The CEI Criteria Explained

Filed under: Workplace

What Does a CEI Rating Mean?

The CEI assesses employment policies, benefits and practices and does not purport to assess a corporation in its entirety. The CEI is – at its core – a measure of the workplace policies and practices of an organization. The rating also allows companies to receive a limited number of points for positive engagement with the external LGBTQ community. These may include sponsorships or advertising that build a company reputation and support its recruitment and retention goals. Furthermore, recognizing that many of the businesses rated in the CEI employ thousands of employees that span most, if not all, of the 50 states, each business’s rating should be viewed as a snapshot of its activity. A CEI rating cannot convey all the nuances of a business’s particular approach to LGBTQ workplace issues or the LGBTQ community at large. As such, readers are encouraged to seek out other sources of information on corporate behaviors that are important to them.

Responsible Citizenship

The Corporate Equality Index survey and report are largely reliant on self-reporting from the business entity itself about its workplace policies and practices. However, the final criterion of the HRC Corporate Equality Index allows points to be deducted from a company’s rating in the event of a significant official or public anti-LGBTQ blemish on the company’s recent record.

This process relies on research conducted by HRC as well as LGBTQ and allied individuals who work with or for these businesses and who communicate with us about discrepancies or challenges they face with the employer.

When HRC encounters behaviors or actions that seem to run counter to HRC’s expectations of a CEI participant, HRC provides the business an opportunity to clarify and correct the situation by first contacting the business and offering a chance to respond and ensure, to the best of its ability, that no such action would occur in the future. Businesses unwilling to do so are penalized 15 points from their overall rating, with a minimum possible CEI rating of zero percent.

Possible Behaviors or Actions that Run Counter to HRC's Expectations of CEI Participants:

  • Financial relationships with anti-LGBTQ advocacy organizations.
    HRC maintains an ongoing, comprehensive list of organizations whose primary mission is to oppose LGBTQ equality. Each year, HRC staff review available IRS Form 990s (see GuideStar for more information) for these organizations and for the charitable arms of CEI participants to identify donations to organizations that oppose LGBTQ equality. Donations to these organizations from an employer’s coffers are grounds for a deduction in score. HRC also looks for connections between the largest shareholders or corporate officers of publicly-traded organizations to anti- LGBTQ organizations, where the information is available. In general, private relationships between company executives or significant shareholders and anti-LGBTQ organizations do not impact a company’s internal policies toward LGBTQ employees. In these cases, the relationship may be noted in HRC materials, but may not be grounds for a deduction in points.
  • Rolling back protections and benefits.
    Each year, HRC reviews recent mergers and acquisitions to ensure that inclusive policies and practices survive changes in leadership or ownership.
  • Court cases and legal proceedings.
    Each year, HRC does a comprehensive review of legal cases and proceedings involving LGBTQ issues and CEI participants, particularly looking for legal defense arguments that go beyond a reasonable defense and could undermine LGBTQ equality more broadly.
  • Opposing shareholder resolutions to advance LGBTQ equality.
    HRC supports the efforts of shareholders in pursuing avenues to advance LGBTQ inclusive workplace policies. While these efforts have met with considerable success, some companies continue to oppose the simplest efforts to expand equal opportunity to all their employees.

Examples of When a Business has Lost Points on this Criterion:

  • Exxon Mobil Corp., Wal-Mart Stores Inc. and Verizon Communications Inc. have all lost points on this criterion for their steadfast opposition to adding “sexual orientation” and “gender identity” to their equal employment opportunity policies. Specifically, shareholders have brought resolutions forward to the boards of these companies making the business case for having an inclusive non-discrimination policy, but the boards still explicitly oppose doing so, and stated their opposition in their notice to shareholders. Cracker Barrel Old Country Store Inc. had also opposed a similar resolution, but has since amended its policy.
  • Law firm Foley & Lardner LLP lost points on this criterion for its decision to provide substantive legal expertise to organizations working to oppose marriage equality in the District of Columbia. Although the firm has a long history of pro bono support for LGBTQ causes, it decided not to abandon its representation of the anti-LGBTQ organization and has not provided HRC with evidence that such clearly discriminatory clients will not be engaged in the future.
  • Perot Systems Inc. lost points on this criterion for rescinding domestic partner benefits for its employees. The company ultimately reversed course several years later and points were restored.

What Happens When an Employer has Lost Points on this Criterion?

If at any time after losing points on this criterion an employer changes course and satisfies HRC’s noted concerns, the HRC will re-evaluate the criterion for that employer. The rating change may not be reflected until the following year’s Corporate Equality Index report, depending on the situation.

Any employer that chooses to maintain its position against LGBTQ equality will continue to lose points on this criterion until they make an organizational, firm-wide decision to change course and satisfy HRC’s noted concerns. HRC will always seek to improve an organization’s rating and seeks resolutions to benefit an organization’s LGBTQ workers, consumers and investors.