethics is, it is hard to
distinguish what sort of policy there is about those who obstruct their anti-discrimination work
environment. Although they have stated that they do have a “zero-tolerance policy” for discrimination
and harassment, it is not explicitly stated in their code of ethics. It can be presumed then, that there is
some room for managers to decide what the appropriate course of action will be for each certain situation
(Gunther, 20106, p. 2). If faced with a sexual-orientation discrimination situation, managers are required
to address and resolve the issue, but the way in which they resolve it can have different outcomes
depending on their take on the situation.
The ethical principles that encompass Exxon-Mobil’s stance on resolving the issue of sexual
orientation discrimination have two opposing ideals. On one hand, they do resolve the issue as if it were
any other sort of discrimination violation; however, they do not address sexual-orientation discrimination
to be its own entity as they do race, gender, and disability discrimination (Exxon-Mobil, 2006, p. 18).
Exxon-Mobil has structure and policies about discrimination as a whole that obey rules set forth by
government, which is embodied in the governmental requirements principle (Hosmer, 1995, p. 396).
Discrimination in the workplace is a violation of governmental law, which Exxon-Mobil make very clear
they follow. Because of this, managers and victims of a sexual-orientation discrimination dilemma know
they are protected and must obey this right (Exxon-Mobil, 2006, p. 18). Exxon-Mobil also establishes a
utilitarian benefits principle, as sexual orientation and gender identity employees are not explicitly
protected in the company’s code of conduct (Homer, 1995, p. 396). In the melting pot of employees who
work for Exxon-Mobil, minorities that pertain to race, gender, disability, etc are all mentioned in the code
of conduct. The only minority missing is the gay, lesbian, bisexual, and transgender (GLBT) community
(Exxon-Mobil, 2006, p. 18). Exxon-Mobil the potential backlash they would receive due to the
controversial nature of sexual orientation would harm the company if they explicitly included the GLBT
community in their code of ethics (Gunther, 2011, p. 1). It can be deduced that Exxon-Mobil feels that the
absence of specific written protection of GLBT workers overall benefits the company and the rest of the
employees that work there. This absence harms the GLBT community, and in this case they are the sole
minority. The combination of these two ideals make it very confusing what sort of stance Exxon-Mobil
has towards the protection of GLBT workers.
Wells Fargo has a very different take on the responsibility of protecting their GLBT employees within
their organization. Wells Fargo, though not as big as Exxon-Mobil, is a fortune 500 company who
believes the rights and protection of their GLBT workers is very important (HRC, 2010, p. 1). Wells
Fargo’s employee handbook explains in great detail their position on the issue of sexual-orientation
discrimination and gender identity. In an excerpt from their handbook they specifically state, “We recruit,
hire, and promote team members based on their individual ability and experience. We do not
discriminate on the basis of… sexual orientation, gender identity…” (Wells Fargo, 2011, p. 9) WellsFargo also explains that they are in no way tolerant of harassment towards the GLBT community and
even include examples of harassment. These examples are forms of harassment that extend beyond the
legal level and are in no way condoned in their work environment. (Wells Fargo, 2011, p. 22) Because
Wells Fargo is very sensitive to the GLBT community, managers have great responsibility in making sure
the workplace is a safe place for these people. Tolerance of the GLBT community is a strong part of
Wells Fargo’s ethos, so in order to make sure this resonates to workers managers must educate and
enforce theses ideals. If a situation should occur where tolerance to the GLBT workers is violated,
managers must mediate the conflicting parties and decide what sort of consequences should be given
(Wells Fargo, 2011, p. 23). The thorough and stern nature of the handbook regarding the rights of Wells
Fargo’s GLBT employees provides a sense of protection and support from the company and its upper
management.
Wells Fargo’s stance on anti-sexual orientation discrimination is supported by many ethical principles
that foster a safe working environment. The kind and supportive nature of that Wells Fargo demonstrates
to their GLBT employees embodies the religious injunctions principle (Hosmer, 1995, p. 396). Their
organization is very compassionate about making a tolerant work environment, which strengthens the
company’s sense of community. This is only possible if management is there to enforce these policies and
to make sure that everyone has some sort of education on these ideals (Hosmer, 1995, p. 396). In addition
to the religious injunctions principle, Wells Fargo also has a strong value in the individual rights principle
embedded in their ethical ethos (Hosmer, 1995, p. 397). Managers are required to ensure that their GLBT
employees are protected and that their there are no “actions that abridge the agreed-upon rights of others”
(Hosmer, 1995, p. 397) Wells Fargo is very clear on their strong sense of responsibility when it comes to
the protection and support of their GLBT workers, and managers are the main portal in enforcing these
ideals.
