Leading Institutional Investors in Exxon Mobil Call On CEO Lee Raymond to Update Nondiscrimination Statement to Include Sexual Orientation (A)

May 25, 2004 — Stockholders owning over 54 million shares ($2.36 billion dollars) of common stock in ExxonMobil have written to CEO Lee Raymond today, calling upon the company to implement a sexual orientation nondiscrimination policy. This month, ExxonMobil shareholders have been voting on a shareholder proposal calling for this policy. Results of the voting will be announced at the company’s stockholder meeting in Dallas on May 26.
Leading city, state and union pension fund officials who are signatories of the letter are Comptroller William C. Thompson for New York City Employment Retirement System (NYCERS is the lead sponsor of the shareholder proposal), Comptroller Alan G. Hevesi for the New York State Common Retirement Fund (a co-filer of the proposal), Maine State Treasurer Dale McCormick, Vermont State Treasurer Jeb Spaulding, the American Federation of Labor – Congress of Industrial Unions (AFL-CIO) and the Service Employees Industrial Union (SEIU).
Other signatories include Trillium Asset Management (a co-filer of the proposal), Amalgamated Bank, ISIS Asset Management, Domini Social Investments, Walden Asset Management (co-filer), Harrington Investments, Boston Common Asset Management, Progressive Investments and Citizens Funds.
ExxonMobil’s policies became controversial in 1999, when the newly merged company ended Mobil’s practice of extending same-sex domestic partnership benefits and excised the term ‘sexual orientation’ from its nondiscrimination and nonharassment policies. Even before these events, Exxon had faced a shareholder proposal calling on the company to add ‘sexual orientation’ to its written equal employment policies. The shareholder proposal is going before stockholders for the sixth time this year. Support for it increased from under 7% in 1998 to over 27% last year.
The investors’ letter calls for the changes on business and ethical grounds, noting, “Discrimination in the workplace is still an ongoing, persistent reality in the lives of lesbian, gay, bisexual and transgendered persons. In 36 U.S. states, discrimination and harassment on the basis of sexual orientation is perfectly legal.” To counter this, over 75% of the Fortune 500 (and over 95% of the Fortune 100) have added ‘sexual orientation’ to their nondiscrimination policies. “Within the oil and gas industry,” the letter points out, “ the following companies explicitly list ‘sexual orientation’ in their nondiscrimination policies: Amerada Hess, BP, ChevronTexaco, ConocoPhillips, Marathon Oil, Occidental Petroleum, Shell Oil, Sunoco, Unocal, Valero and Williams Companies. ChevronTexaco, BP and Shell grant same- and opposite-sex domestic partnership benefits to employees.”
“These companies understand that inclusive policies improve morale, reduce turnover, and make their firms more competitive in recruiting new talent. This, of course, translates into cost savings.”
ExxonMobil’s refusal to reconsider its policies have led to boycotts, protests, and letter-writing campaigns. The Human Rights Campaign, the nation’s largest lesbian and gay rights organization, maintains its “Campaign For Equality at ExxonMobil,” a web-based effort which is keeping the issue alive before millions of lesbian, gay, bisexual and transgender consumers. At the company’s 2002 stockholder meeting, CEO Raymond brusquely told a questioner from the group that it should “go pass a law” if it wished to change ExxonMobil’s policies.
Open letter to Exxon Mobil CEO Lee Raymond
from institutional investors
May 25, 2004
Lee Raymond Chairman and Chief Executive OfficerExxonMobil Corporation 5959 Las Colinas Blvd. Irving, TX 75039
Dear Mr. Raymond:
We are writing to you today in support of the stockholder proposal at ExxonMobil Corp. that asks ExxonMobil to formally add ‘sexual orientation’ to its written nondiscrimination statement. The proponents of this resolution are the New York City Employees Retirement System, Trillium Asset Management, the Human Rights Campaign (the nation’s largest lesbian and gay advocacy group), Walden Asset Management on behalf of the Needmor Fund, the Sisters of St. Francis of Philadelphia, Amalgamated Bank, Piper Jaffray, Rockefeller & Co. and several individual filers.
This is the sixth year that the proposal is on the ballot and as you know, last year it received the support of 27.3% of votes cast.
ExxonMobil’s current policies are a step backwards from the policies of the former Mobil Corporation and continue to damage our company’s brand. Prior to the merger, Mobil provided same-sex domestic partnership benefits and also included ‘sexual orientation’ in its nondiscrimination and non-harassment policies. Upon the merger of the two companies in 1999, these policies were rescinded, generating thousands of letters and emails of protest. Twenty-four members of Congress wrote to you, stating, “At a time when a number of [employers] are adopting measures that provide equitable treatment of employees in the workplace, it is astonishing that a major corporation such as ExxonMobil would act to reverse this positive trend.” The intransigence of ExxonMobil’s actions led the nation’s largest lesbian and gay rights organizations to launch the “Campaign For Equality at ExxonMobil,” a web-based effort which is keeping the issue alive before millions of lesbian and gay consumers.
