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What's Up With Walmart? Why Retailer Spoke Out Against RFRA

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By Casey C. Sullivan, Esq. on April 03, 2015 11:54 AM

As Indiana and Arkansas were considering "religious freedom" bills that, opponents argued, would give companies the right to discriminate, several high profile corporations took public stances against them.

Apple, Salesforce, American Airlines and even Walmart spoke out against the legislation. Yeah, Walmart, the second largest corporation in America, often reviled by progressives, contacted the Governor of Arkansas and urged him to veto his state's RFRA legislation.

Why?

What's Wrong with More Corporate Protections?

Both the Arkansas and Indiana bills provided a very broad definition of 'person.' Any corporation, under the bills, is allowed to assert religious liberty rights. That goes further than the religious rights Supreme Court recognized in Hobby Lobby, when it ruled that tightly held corporations may be able to avoid federal rules that offended the religious beliefs of the business's owners.

Forget for a moment that Walmart is the kind of closely held corporation that Hobby Lobby addressed -- it's owned by the Walton family. The benefits of expanded corporate personhood, even wrapped in unpopular legislation, would seem like something companies would embrace. But Walmart, Apple, and the like don't seem to get ready to join the Church of No Minimum Wage just yet.

Diversity is Good for PR and HR

Fact is, diversity pays. Even if RFRA would have insulated companies from potential discrimination lawsuits -- something any in house counsel would love -- there's more to gain by embracing diversity. From an HR perspective, though bargain shoppers may overlook a company's anti-gay stances, many employees desire to work for more inclusive companies. Companies that score high on diversity rankings, such as HRC's Corporate Equality Index, which gives Walmart a near-perfect ranking, can use these liberal laurels to recruit and retain the best talent. Another benefit? Studies show that workplace diversity can be a key factor in diving innovation and growth.

There's also the risk of suffering from negative public perception should the backlash against Arkansas' RFRA continue. Walmart is based in Arkansas and, as one of the world's largest employers, needs to be able to attract talent to the state. Even with its own expansive protections for LGBT workers, companies can struggle when their surrounding environments are considered unfriendly to diversity. High level talent may simply refuse to relocate to an area viewed as backwards or unwelcoming. This can be particularly true for younger, Millennial workers for who are much more supportive of gay rights.

It's for these reasons that Walmart exercised it's rare veto powers, publicly opposing the Arkansas bill -- RFRA simply would have been bad for its business.

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