Give 'Em the Business

Demonstrators protest the Religious Freedom Restoration Act in Indianapolis on March 28

On March 25, Marc Benioff, CEO of global cloud computing company Salesforce Inc., tweeted, "We are forced to dramatically reduce our investment in IN based on our employee's & customer's outrage over the Religious Freedom Bill." The following morning, he followed up that tweet with another: "Today we are canceling all programs that require our customers/employees to travel to Indiana to face discrimination."

Immediately in the wake of Indiana governor Mike Pence's signing of that state's religious freedom restoration act (RFRA) in March, celebrities (Miley Cyrus, Stephen King, Audra McDonald, Bill Maher, Ashton Kutcher, and others) and religious organizations (the United Church of Christ, Presbyterian Church [USA], the Sikh Coalition, the Islamic Society of North America, Religious Action Center of Reformed Judaism) spoke out against the law. Sporting organizations (the NBA, the NCAA, NASCAR) expressed concerns about their ability to hold their events in a discriminatory environment in Indiana, and a long list of governors and mayors barred civic employees from taking any official business trips to the state.

There were other effects too. Asa Hutchinson, governor of Arkansas, immediately announced that he would refuse to sign a similar RFRA passed by his state's legislature. Nevada's RFRA bill died, as did those in Georgia and North Dakota (and prior to the Indiana uproar, there had been virtually no signs of any impediments to their passage).

What happened here? Were lawmakers responding to the crushing weight of smug, liberal moralizing? Had Pence and the legislative Republican supermajority merely repented due to the shame of having anti-LGBT bigots (as identified by GLAAD) at the private signing ceremony for the law?

It was none of those. The lightning-fast rewriting of the law didn't come from a desire to not offend celebrities or moderate churches, nor was it an instantaneous evolution on equality. It came from the danger of losing business.

Salesforce had been just the tip of the iceberg. Tim Cook, CEO of Apple, decried the RFRA in a Washington Post op-ed. Angie's List, a conservative Indianapolis-based company, halted its $40 million expansion there. The trending #BoycottIndiana wasn't an idle threat. Yelp, Eli Lilly and Co., the Indiana Chamber of Commerce, and even Walmart all blasted the law. This was not a coterie of NPR-listening, latte-drinking Birkenstock wearers that Pence could dismiss out of hand.

With NASCAR and Walmart aligned on the issue, and with the state's $4.4 billion in tourism and convention income suddenly on the line, Pence and the state's legislature began a furious backpedaling, promising a new law that prohibited anti-LGBT discrimination.

The history of this law mattered too. The 1993 federal RFRA was written in the aftermath of a Supreme Court decision in which the government was allowed to restrict individual Native Americans' use of ceremonial peyote. That law said the government could not "substantially burden" the exercise of religion without a compelling interest. But the Burwell v. Hobby Lobby Stores, Inc. Supreme Court decision turned that law on its head, ascribing the same potential for religious belief to a business -- even a giant one like Hobby Lobby -- as to individuals.

Indiana's RFRA was different than the federal law. It provided legal inoculation for businesses to deny services to individuals if the denial came from a religious belief. The Indiana drafters were responding to a New Mexico case in which a photography company refused to shoot a lesbian commitment ceremony. (Justice Ruth Bader Ginsburg actually cited that case in her Hobby Lobby dissent as a potential misuse of the ruling.)

Demonstrators rally outside of the U.S. Supreme Court during oral arguments in Burwell v. Hobby Lobby Stores, Inc., March 25, 2014 in Washington, D.C.

The only real application of the RFRA apparent to critics was the potential for it to be used against LGBTs. Since there is no federal or statewide law protecting LGBTs from discrimination in Indiana, the proverbial Christian pizzeria denying services to a gay couple wasn't proverbial for long. If the impetus to use religion as the means to beat up on gays came from the expansion of marriage equality, then the justification came from the Hobby Lobby decision.

The close reading of laws post-Hobby Lobby meant that corporations understood RFRAs differently than they had previously, and they also understood the negative implications the law had for the business climate. Corporations came out declaring that discrimination would be bad for the bottom line.

Bob Witeck is a consultant for Walmart, and for 25 years he has worked with other corporations, including Marriott, American Airlines, and MTV Networks, with the aim of helping companies build trust and strengthen authentic bridges with LGBT stakeholders. "Over many years," he says, "I have seen how LGBT engagement and inclusion has directly helped many corporations to see these strategies as less risk and much more reward."

His work with multinational and multistate employers has demonstrated that it is "costly, complicated, and distracting to face changing conditions and varied requirements from state to state," Witeck says, citing his own marriage, which is not recognized in every state.

Under RFRA 1.0, Indiana faced the prospect of losing critical employees. "Large employers know from experience that recruiting and retaining top talent is tougher across uncertain legal landscapes," Witeck explains. "Put simply, more same-sex couples and families are very resistant to relocating or putting down roots in states where legal safeguards are missing, and can put their children and their own relationships at risk. It can't be plainer." Decisions come from the workforce too. A quarter century ago, there were few out LGBT executives, no queer business groups, "no Out and Equal, no National Gay and Lesbian Chamber of Commerce, no Reaching Out LGBT MBA strategy," Witeck says. Of course, there are now, and those executives and groups affect business policy.

Corporations must consider their reputations when it comes to engagement with public policy. While right-wing boycotts of companies that pursue equality (Disney, Home Depot) have been feckless duds, the outcries against patently anti-LGBT companies (Exxon, Chick-fil-A) or business leaders (Barilla CEO Guido Barilla, Mozilla's former CEO Brendan Eich) or political leaders (Pence) have not gone unnoticed. The outcries forced positive changes.

Business interests in Indiana have now trumped political pandering to religious conservatives. In fact, businesses are declaring that cultural conservatives are interfering with good business. What looks like a sudden shift is the result of decades of hard work with leaders of industry, and the timing is a result of the convergence of LGBT rights, public attitudes, and business interests.

Corporations didn't launch the LGBT rights movement. Activists and advocates did. But in a culture in which money talks, and in an era when the far right is attempting to insert discrimination back into the law, corporations can provide invaluable momentum for equality.

Indiana politicians, and now the nation, will ignore them at their peril.