The brands taking a stand on Indiana’s controversial religious freedom law

Indiana’s Religious Freedom Restoration Act has plenty of critics that say will let businesses discriminate against gay people. Count some brands among the critics.

First out of the gate was Salesforce, which announced publicly last week, via CEO Marc Benioff’s Twitter account, that it would no longer send any customers or employees to Indiana for work. The $4 billion company acquired Indianapolis-based marketing software company ExactTarget last year for $2.5 billion. Angie’s List, another Indianapolis-based company, also announced that it would curb a $40 million expansion of its headquarters, an expansion that would have added a thousand new jobs. The NCAA, which is also based in Indianapolis, is also caught up in the storm. It’s the week before the Final Four comes to the city, and league president Mark Emmert has indicated that the law could lead to “significant” changes in the company’s relationship with the state.

And there are others. Gen Con, one of the world’s bigger gaming conventions, announced it would reconsider holding its event in Indianapolis, saying the law would negatively impact the state’s economy.

Subaru and Chrysler also spoke out, Chrysler saying it would not require employees to travel to Indiana to “face possible discrimination.” Gap CEO Art Peck and Levi Strauss CEO Chip Bergh together urged retailers and other business to “speak out against legalized discrimination.”

Beyond moral impulses, these moves make smart business sense. Research by Interbrand has shown that companies that tend to fall on the right side of history when it comes to issues like gay rights and discrimination often rank higher on perception scores than those that choose not to take a stand at all.

“No national or even regional brand wants to alienate younger adults, millennials and Gen X-ers,” said Lionel Knight, senior vp planning and research at Upshot, an agency. “And those generations are overwhelmingly supportive of diversity and gay rights. Whatever the Indiana state government says about their good intentions, the firestorm… means that any brand that does not speak out against it, will be in danger of being portrayed as anti-LGBT, and so out of step with the tide of public opinion.”

Kelly Rice, owner of ad agency Tree Frog Marketing in Lafayette, Indiana, is already somewhat feeling the effects.

“This morning, we were asked by a potential client if we would discriminate against working with their company because we were a Christian-based company,” she emailed Digiday. “Our agency’s mission is simple, we help people. Judgment over a person’s partner choice, color of skin or mobility, has no place in our organization. That’s not our job.” She added that the bill will not change what they do as an agency, but it has already clearly changed the conversation.

Paul Knapp, CEO of Indianapolis ad agency Young & Laramore, said that companies like his are concerned about recruiting and retaining talent, and a law like the RFRA makes it tough to attract smart people to Indiana.

“Any ad agency or any business, including software, is built on people,” Knapp said. “We recruit on a national basis. And it’s already a challenge for us to recruit people to the Midwest.” Y&L has joined a coalition of businesses and other organizations to oppose the RFRA in a movement called “Freedom Indiana.”

The movement is also starting to coalesce around a hashtag. #WeAreIndiana started trending on Twitter Monday after the Indianapolis Star used the hashtag in an editorial slamming the RFRA  — and again on Tuesday morning on its front page, headlined, “Fix This Now.” Analysis by Networked Insights using the Kairos platform found that the hashtag has been gaining steam, with a volume increase of 48 percent over the weekend. Salesforce has the highest share of mentions about the RFRA.

The Indiana brand is also suffering. “The biggest impact on Indiana will be to confirm the pervasive ‘bi-coastal’ stereotype that dominates most of the national media — the idea that in general, smart, sensible people live on the coasts and that the ‘fly-over’ states are backward and devoid of intelligent thought,” Knight said. “This new law and the resulting news coverage feeds the stereotype that Indiana — and arguably the whole Midwest — is out of touch and backward.”

Knapp put it much more simply: “Something like this moves us from a blank State to a negative State.”

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