Cato corporation criticized for refusing to protect LGBTQ employees

Company cites lack of federal guidelines to justify its decision

CHARLOTTE, N.C. — The Charlotte-based fashion corporation Cato declined the opportunity to vote on implementing employment non-discrimination policies including sexual orientation and gender identity, prompting criticism from shareholders. Walden Asset Management, based in Boston, represents 77,700 Cato shareholders and was pushing for a vote at the upcoming annual shareholders’ meeting in May.

“We want to see the company be more proactive,” Walden analyst Carly Greenberg told The Charlotte Observer. “We’re little dumbfounded why they won’t just add these words to … make it very explicit that people will be protected.”

Cato’s justification for blocking the vote is based on the assertion that their current policy is consistent with federal anti-discrimination guidelines. It’s true; the federal government does not prohibit discrimination based on sexual orientation or gender identity.

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In fact, the Obama administration had issued guidance that sexual orientation and gender identity were protected classes under Title VII’s prohibition against sex discrimination. The Trump Administration, however, has recently issued an executive order that effectively undoes President Obama’s guidance.

So there are no current federal guidelines that prohibit discrimination based on sexual orientation or gender identity, yet private corporations are free to implement their own non-discrimination policies. Walden wants Cato to do so, and by that action leave the “shrinking minority” of corporate powers who do not protect LGBTQ employees’ rights.

Walden cited a Human Rights Campaign (HRC) study on LGBTQ discrimination in the workplace. Among other conclusions, HRC found that a majority of Fortune 500 companies protect LGBTQ employees. Of the 500 companies included on the list, 89 percent prohibit sexual orientation discrimination, and 66 percent prohibit gender identity discrimination. In addition, 66 percent also provide health insurance benefits to employees’ domestic partners.

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Walden’s logic is sound, but CEO John Cato is content with his company’s current policies and sees no need to add to them.

“[We’re] proud of our track record of providing opportunities for all, which is supported by inclusive policies and practices that ensure every associate, vendor and customer is treated with respect,” Cato said in a statement.

The Cato corporation operates in 33 states, with a total of more than 1,300 stores and more than 10,000 employees. As things currently stand, firing a Cato employee for coming out as gay or transgender would not technically be against company policy.

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