Section 3
It is hard to argue the advantages for Exxon-Mobil to not have a specific anti-discrimination policy for
their Lesbian, Gay, Bisexuals, and Transgenders (LGBT) workers; but, there must be some reason that
shareholders have voted over the past decade to not include them in the code of ethics or employee
handbook. It is clear that Exxon-Mobil and Wells Fargo have very different organizational culture and
ethics governance in this situation and in others. Exxon-Mobil is headquartered in Texas and places great
importance in its conservative values that shape their workplace environment (Gunther, 2006, p. 1). The
majority of Exxon-Mobil’s shareholders also place great importance in conservative policies, and have
made it clear that they do not wish to explicitly include anti-discrimination for GLBT employees
pertaining to their sexual-orientation (Gunther, 2011, p. 3). For Exxon-Mobil to obey the wishes of their
shareholders establishes strong reputational capital (Hartman, 2004, 128). Reputational capital for ExxonMobil is integral to fostering a controlled and stable environment because it means that stakeholders will
give them more cooperation, support, and ultimately more money (Hartman, 2004, 128) With support
from the owners it will be a more stable job environment for managers and employees, as well as a more
profitable venture.
Another key component to Exxon-Mobil’s conservative and stakeholder-oriented organizational culture
is the importance of economic efficiency (Gunther, 2006, p. 3) Every part of a corporation’s code of
ethics and employee handbook is legally binding, so by not specifically mentioning sexual-orientation as
its own entity Exxon-Mobil is protecting themselves and employees from law suits (Gunther, 2006, p. 3).
Lawsuits are extremely popular and many people jump on any opportunity to find reason to file one with
corporations. They are also very expensive and time-consuming for firms to combat them, so Exxon
Mobil may see value in decreasing their chances of having this issue by not including a legally binding
clause in their code of conduct (Gunther, 2006, p. 3) With less liabilities for future costs from lawsuits,
Exxon-Mobil can increase profitability and further strengthening their relationship with shareholders.
Wells Fargo receives many advantages for their support towards the LGBT workplace community by
including them extensively in their ethics governance and workplace culture. A major advantage they
receive from being openly supportive of their LGBT workers is that they do not exclude any LGBT
shareholders, consumers, or major supporters of the LGBT community. Wells Fargo’s Human Resource
Director states that because Wells Fargo is an active supporter of the LGBT community it gives them a
competitive advantage because of their diverse workforce. Not only this, but Callahan also says it helps
the company better understand their diverse customers and communities’ needs (HRC, 2004, p. 1) By
connecting with their consumers and community, there is greater probability of consumer loyalty (HRC,
2004, p. 1). Their current ethics management system regarding sexual-orientation discrimination shows
the value of concern they have for their workers and communities, which speaks to the integrity of their
firm.
Wells Fargo is very open and clear about their policies regarding their anti-discrimination policies for
their LGBT workers, which shows the high level of importance they have on transparency. When a firm
is transparent, it not only makes the employees feel secure but also their customers and stakeholders. The
issue of sexual orientation is a very controversial topic, and it is obvious why other firms shy away from
being outspoken about their support. However, because Wells Fargo is very transparent on their policies
regarding the issue of sexual orientation, it can provide for a more trustworthy environment (Wells Fargo,
2011, p. 9). Even with its controversial nature, many observations and studies have been performed that
conclude there is no harmful effect on shareholder wealth when there is a high level of sexual-orientation
diversity management (Malina, 2008, p. 603). Wells Fargo believes that their high level of support and
transparent disclosure has only made them more profitable and a much more diverse organization (HRC,
2004, p. 1)
Section 4
Although Exxon Mobil was built on conservative views and most of its major shareholders are
conservative, the public backlash that they are worried about if they protect LGBT in their code of
conduct would be much less than the controversy they continue to stir up every time their shareholder
vote against this. Exxon Mobil continues to lose potential profit from people who disagree with their
stance. “The Human Rights Campaign has been trying to mobilize the buying power of gay Americans to
pressure the oil giant,” recommending people to buy oil from other gas stations such as BP. The “gay
purchasing power in America has been estimated at $641 billion a year,” (Gunther, 2011,1) With
Americans depending so much on oil, it seems as if that is a large sum of money to pass up every year.
