Labor & Employment Law

An employment law issue generated controversy yesterday at a company's annual shareholder meeting in Seattle.  The company is Expeditors International, a Fortune 500 global logistics company based in Seattle.   It trades in the NASDAQ 100 and generates $5 billion in annual revenue.

A shareholder proposal requested adoption of a written policy banning sexual orientation discrimination. The resolution failed after it was unanimously opposed by the board of directors, but it came close with 49% of the vote.  In an article about the resolution published here, a former Expeditors employee is identified as saying that ?he experienced an intolerant corporate culture and heard managers use derogatory terms for gays during his three years at the global logistics company.?

A copy of the shareholder proposal can be found here.  Here is the written position statement supporting the resolution:

Employment discrimination on the basis of sexual orientation diminishes employee morale and productivity. Because state and local laws are inconsistent with respect to employment discrimination, our company would benefit from a consistent, corporate wide policy to enhance efforts to prevent discrimination, resolve complaints internally, and ensure a respectful and supportive atmosphere for all employees. Expeditors International will enhance its competitive edge by joining the growing ranks of companies guaranteeing equal opportunity for all employees.

The board of directors published this statement opposing the resolution:

The Board of Directors unanimously recommends voting against this proposal and believes that our current policy and practice more than achieve the objectives of this shareholder proposal.

Our long standing policy is as follows:

Expeditors has a policy of equal opportunity with respect to race, sex, marital status, age, color, religion, creed, national origin, handicapped, veteran or other protected status. The Company is morally and legally committed to give all persons an equal opportunity for employment and promotion based solely on their individual qualifications and the valid requirements of the position. While supervisors and managers are charged with the responsibility of preventing discrimination, the success of the Company's equal opportunity policy really depends on the unbiased attitudes and actions of all employees.

The factors specifically listed in the first sentence of the existing policy are those prohibited by existing federal law. The second sentence of this policy goes beyond these basic legal requirements and obligates the Company to extend equal opportunity in employment and promotion to all persons subject only to classification based upon individual qualifications and valid requirements of the particular position. This shareholder resolution itself implies that some additional action would be necessary to implement the resolution. This is simply not the case. The Company has received no indication from its employees that discrimination on the basis of sexual orientation is practiced within the Company, nor has the Company received notice from its employees, customers or suppliers that the Company's employment policies or practices jeopardize its relationship with any of them.

The debate reflected in these two position statements is reminiscent of the debate that occurred in the Washington Legislature two years ago before sexual orientation discrimination was declared illegal in the State of Washington. Expeditors' employees in Washington are already protected from sexual orientation discrimination by the Washington Law Against Discrimination, Ch. 49.60 RCW.

In the Washington Law Against Discrimination, "sexual orientation" is defined in very broad terms, as follows:

"Sexual orientation" means heterosexuality, homosexuality, bisexuality, and gender expression or identity. As used in this definition, "gender expression or identity" means having or being perceived as having a gender identity, self-image, appearance, behavior, or expression, whether or not that gender identity, self-image, appearance, behavior, or expression is different from that traditionally associated with the sex assigned to that person at birth.?

RCW 49.60.040(15).  No doubt we have not seen the last of this shareholder proposal, at Expeditors or at other companies.  In addition, if a sexual orientation lawsuit is ever filed against Expeditors under Washington law, one also wonders whether a plaintiff's attorney at some point may try to argue that the company's position on this issue provides some evidence of discriminatory intent or company-wide policy condoning sexual orientation discrimination.