Sexual Orientation Discrimination in the Workforce
Although discrimination as a whole is completely unethical, sexual orientation in particular has
always been a major dilemma in the workforce. More recently in the corporate world companies have
had more sexual orientation dilemmas dealing with gender identity, the gender which someone chooses
to identify with, rather than biological gender issues. Dilemmas facing biological gender issues such as
women’s pay verses men’s pay has been protested much longer than the recent debate sexual
orientation. Although both dilemmas still exist in the workforce, tolerating different gender identities
such as the LGBT (Lesbian, Gay, Bisexual, and Transgender) community has been a growing struggle for
some companies. The Civil Rights Act of 1964 only prohibits the discrimination based on race, sex,
religion, color and national origin (Dessler 31). The LGBT community in the United States was not
protected on a federal level from discrimination in the workforce until the Federal employment NonDiscrimination Act was sent to congress as a bill. When this bill is passed and becomes a law it is
especially easy for the LGBT community to sue a company based on disparate treatment (intentional
discrimination).
Many companies have taken the initiative to ensure to prohibit all forms of discrimination in
their company by writing a detailed code of conduct or code of ethics. Some companies however fail to
be specific in their code of conduct leaving plenty of loopholes for discriminatory acts to occur. Despite
all rules, regulations, and laws, people should be able to make ethical decisions. We believe in order to
be ethical businesses should follow Hosmer’s Distributive Justice Principle which states “Never take any
action in which the least among us are harmed in some way” (Hosmer 397). This states that people
should only take actions that leave minorities safe from any discrimination or emotional damage.
People should be ethically inclined to follow all laws while going beyond by making decisions that
benefit everyone including minorities.
Two Businesses that have confronted this Dilemma
Two businesses neck deep inside this dilemma are the Nike Corporation and Cracker Barrel.
Nike’s World Headquarters are located in Beaverton, OR. At One Bowerman Drive. Nike is one of the
largest sportswear companies in the world, spanning its corporate empire across numerous countries.
Nike prides itself in supplier diversity. As stated on their company website, “Nike utilizes online
databases of MWDVBEs and GLBTs gathered from over 300 certified data sources,” (nikebiz). Nike
supplies various products from shoes, jerseys, clothing, accessories, and sporting goods. Its revenue as
of 2008 was 18.6 billion dollars and it employed 30,000 employees worldwide. Nike states within its
code of Ethics that “employees are not subject to discrimination in employment, including hiring,
compensation, promotion or discipline, on the basis of gender, race, religion, age, disability, sexual
orientation, pregnancy, marital status, nationality, political opinion, trade union, affiliation, social or
ethnic origin or any other status protected by country law”.
Cracker Barrel is a corporation in the food industry. They have restaurants throughout the
United States and pride themselves in Old Country style cooking. Their corporate headquarters is
located in Labanon, Tennessee on 305 Hartman Drive. It currently has 593 locations according to the
2010 fiscal report located on the Cracker Barrel website. As of July 30, 2010 Cracker barrel made
revenues of 2.4 billion dollars according to their financial statement. In Cracker Barrel’s code of conduct
they state that their employees must “at all times behave with honesty and integrity and they will obey
all applicable local, state, and federal laws and supporting rules and regulations. Additionally, the
company and each of its personnel must conduct their affairs with uncompromising honesty and
integrity”. However there never was a direct statement on the treatment of others with differing views
on sexual orientation.
In 2008, Nike was confronted on this dilemma when they put out an ad that offended the GLBT
community. During Nike’s ad campaign for their new Hyperdunk basketball shoes there was a magazine
advertisement that showed a man putting another man’s head into his groin area as he came in for a
dunk. The picture was followed by a statement that said “This ain’t right”. This ad blew up blogs in the
GLBT community causing a lot of offense. In reaction to the negative press, Nike quickly pulled the ad
an apologized for it. Nike continued to say that the ad was "based purely upon a common insight from
within the game of basketball — the athletic feat of dunking on the opposition, and is not intended to
be offensive." Nike also reiterated its support for the GLBT community not only in its business but also
in its customer base. Nike was also praised by the anti gay community in its support of a 2007 Oregon
law banning discrimination in the workplace, home, and public places against gays.
