EATTLE, July 1 — Wal-Mart Stores, the nation's largest private employer, has expanded its antidiscrimination policy to protect gay and lesbian employees, company officials said today.
The decision to include gay employees under rules that prohibit workplace discrimination was hailed by gay rights groups, already buoyed by a Supreme Court ruling last week that struck down a Texas sodomy law, as a sign of how far corporate America has come in accepting gay employees.
The decision was first disclosed today by a Seattle gay rights foundation that had invested in Wal-Mart and then lobbied the company for two years to change its policy. The group, Pride Foundation, which along with several investment management firms holding stock in Wal-Mart had met as shareholders with company officials to discuss the policy, received a letter last week from Wal-Mart outlining the new employee protections. Wal-Mart officials confirmed the policy change today.
"It's the right thing to do for our employees," Mona Williams, Wal-Mart's vice president for communications, said in a telephone interview. "We want all of our associates to feel they are valued and treated with respect — no exceptions. And it's the right thing to do for our business."
Ms. Williams said the company was sending out a letter today to its 3,500 stores and that store managers would then convey the policy change to the company's more than 1 million employees. She said that while investors like Pride Foundation had a role in the decision, the most important factor was a letter to senior management officials about six weeks ago from several gay Wal-Mart employees, saying that unless the company changed its policy the employees would "continue to feel excluded."
Wal-Mart has been careful not to alienate its customers who might hold conservative views. In recent months, the company has decided to stop selling three men's magazines it said were too racy and to partially obscure the covers of four women's magazines on sale in checkout lines. The company said customers felt the magazine cover headlines were too provocative and planned to use U-shaped blinders to cover them.
Wal-Mart has also refused to sell CD's with labels warning of explicit lyrics.
Ms. Williams said she saw no conflict between the decision to limit the distribution of entertainment products based on content and the decision to protect gay employees.
"In each case, we sit down and think through the individual decisions," she said. "Putting in the blinders was the right thing to do. In this case, once again, we talked about it and decided it was the right thing to do."
With Wal-Mart making the policy change, 9 of the 10 largest Fortune 500 companies now have rules barring discrimination against gay employees, according to the Human Rights Campaign, a gay rights group in Washington, D.C., that monitors discrimination policies and laws.
The exception is the Exxon Mobil Corporation, which was created in 1999 after Exxon acquired Mobil, and then revoked a Mobil policy that provided medical benefits to partners of gay employees, as well as a policy that included sexual orientation as a category of prohibited discrimination.
Wal-Mart said it had no plans to extend medical benefits to unmarried couples, but gay rights groups that have pressed for coverage for domestic partners said they would continue to lobby the company to do so.
Among the Fortune 500 companies, 197 provide domestic partners with medical coverage, including several of the major airlines and the Big Three automakers, and 318 have antidiscrimination policies that extend protection to gay employees, according to the Human Rights Campaign.
With Wal-Mart now joining the ranks of companies with protections for gay employees, and in light of last week's Supreme Court ruling, gay rights groups said they expected many corporations, and possibly state governments, to follow suit.
"A major argument against equal benefits, against fair treatment of employees, has been taken away," said Kevin Cathcart, executive director of the Lambda Legal Defense and Education Fund, referring to the Supreme Court ruling on Lawrence v. Texas. "And so even within corporations it's a very different dialogue today, a very different dialogue."
There is no federal law prohibiting discrimination in the workplace on the basis of sexual orientation, but 13 states, the District of Columbia and several hundred towns, cities or counties have such legal protections in place for public and private employees, according to the latest information from the Human Rights Campaign.
As outlined in the letter to Pride Foundation, Wal-Mart's new policy states, "We affirm our commitment and pledge our support to equal opportunity employment for all qualified persons, regardless of race, color, religion, gender, national origin, age, disability or status as a veteran or sexual orientation."
It goes on to say that managers and supervisors "shall recruit, hire, train and promote in all job positions" based on those principles and "ensure that all personnel actions" are taken based on those principles.
The company said that it also revised its policy on harassment and inappropriate conduct to include sexual orientation and that the new written policy would encourage employees to report discriminatory behavior to management.
As the nation's largest private employer and one whose stores are not unionized, Wal-Mart has long been the target of organized labor, and some of its labor practices have been challenged in lawsuits. One lawsuit, filed in San Francisco, accused the company of favoring men over women in promotions and pay.
In addition, the company faces more than 40 lawsuits accusing the company of pressuring or forcing employees to work unpaid hours.
While Wal-Mart attributed the discrimination policy change to the letter from its gay employees, it had been under pressure from several investors, including the Seattle group and three other management investment firms with stock in the company.
They are all members of the Equality Project, a nonprofit group in New York that monitors corporate policies on sexual orientation and lobbies for protections for gay employees.
Under Securities and Exchange Commission regulations, any stockholder with $2,000 or more in shares can introduce a "shareholder resolution" on an array of company policy issues, including antidiscrimination rules. The resolutions are not binding, and the shareholders have no influence over "ordinary business," including benefits and wages, according to S.E.C. officials.
The Seattle group and the other investors began discussions with Wal-Mart in August 2001, when several members of the groups went to the company headquarters in Bentonville, Ark., to try and persuade officials to change the policy, several group members said. As investors in General Electric and McDonald's, the Seattle group had already pressured the companies, through shareholder resolutions, and both companies have since extended workplace protections to gay employees.
Wal-Mart initially said it would study the issue, said Zan McColloch-Lussier, campaign director for Pride Foundation. But in a conference call in the spring of 2002, Mr. McColloch-Lussier recalled, company officials told the group, "Thanks, you've educated us, but we're not going to change our policies, we'll do management training."
More letters and telephone calls were exchanged, and then last Friday a letter came announcing the policy change.
Arthur D. Ally, president of the Timothy Plan, a religious-based investment group that had pressured the company about the magazines, said today that he would not sell Wal-Mart stock because of the revised antidiscrimination policy but would object to certain sensitivity training programs like "taking every employee in an organization and indoctrinating them in the homosexual agenda."
It was unclear today exactly how Wal-Mart planned to train employees, but Ms. Williams said that a computer-based training program would include discussion of sexual orientation.