business news in context, analysis with attitude

by Kevin Coupe

The ruling by the US Supreme Court last week to overturn Roe v. Wade and end the federal constitutional right to abortion has the potential of creating enormous pressure on US businesses who may be expected by their employees to take a stand.  It is, to be sure, yet another case in which business leaders are being forced by circumstances to take positions and create policies that could threaten their companies.  And yet, reticence is not an option.

The New York Times wrote that the decision "sent business leaders and employees across the nation scrambling for answers about how to react, what to say — or what not to say — and the immediate practical implications of the ruling.

"For U.S. businesses, there are pressing issues that demand fast answers, starting with: What will this mean for employees’ health care coverage?  'I guarantee you that there are teams of lawyers trying to figure this out right now,' said Tom Baker, an insurance law expert at the University of Pennsylvania’s law school.

"Businesses have already been battered in political and social fights in recent years and are reeling from competing demands from stakeholders — including activists, clients, consumers, shareholders and elected officials — about how to respond to the country’s bruising culture wars.

"Some executives are already starting to focus on the potential for other shoes to drop: Justice Clarence Thomas’s concurring opinion raised questions about what other rights could soon disappear. The rationale that the Supreme Court used to declare that there is no right to abortion, he argued, should also be used to overturn cases establishing rights to contraception, consensual same-sex relations and same-sex marriage.

"Local officials in states that restrict abortion are already threatening to punish businesses that help employees gain access to it elsewhere; activists who support abortion rights are calling on businesses to cut campaign donations to officials who oppose abortion."

From the Wall Street Journal:

"Thorny benefits issues pose a fresh challenge for many companies already struggling to navigate divisive social and political issues.

"Companies that choose to cover abortion - and any travel necessary to get one - have to balance alienating employees agitating for their employers to take a stand versus the risk of legal attacks or political blowback in states that have banned the procedure.

"'Benefits are suddenly starting to become very political, and it’s forcing employers to take a position,' said Michael Turpin, executive vice president at USI Holdings Corp., an insurance brokerage."

A number of companies, some of them without specifically taking a stand on the propriety of the Supreme Court ruling, have said that they will cover travel expenses for employees who need to avail themselves of reproductive health services.  They include Starbucks, Tesla, Yelp, Airbnb, Netflix, Patagonia, DoorDash, JPMorgan Chase, Levi Strauss & Company, PayPal, Reddit, Goldman Sachs, Disney, Meta, Dick’s Sporting Goods and Condé Nast.

This is just a small sampling, however, of the companies likely to be affected by the ruling.  Numerous stories over the weekend pointed out that companies may well be asked or forced to allow employees to relocate based on the policies of the states in which they are based.

The Journal writes:

"As it became clear that the Supreme Court would overturn Roe, many other businesses have been working quietly behind the scenes to have a response ready to roll out when the court acted, according to benefits consultants.

"Some 14% of large employers surveyed beginning in early June said they had a travel benefit in place, while another 25% said they were considering it, according to responses from nearly 300 employers to a survey being conducted by benefits consultant Mercer LLC.

"Employers with at least 20,000 workers were the most likely to provide a travel and lodging benefit for employees traveling to receive an abortion, the survey said.

"Major insurers that administer health benefits for big employers, including UnitedHealth Group Inc.’s UnitedHealthcare, Cigna Corp. and CVS Health Corp.’s Aetna, had been confirming to self-insured clients they can likely facilitate travel offerings, benefits consultants say.

"Cigna and CVS said they are looking to support the coverage needs of their clients and customers. UnitedHealth Group said it remains committed to helping members and patients get access to their benefits and services."

Again, from the Times:

"Some business leaders said they were concerned about how abortion restrictions will affect their ability to recruit workers, especially those whose companies are based in the 13 states that will ban abortion immediately or very quickly with Roe overturned. Those states include Texas, where tech companies have flocked in recent years.

"Research commissioned by the Tara Health Foundation found that two-thirds of college-educated workers surveyed would be discouraged from taking a job in Texas because of its restrictive abortion law and would not apply for jobs in other states that passed similar laws."

The Times also notes that "a 2020 working paper published in the National Bureau of Economic Research comparing economic outcomes for women who were able to access abortions with those who weren’t, found those without access experienced 'a large increase in financial distress that is sustained for several years.' It also concluded that women who were denied abortions had substantially more public records, which include events like eviction and bankruptcies.

"For companies that don’t want to weigh in on political or social issues, Sarah Miller, an assistant professor at the Ross School of Business at the University of Michigan and a lead author of the paper, said being reticent could impact their labor cost since 'at some point in the pandemic, women crossed the 50 percent threshold for the work force'."

However companies respond, and whatever they say, "employers will likely be careful in how they communicate about their plans, and how they design any new travel benefit," the Journal points out.  "They will have to navigate various wrinkles, including that a generous travel benefit might result in taxable income for patients.

"Also, to avoid estranging anyone, companies may structure the benefit to be broader than abortion, benefits experts said … Companies that say they are committed to providing such benefits say the legal complexities of ensuring coverage are fraught.

"Yet covering abortion for employees who live in states where it is banned, and particularly facilitating access with services like travel, could create legal jeopardy for employers and the insurers that administer their health plans—and even potentially for individual employees, corporate officers or directors, legal experts said."

The extent of the concerns are made clear in an Associated Press story about how "four Democratic lawmakers are asking federal regulators to investigate Apple and Google for allegedly deceiving millions of mobile phone users by enabling the collection and sale of their personal data to third parties.

"The decision Friday by the court’s conservative majority to overturn Roe v. Wade is expected to lead to abortion bans in about half the states. Privacy experts say that could make women vulnerable because their personal data could be used to surveil pregnancies and shared with police or sold to vigilantes. Online searches, period apps, fitness trackers and advice helplines could become rich data sources for such surveillance efforts."

One Eye-Opening fact seems clear.  The tumult that envelopes the nation's political, cultural and social debate seems likely to have an ever-increasing impact on the nation's businesses, and retailers will not be immune.  They have to start fashioning internal and external policies and responses now, and so so with the full knowledge that they are almost certainly going to make someone unhappy.

But reticence - and denial - are not legitimate, viable options.