Wal-Mart Stores Inc.’s decision to extend health-care benefits to workers’ same-sex partners removes one of the biggest holdouts and adds pressure on other resistant companies to follow suit.
“You can go to your board, and all of a sudden you’re not swimming against the stream as much as you were yesterday,” said Wallace Hopp, associate dean of faculty and research at the University of Michigan’s Stephen M. Ross School of Business. “You can say, ‘Gee, Walmart does it.’ ”
Walmart, the largest U.S. private employer and a frequent target of labor-rights groups, described the change announced Tuesday mainly as a path to a consistent policy as some states alter the definition of marriage. Even so, the switch after years of opposition may help tip the balance at companies such as trucker YRC Worldwide Inc., which is considering partner benefits for 2014, or Exxon Mobil Corp., one of the biggest firms left without such coverage. YRC has Summit County operations.
“They’re so big that everything they do sets an example,” Hopp said of Bentonville, Ark.-based Walmart. The retailer, founded by the late Sam Walton in 1962 and known for policies such as banning explicit lyrics in CDs it sells, serves about two-thirds of Americans monthly.
Overland Park, Kan.-based YRC is “always re-evaluating its benefits based on the needs and changing demographics of our employees,” Kelly Walls, its senior vice president of human resources, said in an email.
The number of Fortune 500 companies offering health-care benefits to same-sex partners has surged in a decade, to about 62 percent last year from 34 percent in 2002, according to the Washington-based Human Rights Campaign.
Exxon, with about 76,900 employees, received the lowest score among the 20 largest companies on the campaign’s 2013 Corporate Equality Index examining policies for lesbian, gay, bisexual and transgender workers.
On its website, Exxon says it offers coverage for “legally recognized spousal relationships” in countries where it operates. In the United States, “We follow the federal definition of spousal relationships,” Alan Jeffers, an Exxon spokesman, said.
Full-time workers’ spouses and domestic partners will be eligible for coverage in medical, dental, vision, life, critical illness and accident plans, Walmart said in a postcard provided to Bloomberg News and being mailed to employees this week.
“We thought it was important to develop a single definition for all Walmart associates in the U.S. to give them consistency in the various markets we operate in across the country,” said Randy Hargrove, a spokesman for the retailer.
Walmart may have held out for so long in part because the size of its employee base makes it costly to expand benefits, said Molly Iacovoni, a senior vice president who works on employee benefits issues at Aon Hewitt, a human resources consulting group.
The retailer has 1.3 million full- and part-time U.S. employees, Hargrove said. More than half participate in health-care plans. A total of 1.1 million employees and family members are covered by the plans.
“This may have been a cost issue for them,” said Iacovoni, who is based in Lincolnshire, Ill. “It may be that they are going to see a little bit of a cost rise, especially since they’re offering both same and opposite sex.”