LKQ Corporation – Transgender Inclusion (2023)

Outcome: Successfully withdrew proposal with agreement from company to improve public reporting.

Resolved: Shareholders ask the company to adopt and publicly disclose a policy, with details and timing at the discretion of the company, offering all employees affirmative transgender-inclusive healthcare coverage.

Transgender-inclusive healthcare benefits may include hormone replacement therapies, mental health services, surgical reconstruction, and other medically necessary procedures. While the Affordable Care Act has removed categorical exclusions of gender-related care, insurers can still restrict some forms of care for being “cosmetic” or “not medically necessary.”[1]

According to the Human Rights Campaign’s (HRC) Corporate Equality Index (CEI), LKQ lags other companies in providing an LGBTQ+-inclusive workplace.[2] The company scored 55/100 in 2022 and according to HRC does not offer equal health coverage for transgender individuals. Conversely, 67% of the Fortune 500 and 86% of all 1200 CEI-rated businesses offer transgender-inclusive health insurance coverage. Competitors AutoZone, Advance Auto Parts, and Lear Corporation have all scored 85, 90, and 90, respectively, on the CEI.

LKQ’s employees may especially be affected by the lack of supportive corporate and state policies. Approximately 39 percent of LKQ’s employees are based in North America. Tennessee, considered one of the worst states for LGBTQ+ equality with 31 anti-LGBTQ+ bills proposed in 2021, is a major operating location for LKQ.[3] The company reports that it will “focus on policies and programs to attract, retain, and develop people of different backgrounds and experiences,” but lacks disclosure of what kind of programs are in place.

LGBTQ+ inclusion is a national issue. In the last two years, LGBTQ+ rights have contracted across state legislatures, with anti-trans legislation being a particular subset of discriminatory legislation. 80 percent of 2021’s 191 anti-LGBTQ bill proposals were anti-trans bills.[4] The discrimination, harassment, and structural barriers transgender people face lead to poorer health outcomes such as chronic disease, mental health problems, and substance abuse.[5] These experiences are linked to suicide: 42 percent of transgender people report suicide attempts to cope with discrimination (versus 8 percent in cisgender people) and 81 percent have contemplated suicide (versus 30 percent in cisgender people).[6] The added stress for LGBTQ+ employees or employees with LGBTQ+ children is high, affecting their well-being and productivity.

Additional costs associated with employers of adding transgender-inclusive benefits are reportedly low. In a survey of 34 CEI-rated companies of varying sizes, 85 percent of companies reported that there were no costs involved with adding transgender health coverage.[7]  Companies report implementing inclusive benefits to make them competitive employers, recruit and retain employees, reflect their values of fairness and equality, improve employee satisfaction and morale, and demonstrate their commitments to diversity and inclusion – reasons which we believe are well-aligned to long-term shareholder value.[8]

We believe LKQ will enhance its competitive edge in retaining and attracting talent by joining the growing ranks of companies guaranteeing LGBTQ+-inclusive policies. 

[1] https://www.americanprogress.org/article/advancing-health-care-nondiscrimination-protections-for-lgbtqi-communities/

[2] https://reports.hrc.org/corporate-equality-index-2022?_ga=2.50746473.1554759222.1664484882-73899178.1663097317

[3] https://freedomforallamericans.org/legislative-tracker/anti-lgbtq-bills/

[4] https://www.nbcnews.com/nbc-out/out-politics-and-policy/nearly-240-anti-lgbtq-bills-filed-2022-far-targeting-trans-people-rcna20418

[5] https://www.americanprogress.org/article/protecting-advancing-health-care-transgender-adult-communities/

[6] https://www.americanprogress.org/article/protecting-advancing-health-care-transgender-adult-communities/

[7] https://williamsinstitute.law.ucla.edu/publications/trans-employee-transition-coverage/

[8] https://williamsinstitute.law.ucla.edu/publications/trans-employee-transition-coverage/