Exxon Mobil claims that their “zero-tolerance discrimination and harassment policies” should be
assumed that they include sexual orientation, although they continue to tell shareholder that they are
against discrimination against sexual orientation, but will not write it in their code of conduct (Gunther,
2011,1). It makes the community wonder if Exxon Mobil really is against this type of discrimination.
According to Jim Freeman, president of Out & Equal’s board “’ Shareholders drive their corporations to
improve the productivity of the workforce and serve more customers. Both goals are served by rescinding
ExxonMobil’s current written employment policy,” (Gunther, 2011, 1). Mr. Freeman is saying that if
Exxon would explicitly say they do not discriminate against LGBT and have zero tolerance for any
harassment toward this group of people, that they would not only improve productivity they would also
open up an entire new demographic.
Although there is no proof that ExxonMobil has refused to hire a LGBT or treated them unfairly, it is
hard to believe that anyone who supports LGBT’s would want to work for a company who doesn’t
explicitly protect them. With 19 gay rights groups asking Exxon Mobil to change its policy (Gunther,
2011, 1), this company is missing out on more than 602,000 individuals that are equally or more talented
than current employees that would probably have so much to offer this Fortune 500 company.
ExxonMobil has its reasons for not changing their policy, but their advantages are over shadowed by all
the negativity and disadvantages that come with this decision.
It is not 1955, and Wells Fargo isn’t Rosa Parks refusing to give up her seat on the bus to make
statement, but with every decision that is made there are always going to be negative consequences. Wells
Fargo not only states in their code of conduct that they do not discriminate and do protect the rights of the
specific LGBT group, they also offer benefits for partners, (Wells Fargo, 2011, p. 23). By supporting
LGBTs, Wells Fargo may face public backlash from communities who don’t support the same views.
This controversial issue is subjected to negative and positive response, but Wells Fargo believes it is
worth the trouble. When a company explicitly states a certain type of discrimination, they are more
subjected to legal issues. It could be considered legally binding contract with employees and could result
in more court cases (Gunther, 2006, 1). Depending on Wells Fargo’s shareholders, it may cause a stake
of reputational capital (Hartman, 2004, 128). If Stakeholders don’t support LGBT rights, they may be
reluctant to support Wells Fargo as they did in the past.
Section 5
ExxonMobil needs to change their code of conduct to include LGBT rights, be thorough to make sure
they have protected them in every possible way. This company is one out of two on the Fortune 100 list
not to prohibit against gays (Gunther, 1, 2006). Although they have a few advantages or reasons why they
haven’t changed so far, the disadvantages far out weigh the advantages. Wells Fargo would be an
excellent source or example to use when changing their code of conduct, they state “We recruit, hire, and
promote team members based on their individual ability and experience.. We do not discriminate on the
basis of… sexual orientation, gender identity…” “Wells Fargo prohibits harassment based on… sexual
orientation, gender identity…,” (Wells Fargo, 23, 2011). This Specifies on what prohibited harassment is
and all the sorts of ways it can be performed, beyond legal level. Managers also need to educate, enforce
and supervise employees on the discrimination of sexual orientation and transgender. It should be a clear
understanding that no discrimination toward LGBT will be tolerated and there will be severe
consequences. It would be smart of ExxonMobil to meet with shareholders and explain and educate them
on the discrimination going on and how it affects these individuals. People need to be reminded that
LGBTs are people too and deserve to feel protected in their everyday lives. ExxonMobil can explain to
their shareholders that they have chosen to protect this group of people as they would for any type, that
doesn’t mean they agree with the lifestyle, they just need to respect one another. ExxonMobil is not only
losing potential business, but also limiting their company from working with many talented people
because of the lack of support. By the installment of protection ExxonMobil will become a more
transparent company and would be respected and trustworthy (Wells Fargo, 2011, p. 9).
Although Wells Fargo has our ideal code of conduct and protect LGBTs they can always improve to
make sure they are keeping eithical ideas in mind at all times. To prevent public backlash, Wells Fargo
could start an advertisement or campaign designed to educate the public about this problems with
discrimination, focusing on discrimination toward LGBTs. Making the public aware may help people
understand and create more respect for this group of people. We also suggest to make sure that an Open
Door Policy is in place and is being continuously used to prevent legal issues. If employees feel
comfortable enough to talk about work place issues before the escalade, many legal battles could be
prevented. Lastly, we recommend meeting with shareholders to discuss any concerns and to continue to
be open and honest with all stakeholders.
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