A shareholder proposal to amend Verizon Communications Inc.'s written equal employment policy to explicitly prohibit discrimination based on gender identity was voted down May 1, but backers of the plan say they were encouraged by the amount of support it got, and the group that proposed the resolution will bring it back next year.

Preliminary results showed that the resolution, which was opposed by the company's board of directors, won 17 percent of shareholder approval. It takes 3 percent for a proposal to come back, which it achieved. According to Alberto Canal, of Verizon media relations, more than 2 billion votes were cast. Canal said the company has 340 employees in the Bay Area.

Tim Brennan, treasurer and vice president of finance for the Unitarian Universalist Association of Congregations, which owns 1,300 shares of stock in the company, said the proposal is part of a process of educating other shareholders, the board, and top management

"This is the first time they've seen a proposal like this," Brennan said. "I think the fact that 17 percent voted 'yes' indicates a substantial number of shareholders think this is an important issue the board should address." He said the proposal would "absolutely" be filed again.

The vote could bring some bad news for the company, though. The Human Rights Campaign likely will knock the company's Corporate Equality Index score from 85 to 70 if Verizon doesn't make any changes by late August, when HRC expects to publish its latest rankings.

"It's beyond me how a company would be such a stick in the mud for no apparent reason at all, when they have a good track record," said Daryl Herrschaft, director of HRC's Workplace Project.

"They've done a good amount of work on our issues ... and they've supported a lot of GLBT organizations, but that's why I think we're really having trouble understanding their reasoning on this one."

But, Herrschaft added, "We want to keep the dialogue open with them." He said HRC wants Verizon to do everything it can to "restore their reputation with our community."

HRC itself has run into trouble with the transgender community in the last year. The organization continued to support the proposed federal Employment Non-Discrimination Act, even after gender identity was dropped from the bill, which passed in the House of Representatives.

The Bay Area Reporter learned of the proposed Verizon resolution from a shareholder.

Verizon's proxy statement included the board of directors' position that "Verizon has a zero tolerance policy for any conduct that is intended to or has the effect of creating an intimidating, hostile or offensive work environment.

The Verizon Code of Conduct and the company's non-discrimination policy expressly prohibit discrimination, sexual harassment, or other unlawful harassment based on sexual orientation, age, race, and several other factors.

"The board shares the proponent's interest in preventing discrimination and harassment on the basis of gender identity" but strong anti-discrimination policies and strict enforcement make adding gender identity unnecessary, according to the statement.

Brennan said the explicit policy is needed because, even though the company may have good practices, the "policy could easily change from one management team to another." He said it would also send a strong signal to potential employees.

In an April 15 letter to Verizon Chairman and CEO Evan Seidenberg, HRC President Joe Solmonese remarked the company had been a vocal leader on LGBT equality in the workplace and expressed "surprise and disappointment" with the board's decision to oppose the resolution. He warned of the company's score being lowered in HRC's index.

In response, Marc C. Reed, Verizon's executive vice president for corporate human relations, wrote that although the company didn't see the need to add gender identity to its non-discrimination policy, "We will continue to monitor the workplace and employee experience" and keep the lines of communication open with HRC.

Policy reviewed

Reed also wrote that while independent shareholder advisory groups don't set non-discrimination policy, he cited analyses of two such groups that reviewed the proposal.

"They essentially punted the decision to someone else," Herrschaft said. Verizon is "basically waiting to amend their policy until someone else tells them to, which is the wrong way to go about diversity and inclusion in the workplace."

The B.A.R. obtained copies of the advisory groups' reviews.

One company, RiskMetrics Group, recommended opposition to the resolution, noting that Verizon hasn't had "any significant controversy regarding discrimination on the basis of gender identity" and the company's commitment to a policy that bans discrimination based on sexual orientation.

However, noting that shareholder advocacy groups are increasingly seeking to expand equal employment opportunity policies to include gender identity, the analysis stated the group "will consider revising its existing policy guidelines in the future to potentially support resolutions that have expanded their scope to include protection on the basis of gender identity."

In its analysis, Glass Lewis & Co. said the shareholders hadn't demonstrated clearly enough that the resolution would lead to increased shareholder value, but added, "We believe that shareholders should remain vigilant on this topic and carefully monitor the actions of the board and management team going forward. We believe that board members can be held accountable for decisions on these issues through the election of directors."

When asked about the board's stance on the resolution, Verizon's Canal reiterated the company's "zero tolerance" policy. He also said that GLOBE, the company's LGBT employee resource group, supported the position.

Joseph Perisie, who is listed on the group's Web site as its president, said he could not comment without Canal's approval. When asked for permission to speak with Perisie, Canal wrote in an e-mail, "I don't believe he's interested in doing so, no. Sorry."

Herrschaft said he spoke to Verizon's LGBT employee group about six or seven months ago, and he said there are members of the group who want the company to add this policy.

In other corporate news

Meanwhile, Wells Fargo Bank shareholders voted April 29 not to adopt a "neutral sexual orientation policy" that would have excluded "any matters related to sexual interests, activities or orientation."

According to the Securities and Exchange Commission, there were 146,759,457 votes in favor of the resolution; 2,261,097,887 votes against it; and 124,645,096 abstentions. There were 348,036,386 broker non-votes. The company's board of directors had recommended shareholders vote against the proposal.

Wells Fargo is known for being supportive of the LGBT community. HRC has given the company a 100 percent rating on its Corporate Equality Index for four consecutive years.

The main threshold for a shareholder to propose a resolution is that they have to have owned at least $2,000 worth of stock for one year.