Why businesses are speaking out on religious-objections laws

AP News
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Posted: Apr 01, 2015 5:22 PM
Why businesses are speaking out on religious-objections laws

NEW YORK (AP) — A bevy of big-name businesses including Apple, Gap and Levi Strauss are publicly speaking out against religious-objections legislation in states such as Indiana and Arkansas.

The world's largest retailer and America's largest private employer, Wal-Mart Stores Inc., waded into the debate Tuesday when its CEO urged Arkansas Gov. Asa Hutchinson to veto a bill in Arkansas that critics said would open the door to discrimination against gays and lesbians. On Wednesday Hutchinson called for changes to the bill.

Separately, a group of technology executives from companies such as Yelp and Twitter signed on to a joint statement supporting the addition of non-discrimination protections for lesbian, gay, bisexual and transgender people to civil rights laws.

In early 2014, a similar corporate outcry used threats of reduced business to help convince Arizona Gov. Jan Brewer to veto legislation that would have allowed businesses to refuse service to gays based on the owner's religious beliefs.

Here are some reasons corporate America is raising its voice on this issue:

SOCIAL MEDIA MACHINE

Gone are the days when companies could just sit tight and hope that hot-button topics would blow over without them having to make a statement about it. These days businesses get instant feedback from customers on how they feel about an issue, thanks to social media platforms such as Facebook and Twitter.

Social media catapulted objections to Indiana's law to the forefront fast, said Laura Ries, president of marketing strategy firm Ries & Ries. That helped force companies to make their voices heard publicly, she said.

The companies can't stay silent because many customers would see that as tacit support of the laws, she said.

In addition, many of the companies that have weighed in deal directly with consumers. Because so much of the debate centers on whether businesses can deny services to certain groups, Wal-Mart and other retailers could feel the need to forcefully send a message that they're open to all customers.

John Challenger, CEO of outplacement firm Challenger, Gray & Christmas, said that speaking out on the religious-objections legislation may not have been too difficult for some companies because it is not as divisive as some previous hot topics in the U.S., such as gun control.

"This issue seems to so many to be such a wrong," he said.

Dan Eaton, an instructor in business ethics and employment law at San Diego State University, said that since the religious-objections legislation is a law that is perceived to exclude people, companies may feel a broader obligation to speak out.

IT'S ABOUT CUSTOMERS AND WORKERS

Companies know that they have to continuously appeal to the concerns and interests of both employees and customers. That keeps customers coming back to spend money, workers happy and both groups loyal.

Increasingly, companies feel they have to speak up on social issues that could prompt backlash from customers or make companies lose out on talented employees, Challenger said.

"Big U.S. companies realize that their customers and employees care that the company is doing the right thing," he said.

Among the companies speaking out is Aetna, which sent a letter to Indiana Gov. Mike Pence on Monday, arguing that the state's religious-objections law would hurt its ability to attract and retain talent. The insurer has about 500 employees in Indiana. Aetna, which says it has a long history of supporting the LGBT community, also launched a website and marketing campaign this week that targets that community.

With the public becoming more supportive of gay rights, Ries says businesses are seeing that they need to keep pace with evolving views.

"Companies want to be ready for the future and supportive of employees and consumers," she said.

Nancy Rafuse, Practice Group Chair for Labor & Employment at Atlanta's Polsinelli, said today's businesses want to be inclusive and have a "diversity of people and thoughts and ideas" that will help the business appeal to customers who are also diverse.

For example, Wal-Mart joined many other companies in offering domestic partner benefits to same-sex couples, in 2013.

THE BIG ECONOMIC PICTURE

Businesses are also worried about the economic impact of threatened boycotts of states that pass such laws. That can hurt tourism or cause companies to cut back on business in the state — and those effects can reverberate through a regional economy quickly.

In the case of Arizona in 2014, for example, American Airlines CEO Doug Parker suggested his airline would cut flights if the state's business, tourism and convention industry didn't remain healthy.

"An economic boycott is how you get folks to listen," Rafuse said.

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AP Business Writer Tom Murphy contributed to this report from Indianapolis.