We understand and appreciate the measures that ExxonMobil has taken to indicate to its employees that sexual orientation-based discrimination and harassment is unwelcome at the company. Nevertheless, the fact that ‘sexual orientation’ is not listed alongside other protected categories in the company’s EEO statement and non-harassment policy undermines the professed inclusiveness of the company’s policies. As you know, the methods chosen to convey the message of tolerance do not carry the full force, either as corporate policy or in a court of law, as official nondiscrimination and non-harassment policies. They are also more easily revocable than official nondiscrimination and non-harassment policies.
At the heart of the matter is our dispute with ExxonMobil’s arguments as outlined in the “Media Statement” found on ExxonMobil’s web site. This document states, “Our preference is to not delineate specific groups or characteristics beyond that required by law because we want our policy to be explicitly clear that discrimination on any basis is prohibited at ExxonMobil; i.e., discrimination for any reason is prohibited, and our enforcement of that policy is not limited to
only those groups or characteristics specifically listed in the policy statement.” The logic in this statement is counterintuitive at best. Including ‘sexual orientation’ alongside the other categories listed would make the policy explicitly clear. Excluding the term obfuscates the matter and compels further explanation every time the question is raised. If the phrase ‘sexual orientation’ were included, indeed, it would be unnecessary to elaborate so extensively on the implicit meaning of your policy.
With respect to this policy, ExxonMobil is falling further behind its peers.
ExxonMobil lags behind its peers in its industry and in the Fortune 500. The absence of federal law has not stopped hundreds of companies (including over three-quarters of the Fortune 500, according to the Human Rights Campaign) from adding the words ‘sexual orientation’ to their nondiscrimination policies. These companies understand that inclusive policies improve morale, reduce turnover, and make their firms more competitive in recruiting new talent. This, of course, translates into cost savings.· Within the oil and gas industry, the following companies explicitly list ‘sexual orientation’ in their nondiscrimination policies: Amerada Hess, BP, ChevronTexaco, ConocoPhillips, Marathon Oil, Occidental Petroleum, Shell Oil, Sunoco, Unocal, Valero and Williams Companies. ChevronTexaco, BP and Shell grant same- and opposite-sex domestic partnership benefits to employees.
· The majority of ExxonMobil board members serve on one or more boards of companies that have adopted written sexual orientation policies. These include:
AT&T Wireless* Campbell Soup* Carlson Companies* Caterpillar Corning Deutsche Bank* General Mills Foundation* Georgia Pacific J.C. Penney* J.P. Morgan Chase May Department Stores Metropolitan Life* Moody’s Investor Service* Oracle* Penn Mutual Life Pfizer* Qwest Stanford University* Verizon* Wells Fargo* Williams Cos.* Wyeth*
* Also grant domestic partner benefits to same-sex couples.
We urge you to draw upon their experience.
Mr. Raymond, discrimination in the workplace is still an ongoing, persistent reality in the lives of lesbian, gay, bisexual and transgendered persons.
In 36 U.S. states, discrimination and harassment on the basis of sexual orientation is perfectly legal. Unless a company adds the words ‘sexual orientation’ to its nondiscrimination and harassment policies, the case law clearly establishes that employees are not protected from this form of harassment discrimination. For example, in 2002 the 9th U.S. Circuit Court of Appeals ruled that federal civil rights laws do not protect homosexual workers harassed because of their sexual orientation.According to a 2000 Government Accounting Office (GAO) report, there is “no indication that [workplace nondiscrimination] laws [in 14 states] have generated a significant amount of litigation.”
According to a 2002 poll by Harris Interactive and Witeck-Combs, more than two out of five (41 percent) gay and lesbian workers in the United States report facing some form of hostility or harassment on the job. Moreover, almost one out of every 10 gay or lesbian adults also state they were fired or dismissed unfairly from a previous job, or pressured to quit a job because of their sexual orientation, the survey found. This type of workplace discrimination reflects hostility that is still present in American society despite the progress that has been made in dispelling bigotry and intolerance. The Federal Bureau of Investigation tracked 1,464 offenses against lesbians and gay men in 2002 motivated by anti-gay bias, accounting for 16.7% of all hate crime incidents.In conclusion, we urge you to use the opportunity of the upcoming stockholder meeting to make the simple change we request and put this controversy to rest.
Sincerely,
William C. Thompson New York City Comptroller
Alan G. HevesiNew York State State Comptroller and Trustee for the New York State Common Retirement Fund
Dale McCormick TreasurerState of Maine
Jeb SpauldingTreasurer State of Vermont
William B. Patterson AFL-CIO Office of Investment
Steve AbrechtService Employees Industrial Union(SEIU) Master Trust
Shelley Alpern Trillium Asset Management
Elizabeth McGeveranISIS Asset Management
John HarringtonHarrington Investments
Melissa MoyeAmalgamated Bank
Adam KanzerDomini Social Investments
Joanne DowdellCitizens Funds
Steven HeimBoston Common Asset Management
Ken Scott Walden Asset Management
Jim MaddenProgressive Investments