The Board of Directors of the J.C. Penney Company, Inc. has endorsed a shareholder resolution submitted by New York City Comptroller William C. Thompson, Jr. on behalf of the New York City Employees’ Retirement Fund (NYCERS) and the Teachers Retirement System (TRS) for it to include sexual orientation in its non-discrimination policy. That Board has indicated it will support the resolution when shareholders vote on the measure at J.C. Penney’s annual meeting on May 16.

Additionally, the FedEx Corporation (formerly Federal Express) has agreed to amend its non-discrimination policy to include sexual orientation. The Comptroller, on behalf of NYCERS, submitted a resolution to FedEx on April 1.

FedEx and J.C. Penney bring to five the number of Fortune 500 companies to announce that they plan to amend their non-discrimination policies after resolutions were submitted by New York City pension funds. The resolutions ask companies that have not already done so to bar discrimination based on sexual orientation.

“I am pleased that FedEx and J.C. Penney are stepping forward to offer stronger protection for their gay and lesbian workers,” Comptroller Thompson said. “This is an important human and labor rights issue, and I am hopeful that this decision will have widespread impact across corporate America. Everyone has the right to feel safe and secure in the workplace.”

“FedEx and J.C. Penney now join a majority of their corporate colleagues in the Fortune 100,” Thompson said. “More than 85 percent of Fortune 100 companies have adopted written nondiscrimination policies specifically citing sexual orientation, and I am hopeful that more will now do so.”

NYCERS has $9 million in holdings in J.C. Penney, and TRS has $6.7 million in holdings invested in the company. In total, the city’s five pension funds have invested $23.3 million in J.C. Penney. NYCERS - which cosponsored the resolution with Trillium Asset Management - has $27.7 million in holdings in FedEx. The City’s five funds have invested $60.6 million in the company.

The FedEx resolution specifically stated that: “We believe that FedEx’s failure to include sexual orientation in its non-discrimination policy risks jeopardizing the company’s otherwise strong reputation for workplace practices.”

"This is welcome news. We are gratified to see these companies recognizing how important it is to protect their employees from discrimination -- especially gay and lesbian employees who are not covered by federal law," said Kim I. Mills, education director the Human Rights Campaign, the largest national gay, lesbian, bisexual and transgender advocacy organization. "We applaud Comptroller Thompson and the trustees of the Teachers Retirement System and New York City Employees’ Retirement System for their leadership in these efforts."

These were only the latest decisions by companies to embrace the change following resolutions submitted by New York City. Earlier this year, Houston-based Dynegy Inc. of Houston, Texas, American Electric Power of Columbus, Ohio, and the TXU Corporation of Dallas, Texas, all amended their policies in response to New York City’s efforts.

The resolutions called for the companies to adopt a policy stating: “Employment discrimination on the basis of sexual orientation diminishes employee morale and productivity….Our company would benefit by a consistent, corporate-wide policy to enhance efforts to prevent discrimination, resolve complaints internally, and ensure a respectful and supportive atmosphere for all employees.”

Resolutions submitted by the Comptroller on behalf of the funds are still active with the El Paso Corp., CenterPoint Energy (formerly Reliant Energy), and the ExxonMobil Corporation. Last year, ExxonMobil challenged the resolution. The Securities and Exchange Commission ruled that shareholders could vote on the measure. At the corporation’s annual meeting in May 2002 in Dallas, more than 1 billion in shares representing $44 billion in holdings were voted in favor of the measure (representing more than double the number of shareholders who supported the measure in 2001). However, the measure did not pass.

In December, the Board of Directors of CBRL Group, Inc., the parent company of Cracker Barrel Old Country Stores, voted unanimously to add sexual orientation to the company’s non-discrimination policy. The Board of Trustees had waged a decade-long campaign to prompt a shareholder vote on the measure.

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