Should Your Company Do Business in Indiana After ‘Religious Freedom Law’

Update (3/30/2015 4:35 pm): The business coalition ofCummins,Eli Lilly and Companyand other companies have sent letters to the Indiana legislature asking for new legislation to make certain that the neither the RFRAor any other Indiana law “can be used to justify discrimination based upon sexual orientation or gender identity.


By Barbara Frankel

On March 28, opponents of Indiana Senate Bill 101, the Religious Freedom Restoration Act, rallied at the Indiana State House.

The huge backlash against the state of Indiana’s decision to enact the so-called “Religious Freedom Bill, ” which allows businesses and individuals to deny services to LGBT people, is being led by corporate America.

The bill was signed into law by Republican Gov. Mike Pence Thursday and will take effect in July. It is the first in the nation in a state that does not have anti-LGBT discrimination laws on the books. About a dozen other states are contemplating similar laws.

Pence this weekend said he was “taken aback by negative reactions” and expected legislation this week to clarify the law. But appearing on television, he repeated that he stands by the law. Asked if the state would make LGBT people a protected class, he replied: “That’s not on my agenda.”

There is opposition to this law in Indiana, even from Republicans. Five GOP members of the Indiana General Assembly who opposed it were clear about what the bill means.

“Do we want our sign to say ‘Welcome’Rep. Ed Clere told the Indianapolis Star. “Or do we want our sign to say ‘Closed for Business’ Or ‘Certain people aren’t welcome’ Or, as some have suggested, ‘We don’t accept fill-in-the-blank’

Corporate Opposition

Two Indiana-based DiversityInc Top 50 companies leading the fight against the law, Cummins and Eli Lilly and Company, Nos. 15 and 27, have told us that the law will hurt their ability to recruit and retain talent.

Lilly has about 12,000 employees in Indiana, 44 percent of its global workforce. About 10,700 are at its corporate headquarters in Indianapolis.

“As we recruit, we are searching for top talent all over the world. We need people who will help find cures for such devastating diseases as cancer and Alzheimer’s. Many of those individuals won’t want to come to a state with laws that discriminate,” the company said in a statement.

Janice Chavers, Director of HR & Diversity Communications, attended a meeting last week of the company’s LGBT employee-resource group, PRIDE.

The group members were concerned for sales reps who want to move up in the company because they are required to have a stint at corporate headquarters “and we have lost sales reps because of this. Not only could we lose more employees in Indiana, we could lose employees who don’t want to come here at all. It affects families and friends. There is a domino effect and not a positive one,” she said.

The PRIDE group was told that Eli Lilly, led by the efforts of its President, Chairman and CEO John Lechleiter, will continue to fight to repeal the law. “They understand that we are going to continue to work to make Lilly and Indiana as inclusive as possible,” she said.

Testifying before the Legislature earlier this month, Cummins’ Vice President and Chief Administrative Officer Marya Rose stated: “As you know, we have worked very hard to attract the best and brightest employees to Indiana that help make companies like ours as successful as possible But, the legislation still creates an environment that is a less welcoming and inclusive place for all of our employees.”

Cummins, headquartered in Columbus, has almost 9,000 employees in Indiana (about 8 percent of its workforce), is building a new global headquarters for its distribution business in Indianapolis, and is committed to the state, said Jon Mills, Director of External Communications. But the company, led by Chairman and CEO Tom LInebarger, has been vociferous in its opposition to the bill.

“The heart of the bill really runs counter to our core values of diversity and respecting others … We are looking into our next steps,” Mills said.

They aren’t the only organizations to fear this legislation. Salesforce CEO Mark Benioff announced on Twitter that his company, based in San Francisco, would no longer have its employees travel to Indiana.

Bill Oesterle, CEO of Angie’s List, said his company is abandoning a plan to expand its headquarters in Indianapolis.

Apple CEO Tim Cook, who came out last year, tweeted: “Apple is open for everyone. We are deeply disappointed in Indiana’s new law and calling on Arkansas Gov. to veto the similar #HB1228.”

And Seattle Mayor Ed Murray also said he would prohibit city employees from traveling to Indiana for work.

The NCAA, which is based in Indianapolis and is holding the Final Four men’s basketball event there this week, has also expressed concern.

In a statement, the NCAA said: “Moving forward, we intend to closely examine the implications of this bill and how it might affect future events as well as our workforce.”

Celebrities and politicians tweeted outrage, including singer Audra McDonald, who asked if she is now expected to leave the gay members of her band behind when performing in Indiana.

This is not the first time corporate America has helped lead the fight against LGBT discrimination. Last year, more than a dozen companies urged Arizona Gov. Jan Brewer to veto a similar law, which she did. Those companies included AT&T, Marriott International, Aetna and Verizon Communications. And AT&T was the first corporation to publicly denounce homophobia at the Olympics in Sochi.

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