Saks Fifth Avenue's Hypocrisy: 'Gay-Friendly' Company Claims Transgender People Don't Have Civil Rights

By Barbara Frankel

Here’s a lesson to corporations that claim to be supportive of diversity: Don’t be hypocrites.

Case in point: Saks Fifth Avenue, which is defending itself against a lawsuit brought by a transgender ex-employeeand just had its Corporate Equality Index rating suspended as details are revealed. Saks claims in its legal filing that it is legal to discriminate against a transgender employee.

But in a subsequent statement, Saks said that the employee did not file a sex-discrimination case but rather a gender identity/transgender status case, which it claims some courts have ruled fall outside of the Civil Rights Act.

Further, in an interview with The New York Times, Gerald Storch, CEO of Hudson’s Bay, Saks’ parent company, said, “In the strongest terms, I want to underscore that Saks Fifth Avenue did not discriminate against the plaintiff. It’s preposterous to think that in any way Saks Fifth Avenue is anything but a strong advocate for L.G.B.T. rights.”

The Story: Leyth Jamal, a transgender woman, alleges in a lawsuit filed in federal court that she was told to “separate her home life from her work life.” According to her lawsuit, she was told to wear men’s clothes and use the men’s restroom. When she failed to comply and complained, she was fired.

Saks filed a motion on Dec. 29 asking that the lawsuit be dismissed because “transsexuals are not a protected class under Title VII” (referencing the 1964 Civil Rights Act, which now bans employment discrimination rooted in race, religion, or sex).

The lawsuit also repeatedly uses the term [sic] when citing her gender, implying Saks doesn’t believe Leyth is a woman.

Ironically, on Dec. 15, Attorney General Eric Holder announced that the Department of Justice says transgender people are protected under Title VII. However, the federal Employment Non-Discrimination Act, which would ban LGBT workplace discrimination, passed the Senate but never passed the House. And the “T” was the sticking point with many House Republicans.

Saks Fifth Avenue’s Hypocrisy: The most amazing part of this whole story is that Saks has a corporate employee handbook, which includes protection for gender identity. But in its lawsuit, Saks claims this doesn’t matter because “employee handbooks are not contracts as a matter of law.”

On its corporate website, Saks says: “Understanding and valuing diversity is core to our commitment, but we recognize that diversity isn’t just about different backgrounds. It’s about fresh and original ideas, experiences and perspectivesall of which have led us to the innovative, creative and unexpected solutions we might never have found otherwise.”

Nowhere on its website, however, are images of or content about LGBT people.

The Human Rights Campaign (HRC) took the unusual step of suspending Saks Fifth Avenue’s Corporate Equality Index score because of the arguments in the lawsuit.

“While HRC honors the right of the company to vigorously defend itself against allegations of misconduct, the arguments made in Saks’ court filings go well beyond arguing the veracity of the allegations,” the HRC said in a statement. Saks had received a score of 90 (out of a possible 100) for its LGBT policies, including its non-discrimination policies. Forty-one DiversityInc Top 50 companies received a 100 score this year.

Avoid the Hypocrisy Trap

Saks’ hypocrisy has garnered increasingly negative publicity and could impact the marketplace. LGBT people and their friends and relatives strongly support LGBT friendly companies and have boycotted unfriendly ones, such as Chick-fil-A. Here are lessons from the DiversityInc Top 50 companies about being inclusive in words and actions. Saks Fifth Avenue has never participated in the survey, so we do not have information on its D&I policies beyond what is on its website.

Have leadership (and a workforce) that mirrors your customer base. Saks was acquired in 2013 by Hudson’s Bay, a Canadian retailer that also owns Lord & Taylor. Information below is on Hudson’s Bay’s senior leadership, according to its website.

Senior Leadership

Hudson’s Bay21%0%0%0%
Top 5024.3%7.7%4.6%5.4%

Clearly state your policies on inclusion and make sure they are backed up by public statements from senior leadership. Although Saks has inclusive policies, there are no statements on its website (or anywhere else we can find) from its CEO or senior leadership on diversity or inclusion.

CEO Website Statement on D&I

2014 Top 5098%
2010 Top 5082%

Have visible senior leadership. At Top 50 companies, CEOs generally lead the D&I effort and hold executives accountable for results. This, companies tell us, creates the belief throughout the organization that D&I is critical to business goalsand inclusivity is not negotiable.

CEO Chairs Diversity Council

2014 Top 5054%
2010 Top 5036%

Back up what you say in your non-discrimination and D&I standards and live by those words. More than a third of the companies in the DiversityInc Top 50 and every one in the Top 10 has told us of incidents in which employees chose not to be inclusive (often around LGBT employees) and were asked to curtail their actions or leave.

Use your LGBT employee resource group (and other resource groups) as an asset in being inclusive. Resource groups are invaluable when it comes to understanding the workforce and the marketplace. It isn’t clear from its website if Saks has an LGBT resource group, but if it does, the group surely wasn’t consulted when this incident occurred.

Has LGBT Employee Resource Group

2014 Top 50100%
2010 Top 5088%

Don’t let lawyers have the final say when it comes to doing the right thing. Most companies in the DiversityInc Top 50 have not been sued for discrimination. Those few that have, especially in class-action cases, have assessed which allegations had validity and what improvements they needed to make to have a more inclusive culture.

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