In 1991 Cracker Barrel faced a hard case with its roots in sexual discrimination. Cracker Barrel
attempting to stress its “traditional American values” fired workers early on in the year. They publically
stated that “It is inconsistent with our concept and values… to continue to employ individuals in our
operation units whose sexual preferences fail to demonstrate normal heterosexual values which have
been the foundation of families in our society.” (cpcs). 11 workers were fired on their sexual
orientation. After the firings were made public, Cracker Barrel let out a written statement by their
chairperson Dan Evins. It stated “We told the gay community that was a mistake, we apologized,
rescinded it. As of right now we have no policy regarding gays and lesbians.” However, they also stated
that they would handle hiring’s of gays and lesbians on a store by store basis and that such persons
would not be hired in areas where it would disrupt the flow of business. This brought the gay and
lesbian community into an uproar. Lynn Cothren, an active protestor in Atlanta stated that “this isn’t
just a gay and lesbian issue, it’s a human rights issue. If they start discrimination against gays and
lesbians, what’s to say they can’t do it for other reasons?”.
Resolving the Dilemma
Nike does a good job at protecting their employees as well as their business by using their code
of ethics. It directly states that any discrimination is not tolerated within the company. By using this
code of ethics its managers can make decisions and potentially protect the employees and customers.
This helps to defend their human rights and support distributive justice as stated in Hosmer’s Ten
Principles. It also states that it follows this code according to the law of the countries it is working in,
helping them also follow government requirements. By embedding these ethical principles inside their
company’s ethos they have a strict plan to carry out in the event that a situation should occur. Using
this code of Ethics, Nike was able to approach the public and state that their ad was in no way intended
to upset the GLBT community. They can also point to their code of ethics and say that discrimination of
any kind is not tolerated within the Nike corporation. They can also use this code of ethics and their
actions to show their support of the GLBT community. In any case that would fall within these
boundaries, Nike’s managers are not only well versed on the topic, but also have a clearly stated
decision of what will and will not be tolerated. Cracker Barrel however finds itself having to make
decisions based on personal opinion and personal integrity without a specific guideline to follow. By
using these principles of Human Rights, Distributive Justice, and Government requirements, Nike can
assure their community that all are created and treated equal.
Cracker Barrel finds itself in a much more difficult situation. Although their code of
ethics states that they will follow the law and practice government requirements, they never directly
state any path to take during discrimination, specifically sexual orientation. Cracker Barrel using the
government requirements principle will never find themselves doing something that is specifically
against the law. This can leave Cracker barrel vulnerable in dilemmas such as these where the problem
lies not in what is legal/illegal, but ethical and unethical. Nike’s code of ethics directly states sexual
orientation in one of the protected groups within their code. Cracker Barrel may help to appease those
with opposing views but it does not create a fair and equal working environment. When faced with
these issues in the past, Cracker Barrel has been forced to make public apologies and statements on the
topics. Cracker Barrel’s code of ethics does push them to use integrity, however it does not describe
exactly how to do so, or create a company ethos for them to follow. It leaves a lot open to the
interpretation of the manager of that specific business as stated in the earlier article. However this can
create bias and essentially hurt the company. All managers are required to have integrity; however their
opinions on what is right and wrong could differ. Nike does not find this in their business plan because
they have directly stated that events such as discrimination on sexual orientation are wrong and not
tolerated within their ethos. Cracker Barrel is forced in these situations to address them as they come
up and potentially hurt their reputation. In the previous encounter, Cracker Barrel had to make a public
apology, however unlike Nike they could not point to their code of Ethics as support behind their claim.
Advantages to Nike and Cracker Barrel Codes of Governance
The two companies that we have chosen to focus on, Nike and Cracker Barrel, both possess
advantages within their work environment on the basis of sexual orientation discrimination. Both
businesses have codes of conduct and ethics currently in place and stress an ethical environment driven
by integrity.
At Cracker Barrel, we found that the organization promotes an ethical environment through its
code of ethics. While not being specific, Cracker Barrel does stress fair behavior and standards. In this
excerpt from the company’s code of ethics, we see that fair behavior and standards are promoted. “The
purpose of this Code is to promote honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional relationships; to promote full, fair,
accurate, timely and understandable disclosure in periodic reports; and to promote compliance with all
applicable laws, rules and regulations that apply to the Company.” The overlying theme of this code
relates closely with the principle of Government Requirements from Hosmer. Many more disadvantages
will be addressed in this code in the next section.
Nike’s code of ethics does a much better job of specifically addressing the dilemma of sexual
orientation. This organization seems to care much more about the fair treatment and standards against
discrimination on the bases of race and sexual orientation. In this excerpt from Nike’s code of ethics, we
can see how valuable ethics and integrity are to the company. “Employees are not subject to
discrimination in employment, including hiring, compensation, promotion or discipline, on the basis of
gender, race, religion, age, disability, sexual orientation, pregnancy, marital status, nationality, political
opinion, trade union affiliation, social or ethnic origin or any other status protected by country law.”
