Mark(et)ing nondiscrimination: privatizing ENDA with a certification mark.

• Author: Ayres, Ian

TABLE OF CONTENTS INTRODUCTION I. MARKING NONDISCRIMINATION A. Minimalist Certification B. Third-Party Beneficiaries C. The Benefits of Privatizing ENDA 1. Amelioration 2. Demonstration 3. Realignment II. TAILORING THE COVERAGE OF THE LICENSING AGREEMENT A. Gender Identity and Expression B. Healthcare Coverage C. More Expansive Measures of Gay Friendliness D. Covering Affiliate Corporations E. Group Enforcement III. MARKETING NONDISCRIMINATION A. The Incremental Costs B. Risk Management C. Satisfying Input Demand D. Additional Consumer Demand 1. Government Contractor Ordinances 2. The Impact on Demand in a World of "Acoustic Separation" 3. The Impact on Demand: Boycotts E. Corporate Morality IV. RESPONDING TO CRITICISMS A. Reducing Demand for a Statutory Prohibition B. Contingent Demand for a Statutory Prohibition C. Commodifying Equality D. Closeting Equality CONCLUSION INTRODUCTION

People in the United States strongly support the simple idea that employers should not discriminate against gays and lesbians. In a 2003 Gallup poll, eighty-eight percent of respondents said that "homosexuals should ... have equal rights in terms of job opportunities." (1) Even prominent social conservatives--such as George W. Bush--give lip service to the idea that employment discrimination on the basis of sexual orientation is wrong. (2)

But gay rights advocates have achieved only modest legal reform on this issue. Seventeen states have prohibited employment discrimination against lesbians. (3) A seemingly modest bill, the Employment Nongays Discrimination Act (ENDA), which only prohibits disparate treatment on the basis of sexual orientation, has been introduced several times in Congress, always without success. (4) ENDA has little chance of passing during the Bush administration unless midterm elections in 2006 radically change the face of Congress. (5) Civil rights advocates may even abandon ENDA and instead promote a broader, omnibus civil rights improvement act, in which employment rights for gays would presumably play a part.

This Article attempts to extend ENDA rights to individual employees by another means. The certification mark, a little-known piece of intellectual property, provides a mechanism for employers to commit to the exact substantive duties of ENDA. We have created a symbol, an FE inside a circle, that we call the "Fair Employment" mark.

We have formally applied to the United States Patent and Trademark Office to register this symbol as a certification mark, which we would own. (6)

The idea behind the Fair Employment mark is simple, really: by entering into the licensing agreement with us, an employer gains the fight (but not the obligation) to use the mark and in return promises to abide by the word-for-word strictures of ENDA. Displaying the mark signals to knowing consumers and employees that the company manufacturing the product or providing the service has committed itself not to discriminate on the basis of sexual orientation.

Other certification marks (such as the Good Housekeeping Seal and the Underwriters Laboratory and Orthodox Union marks) require the mark holder to police licensees to insure compliance with the requirements of the licensing agreement. But the licensing agreement for the Fair Employment mark allows employees and applicants to enforce the ENDA duties directly as express third-party beneficiaries of the agreement. (7) The Fair Employment mark thus replicates the core enforcement mechanism of ENDA by creating private causes of action in the same class of individuals who would gain protection under the statute.

The mark represents an incremental strategy in the struggle for equality. Most importantly, the mark holds out the possibility of extending substantive ENDA rights--especially rights to sue for discrimination--to potentially hundreds of thousands of workers and applicants who are currently uncovered.

But the mark also provides a "demonstration" effect. It provides members of Congress with information that might quell concerns about whether they should support ENDA. The mark provides a mechanism for producing quasi-binding precedent about a statute before the statute is ever enacted. The mark thus provides legislators with information about the ways a statute might be interpreted by courts, as well as the rates of litigation the statute might generate.

