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Employment discrimination against lesbian, gay, bisexual, and transgender (LGBT) individuals remains a persistent problem not addressed by federal and most state equal employment opportunity laws in the United States. Despite this lack of regulation, a growing number of organizations are voluntarily adding sexual orientation and gender identity to their nondiscrimination statements, providing domestic partner benefits, sponsoring affinity groups, and establishing other “LGBT-friendly” policies. This article incorporates institutional theory and organizational demography to explore the antecedents to these policies to understand why some organizations seek to be at the forefront of this trend while others do only the minimum to embrace this element of diversity. The analysis of a sample of Fortune 1000 firms reveals that state law dealing with gay rights in non-employment-related areas for the state where each company is headquartered, the number of women serving on each firm's board of directors, and whether other companies in the same industry have adopted progressive policies are all related to company policy toward its LGBT employees. Sexual orientation of employees by industry does not seem to influence company policy