Clearly, Nike prides itself on being ethical and acting with integrity in every business situation. On the
basis of sexual orientation discrimination, we found that Nike has taken that next step and evolved with
the changing times to include this in its governance program. Many principles from Hosmer are evident
within this code such as Government Requirements, self interests, universal rules and distributive
justice. Nike protects the interests of its’ employees while promoting growth and development of the
organization.
Both companies that we have chosen currently have codes of ethics and both of these
governance codes possess information to provide protection against sexual orientation discrimination.
Nike is a clear leader in providing specific coverage against this dilemma and as society continues to
grow and evolve, so will businesses, and we feel that Nike is a frontrunner in the race to a fairer work
environment.
Disadvantages of Nike and Cracker Barrel Codes of Governance
After examining both Nike and Cracker Barrel on the basis of how each company handles the
issue of sexual orientation discrimination, we found that both companies possess weaknesses in some
form or fashion that could be improved. Nike and Cracker Barrel have each encountered dilemmas on
this issue in the past and Nike has clearly done a wonderful job in addressing the problem. Cracker
Barrel, on the other hand, has been scrutinized many times on this issue and still, we fail to find the
specific problem addressed by the organization.
In reading the Cracker Barrel code of ethics, the issue of discrimination is very vague and
nothing specific is addressed on any level such as, race, sexual orientation or gender. In this excerpt,
there is a clear loophole to allow for discrimination without punishment. “Although it is impossible to
address every conceivable situation, it is the intent of this Code to require strict standards of honesty
and integrity of all directors, officers and employees at all times and this Code is an integral part of the
policies and procedures governing all of us at the Company. Therefore, Company directors, officers and
employees should comply with both the intent of this policy and with the specific standards. Nothing in
this Code prohibits or restricts the Company from taking disciplinary action on any matters pertaining to
employee conduct, whether or not they are expressly discussed in this Code.” This leaves the door open
to discrimination and needs to be addressed. Not only do we see a lack of care within the governing
guidelines of the organization, issues have also surfaced that validate the need for specific policies to
protect against discrimination. In the Workplace Prof Blog, we found a situation of sexual orientation
discrimination that could and should have been handled differently but because of the lack of specificity
within the code of ethics, employees and managers were able to get away with discrimination. “A
Manchester, New Hampshire woman says she was harassed at the national chain's restaurant in
Londonderry and that when she complained management reprimanded her.” The disadvantages of
Cracker Barrel’s governance program far outweigh the advantages and something needs to be done
immediately to address the problem.
Issues of sexual orientation discrimination have also risen within Nike but not deliberately. An
ad came out for the Hyperdunk product that featured a player getting dunked on and the crotch of the
other player was in his face. Nike immediately addressed the issue by removing the ad and apologizing
for the image portrayed. In this situation, Nike did not see the possible offense of the action but acted
promptly to fix it. It is very hard to find disadvantages of Nike’s code of governance but in every
situation, there is always room for improvement. Maybe employees could be trained to take the idea of
sexual orientation into account for every situation and use it as a driving force behind its’ ads and
actions.
We chose to examine two companies on different ends of the spectrum of sexual orientation
discrimination in order to fully grasp the issues encountered in business today. Nike currently does a
great job in stressing the issue and being as fair and just as possible in promoting an environment driven
by integrity but training needs to be ongoing and the system must be able to evolve with society.
Cracker Barrel does a poor job in specifically addressing the issue and improvements must be made or
lawsuits will continue to emerge against the company on the issue of sexual orientation as it is one of
the most fragile topics in society today.
Recommendations to Improve Nike and Cracker Barrel’s Ethics Management System
Nike has an effective ethics management system however there is always room for
improvement. Nike’s Code of conduct does a good job prohibiting discrimination however any company
is capable of reaching ethical dilemmas such a sexual orientation. Nike should make decisions as a team
and make all of these decisions completely transparent. If Nike would have had their advertising team
share the ads with the company, asking for critique, before airing them they could have had the ability
to alter the ad before airing it and offending customers. The more people involved in major decisions
the better, because there are more opinions considered.
Another recommendation for Nike is to make sure that the managers in each division of the
company should uphold the highest ethical standards that support the beliefs of Nike Inc. This means
that before management is hired the human resource department should have a long yet effective
screening and interview process to ensure appropriate management is hired. Hiring effective
management that is able to motivate and control employees to work effectively while compiling with
the company’s values would make Nike’s ethics management system stronger.
Adidas one of Nike’s competitors was ranked as one of the most ethical companies in 2011.