Of course, these benefits of the mark will only accrue if employers actually sign the license agreement. Ay, there's the rub. "No employer in her right mind would volunteer to be a defendant in a lawsuit," our gentle readers might reasonably protest. We appreciate this concern and devote a fair amount of space in this Article to argue that employers could rationally volunteer for potential liability.

Of the reasons employers might make themselves vulnerable, the most important is that "practicing" the mark might induce more sales. The mark provides another way supporters of gay rights can vote with their wallets, rewarding progressive policies and institutions. Just as consumers can travel and spend tourism dollars to support progressive state and local governments, so, too, they can reward companies that treat gay employees fairly, by purchasing their products and services.

The mark might also help recruit employees and appease other input suppliers. Some employers might see little downside to signing the license agreement because their employees already have private rights of action under state law or local ordinance. Importantly (and at first blush somewhat paradoxically), some employers might sign to contain discrimination liability since the licensing agreement mirrors ENDA's limitations on certain aspects of liability (for example, the 180-day filing requirement and no disparate impact liability). Some firms might prefer to make discrimination liability subject to the specific terms of a contract rather than the expansive (and general) terms of an employee handbook. Still others may sign just because it is the right thing to do.

Many, many employers have already included sexual orientation in nondiscrimination policies contained in employee handbooks. Employers often use their nondiscrimination policies to recruit employees and appease customers, but during litigation some employers argue that an employee handbook does not constitute a promise not to discriminate. "At will" employment regimes in some states do not recognize employee handbooks as constraining employers' right to fire for any reason--including an employee's sexual orientation. By signing the license, an employer effectively waives this possible defense.

The Article is divided into four parts. Part I describes the law of certification marks and the potential benefits of the Fair Employment mark as a new type of federalism. Part II digs into the details of the licensing agreement and defends the drafting choices that we made in tailoring the duties of licensees. Part III identifies employers that we predict would sign the mark--even in the face of potential boycotts and legal liability. Finally, Part IV takes on concerns about whether adoption of the mark will actually further the greater goal of equality.

1. MARKING NONDISCRIMINATION

   Certification marks are used to signal that a product or service bearing the mark has met a specific standard set forth by the mark's owner, the licensor. Groups or individuals can register certification marks with the federal government much as we do trademarks. (8) But certification marks are a distinct type of intellectual property because they are the only piece of IP that owners cannot "practice" themselves.

   A trademark owner must be involved in producing the item or providing the service that bears the mark. (9) A certification mark owner, in contrast, must remain independent and may not produce any of the goods or services to which the mark applies. (10) Owners of certification marks cannot use the mark on any product that they manufacture. Only licensees are allowed to use the mark. The owner's job is to certify that the licensees conform to requirements of the license so that the public can trust the quality or integrity of the product and its manufacturer. The owner of the mark is prohibited by law from practicing a self-produced mark, because self-certification is inherently self-interested.

   Certification marks account for a small percentage of intellectual property. Owners of certification marks are held to high standards of conduct: decisions about whether to certify a product or service must be based exclusively upon the criteria the owner has set for the mark. In other words, certification cannot be based on a user's willingness to pay a fee to the owner of the mark (other than a minimal fee covering administrative costs). In effect, the certifying entity must operate as a nonprofit.

   Seen in this light, the Fair Employment mark is a simple and traditional idea innovatively applied in a new context. Commerce in the United States has nurtured a venerable tradition of labeling products to improve work conditions for groups of oppressed people. Trade union labels first came into circulation as a way of promoting shorter work days. In 1869, the Carpenter's Eight-Hour League of San Francisco created a stamp that permitted lumber mills to signal that they ran on an eight-hour schedule rather than a ten-hour schedule. (11) This was typical of most union labels that followed, which were generally used to promote better working conditions and to guard against the use of tenement-house, sweatshop, and prison labor. (12) By the turn of the century, union labels were used by groups in many industries. (13)

   Although some early labeling schemes attempted to promote the quality or healthfulness of the product, the union label stood primarily for "better pay and improved work conditions." (14) For example, even before Congress enacted legislation outlawing child labor, private organizations devised and administered...