(Bloomberg Opinion) -- Ronald S. Lauder, the younger of Estee Lauder’s two sons, has been working for his late mother’s eponymous company since 1964. At 76, he’s still there — presiding over the Clinique brand and serving as a director. He owns around 7% of the stock, most of which are Class B shares that give him and his family 87% of the voting power. He has also been an official in the Defense Department, the ambassador to Austria, the president of the World Jewish Congress, and a leading art collector and philanthropist.
And one other thing: Lauder is a Republican. More than that, he’s a Donald Trump Republican, having poured $1.6 million into “pro-Trump organizations” since 2016, according to Bloomberg News. Last week, amid the swirl of protests after the death of George Floyd in police custody in Minneapolis, something took place at Estee Lauder Cos. that was both astonishing and troubling: About 100 employees sent a letter to the chairman, William Lauder, who is also Ronald Lauder’s nephew. They demanded that his uncle be removed from the board.
“Ronald Lauder’s involvement with the Estee Lauder Companies is damaging to our corporate values, our relationship with the Black community, our relationship with this company’s Black employees, and this company’s legacy,” the letter said.
The company responded with a vow to donate $1 million to advocate for “social, economic and racial justice,” and a promise to “speed up a review of its policies with a commitment to tackle racial justice.” As part of its statement, it also rejected Ronald Lauder’s politics:
This week, several employees asked whether a single member of the Lauder family and our board, represents the views of our company. The answer is no.
Not good enough, the employees replied. They came back with a demand that Estee Lauder commit $5 million instead of $1 million. They also sent around a petition that read, in part, “This [$1 million] total does not match, or exceed Ronald Lauder’s personal donations in support of state-sanctioned violence.” So far, 5,000 employees have signed the petition.
To judge by the statistics Estee Lauder has posted on social media, its record of hiring and promoting black employees is better than most. (The company says that 12% of its employees and 14% of its executive officers are black, and that 19% of its directors are people of color.) But none of this matters to the employees who are objecting to Ronald Lauder. He is a Trump supporter, and that’s enough in their view: He has to go.
This notion of employee revolt has been a recent development. Sure, there have been strikes, but that’s different from employees rising up against their employers for political or social reasons rather than financial ones. The push for companies to tackle climate change has come largely from outside groups, not employees. And when board members are pressured to resign, it’s usually because of poor performance, not politics, with shareholder activists leading the charge. Employees wouldn’t dare, at least not before now.
So why now? There are two reasons, I think, one obvious and one not so obvious. The obvious one is that the U.S. has a president who says and does things that are simply beyond the pale — things that no one could ever imagine a previous president saying or doing: separating immigrant children from their parents; stating that the white supremacists who marched in Charlottesville were “very fine people”; and, most recently, having the police forcibly remove peaceful protesters so he could stage a photo op holding a Bible outside St. John’s Church in Washington. The list is long, and he adds to it almost every day.
Many employees, especially younger ones, are repulsed at the idea that their company might be aiding and abetting this awful man. And they’re not willing to look the other way. Remember how, just weeks after Trump was inaugurated, an internal revolt at Uber forced Travis Kalanick, the chief executive at the time, to quit a Trump economic advisory council?
It’s happened again and again. David Remnick, the editor of the New Yorker, had to disinvite Trump’s former chief strategist, Steve Bannon, from the New Yorker Festival after a huge outcry from readers, other invited speakers — and the magazine’s staff. Facebook parted ways with a top executive, Palmer Luckey, because his support of Trump “sparked a backlash among his colleagues,” as the Wall Street Journal put it. (Facebook has denied any connection.) Trump supporter Robert Mercer stepped down from his position as co-chief executive officer of Renaissance Technologies, the quant hedge fund founded by James Simons, because of internal dissent.
The not-so-obvious reason has to do with the culture of millennials, who make up a large proportion of these new employee activists. Charlotte Alter, the author of “The Ones We’ve Been Waiting For,” a recent book about millennials, points out that her generation has spent most of their careers in the gig economy:
They are less likely to have the protection of unions … less likely to have a set nine-to-five schedule … and less likely to stay at one company for long enough to build a track record of good work.
In other words, if their activism costs them their job, they’ll shrug and move on.
Alter also has an interesting theory about how millennials developed their values. Boomer parents, she says, were overprotective, which in turn caused schools to become overprotective — “imposing predetermined draconian punishments on even minor childhood misbehavior, such as pushing other kids on the playground or calling names.” She adds:
Millennials were raised in a system where even a little misbehavior could get you suspended, expelled, or even imprisoned. Is it any surprise that these kids grew up to impose strict social codes on each other and themselves? The kids who grew up under zero tolerance policies for playground name-calling are the same ones who now “cancel” each other for bad jokes.
She concludes, “There is a direct line between zero tolerance school behavior policies and the sometimes merciless nature of millennial morality, in which anyone who violates the social code risks total ostracism for even a minor misstep.”
Like, for instance, Ronald Lauder.
There is no question that the pressure placed on Estee Lauder by its employees has had a positive effect. On Wednesday, in their latest effort to defuse the situation, William Lauder and CEO Fabrizio Freda sent a memo to the staff. It included a long list of promises, among them a vow to donate $10 million to the NAACP and other groups and to focus on diversity at every level of the company. What they did not do was promise to remove Ronald Lauder from the board.
Nor should they — not only because he is a highly competent member of the founding family but also because everyone should be entitled to their own politics without fear of retribution.
What Estee Lauder needs to do now is say, unapologetically, that Ronald Lauder will remain on the board. If some employees quit as a result, so be it. But just as young employees across the country have helped raise important issues and highlighted important values, there is one value that companies need to defend: tolerance for people who don’t think the way they do.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Joe Nocera is a Bloomberg Opinion columnist covering business. He has written business columns for Esquire, GQ and the New York Times, and is the former editorial director of Fortune. His latest project is the Bloomberg-Wondery podcast "The Shrink Next Door."
For more articles like this, please visit us at bloomberg.com/opinion
Subscribe now to stay ahead with the most trusted business news source.
©2020 Bloomberg L.P.