Micron rebuffs shareholder vote

Micron Technology Inc.'s board of directors has rejected a shareholder resolution to change the Boise, Idaho, company's policies so employees cannot be fired on the basis of either their sexual orientation or gender identity.

The resolution, which was filed by New York City comptroller William C. Thompson Jr. on behalf of the New York City Pension Fund System in June 2006, received an unprecedented 55% of shareholder votes at the annual meeting last December. But despite the vote, Micron's general counsel has told Thompson that the company would ignore the vote and not revise its policies because it feared "expanded legal liability."

This is the first time that a majority of shareholders at any U.S. company has voted to ban discrimination based on sexual orientation and gender identity. For most social issue resolutions, receiving shareholder support ranging anywhere from 20% to 30% is considered a significant mandate.

Zachary Wright, who chairs the shareholder activist committee for the Seattle-based Pride Foundation, said the vote was an “incredible show of support” given the fact that Micron opposed the measure and many shareholders automatically vote with management on shareholder resolutions.

“You’ve lost half the vote right there because most people don’t even bother to read the resolution,” Wright said. “So to get into the 55% range is just an amazing show of support given the institutional momentum behind voting with management.”

Wright traveled to Boise to make the presentation about the resolution last December and was surprised by the warm welcome he received from the room of about 300 people.

“People came up afterward and said, ‘We’re glad you’re here, and we’re definitely supportive of the change,’” he recalled. “I think even in conservative areas people get this issue.”

According to a May 2006 Gallup poll, 89% of Americans believe that GLBT individuals should have equal rights in the workplace.

Daniel Francisco, spokesperson for Micron Technology, said the company is committed to a harassment-free, nondiscriminatory environment and that they believe their current policies and practices achieve these objectives.

“In terms of what we do to try to ensure a nondiscriminatory environment, we try to recruit, hire, train, and promote team members without regard to race, color, sex, religion, national origin, physical or mental disability, veteran status, or any other classifications that are protected under applicable law,” Francisco said. “Employment decisions are made to further the principle of Equal Employment Opportunity, and team members are encouraged to report any incidence of harassment in accordance with our policy.”

Neither Micron’s policies, Idaho state law, nor federal Equal Employment regulations currently provide protections for people who are lesbian, gay, bisexual, or transgender.

New York City's Pension Fund System has more than 2.1 million shares of Micron stock, valued at more than $38 million. Thompson has filed more than 50 similar shareholder resolutions to date, and approximately 36 companies have changed their policies based on those resolutions.

Thompson called it “truly astounding” that Micron would continue to ignore a 55% shareholder approval for changing the policy. "Strong antidiscrimination policies are not simply an expression of proper social policy; they make sound business sense," he wrote in a letter to the company's chairman, president, and CEO, Steven Appleton.

Daryl Herrschaft, director of the Workplace Project for the Human Rights Campaign, called the legal liability argument a red herring. “Having internal policies to address discrimination is always superior to outside litigation, and having internal procedures opened up reduces the potential for employees to file suit,” said Herrschaft. “By setting a tone in policy you actually reduce the number of potential problems.”

Herrschaft did not have any statistics on the number of suits filed against companies that have adopted policies, but he said the number of suits filed in states that have sexual orientation protections is small. People can still be fired on the basis of their sexual orientation in 33 states and on the basis of their gender identity in 42 states.

The Pride Foundation’s Wright said his committee makes it a practice to follow up with companies that have changed their policies to include sexual orientation and, anecdotally, they haven’t found an increased incidence of litigation.

“What these companies always say is, ‘We don’t have this discrimination anyway,’” he said, referring to objections he sometimes hears from company management teams. “So if you don’t have discrimination anyway, you’re not going to have any more liability by making it into a policy right?”

However, according to a recent BusinessWeek story, the number of lawsuits filed by terminated employees against their employers has shot up in recent years, in part because of protected categories like sex and race, businesses claim.

Wright suggested that the bigger cost to companies without policies might be in the area of retention. He noted that both Texas Instruments and Intel, fellow high-tech companies, have LGBT nondiscrimination polices and provide domestic-partner benefits to their employees.

“Micron is really the laggard in this industry on this issue,” he said.

According to the Human Rights Campaign, 86% of Fortune 500 companies and 98% of Fortune 100 companies have adopted sexual orientation nondiscrimination policies over the past 20 years. (Kerry Eleveld, The Advocate)