Adidas has an outstanding ethical compliance program with “Innovation that Contributes to the Public
Well Being” (ethisphere). Nike’s products also contribute to the well being of the public because all of
Nikes products are beneficial to the human health, however they could work on their ethical compliance
program. Putting an effective compliance program into place by guiding employees and management
with specific instructions and examples in the training process would help Nike be as ethical as their
competitor Adidas.
Cracker Barrel has gotten themselves into a lot of trouble with discrimination because of their
ethics management system is not effective. Since Cracker Barrel has been sued for discrimination
multiple times for millions of dollars it would be more effective to use this money elsewhere. A good
way to motivate employees is to use incentives. Cracker Barrel could have incentives offered to
management that is able to set a good example to employees by making ethical decisions as well as
enforcing ethical behavior in the workplace. If management fails to make ethical decisions or decisions
that support the company’s values, decisions should be made by going through top executives, a top
down approach rather than a bottom up approach to decision making.
Although firing is definitely in order for Cracker Barrel’s employees that were behaving unethical
by discriminating, we recommend that to avoid firing the hiring system must be altered. Cracker Barrel
may have fewer problems with discrimination if they strive to hire a diverse staff. Diversity in the
workplace could help Cracker Barrel have a different perspective on their values. In order to do this the
human recourse department should strategize a way to recruit a diverse pool of potential staff. A third
party monitoring system could also be involved in the hiring process to make sure that no one is subject
to unethical discrimination. Another way to avoid firing is to alter the training process. Make sure that
workshops are put into place and expect all the employees learn all the values and expectation so they
are able to make decisions that are appropriate.
Starbucks Coffee Company was the only restaurant/café to make the list of “2011 World’s Most
Ethical Companies” (ethisphere). Starbucks Coffee has been extremely ethical in the past years which
have been one of their strategies to success. Starbucks knows that they have a responsibility to treat
their employees and customers with respect and tolerance. Cracker Barrels code of ethics discusses fair
behavior plenty but fails to address respect. Making respect to all people including minorities a core
value of their code of conduct could help improve standards of customer and employee treatment
within this company.
Discriminating based on sexual orientation hurts a company on so many levels that avoiding this
behavior all together is the best solution. Both Nike and Cracker Barrel have the ability to avoid these
dilemmas altogether by making their ethics management system as effective as possible. Once Nike and
Cracker Barrel takes these steps recommended to adjust their ethics management system they can
repair their reputations and regain customers or workers that they have previously offended.
Work cited
"CRACKER BARREL OLD COUNTRY STORE, INC." Code Of Business Conduct And Ethics.
Cracker Barrel, Feb. 2009. Web. 26 Apr. 2011.
<http://files.shareholder.com/downloads/CBRL/1237961858x0x270945/56493631-2455-4f0ca26b-c9d13374634a/CodeofConduct12_8_08.pdf>.
"Cracker Barrel Sued Again for Sexual Orientation Discrimination." Workplace Prof Blog.
N.p.,n.d. Web. 22 Apr. 2011.
<http://lawprofessors.typepad.com/laborprof_blog/2006/02/cracker_barrel_.html>.
Dessler, Gary. A Framework for Human Resource Management Sixth Edition. New York: Prentice Hall,
2009. Print
Hosmer, Larue T. "The Academy of Management Review." Trust: the Connecting Link Between
Organizational Theory and Philosophical Ethics 20.2 (1995): 396-397. Print
"NIKE, Inc. CODE of CONDUCT." Nike Code Of Conduct. Nike Inc, 2010. Web. 26 Apr. 2011.
<http://www.nikebiz.com/responsibility/workers_and_factories.html#code_of_conduct>.
"Offensive Hyperdunk Ads Pulled Homophobic." Weekly Drop. N.p., n.d. Web. 22 Apr.
2011. <http://weeklydrop.com/2008/07/offensive-hyperdunk-ads-pulled/>.
Press, Associated. "Nike Pulls "That Ain't Right" Ads Seen as Homophobic." U.S.. Fox News, 26
July 2008. Web. 26 Apr. 2011. <http://www.foxnews.com/story/0,2933,391604,00.html>.
"We Believe Diversity Drives Innovation." Supplier Diversity. Nike Inc., 2011. Web. 26 Apr.
2011. <http://www.nikebiz.com/doing_business_with_nike/supplier_diversity/>.
Woodward, Jim. "Activists Organize Boycott of Cracker Barrel: Company Boasts of Anti-Gay
Discrimination." Labor Notes June 1991: 7. Print.
<http://www.cpcs.umb.edu/labor_notes/files/14707.pdf>.
"2011 World's Most Ethical Companies." Ethisphere. N.p., 2011. Web. 26 Apr. 2011.
< http://ethisphere.com/2011-worlds-most-ethical-companies/>.