Attention, Startups: Move to New England. Your Gay Employees Will Thank You.

11/14/08Follow @wroush

If you’re trying to decide where to build your new tech startup, California obviously has a lot of attractions. You’ll be close to the heart of the venture capital community. Non-compete agreements, which are said to slow innovation in states like Massachusetts, are illegal in the Golden State. The weather is beautiful year-round. And let’s face it, it’s where all the cool kids live.

But now there’s a reason to rethink going to California. If you do, you’ll be sending your employees to a state where a majority of the voting population says gay people aren’t entitled to equal rights under the law.

On Election Day, 52 percent of California voters approved a ballot measure called Proposition 8, which adds a single line to the state’s constitution: “Only marriage between a man and a woman is valid or recognized in California.” The proposition overturns a State Supreme Court decision this May that gave gay and lesbian couples full rights to marry. As far as I know, it’s the first time a group of citizens has fought for and won the right to marry, only to have that right taken away.

So, despite the fact that some 18,000 gay and lesbian couples have married in California since June without incident, residents have decided that only heterosexual couples are entitled to have their unions recognized and protected by the state. That means Massachusetts—and, as of this week, Connecticut—are now the only two U.S. states where gay people have full marriage rights, forming the country’s strongest bastion against one of the last acceptable prejudices, homophobia.

I am gay. It hasn’t come up here before, but it’s no secret. For almost 10 years, California was my adopted home state—but boy, am I happy that I came back to Boston last year to work for Xconomy. It makes a huge difference to live in a place where I feel welcomed—to know that if I had a life partner, all of the public and private benefits of marriage (except those still denied under Federal law) would be available to us automatically, just as they are to straight couples. This, after all, is the place where the state’s highest court, in the 2003 decision that legalized gay marriage, declared that “without the right to marry…one is excluded from the full range of human experience” and that the state constitution “forbids the creation of second-class citizens.”

Provincetown, MassachusettsIt’s time for Massachusetts and Connecticut to turn that recognition into a marketing advantage. As we reported a few days before the election, a group of 22 biotech executives in San Diego teamed up to urge their regional trade-industry group, Biocom, to oppose Proposition 8 as a drag on recruiting. “The governor of Massachusetts has made it very clear that he recognizes this is a competitive and lucrative industry and he’d do everything he can to attract companies,” Laurent Fischer, CEO of Ocera Therapeutics, told the San Diego Union-Tribune. “And this is a sure opportunity for Massachusetts to feature its benefits that are not available in California should Proposition 8 pass.”

Fischer was absolutely right. And now the ball is in New England’s court. The Commonwealth of Massachusetts’ Office of Business Development, which does a great job of pitching the benefits of locating in the state, should stress the state’s gay-friendly credentials to technology and life sciences companies in its brochures and PowerPoints, and maybe even take out a few ads in places like the Los Angeles Times and the San Francisco Chronicle. Governor Deval Patrick—whose 18-year-old daughter came out as gay this summer—should go on a trade mission to California and see if he can lure a few progressive companies away from places like San Francisco and Silicon Valley. And Boston’s venture capital firms and angel investors should lean on their portfolio companies to pick a home state where all of their employees will be treated equally.

Now, one can make the argument that if technology companies left or avoided California and the other states that discriminate on the basis of sexual orientation, it would simply drain those states of the liberal voters who will eventually be needed to help reverse measures like Proposition 8. But all I’m saying is that company founders who have a choice of locations—and this includes most of the young entrepreneurs coming out of incubators like Y Combinator or DreamIt Ventures—should think about what kind of environment they want to provide for their employees. If they want to send a message of inclusion and equality, they should either set up shop in Massachusetts or Connecticut, or join the legal and political battles to overturn same-sex marriage prohibitions in the states where they do locate.

What makes the passage of Proposition 8 and similar gay-marriage bans in Arizona and Florida all the more mystifying, of course, is that it came on the same day that Americans turned the corner on centuries of racial prejudice by electing an African-American as President.

Like many others around the world, I’m inspired by Barack Obama’s historic victory. But inspiration aside, it’s hard for me to understand how Obama himself can be in favor of separate-but-supposedly-equal civil unions for gay people, as opposed to full marriage rights. Obama came out against Proposition 8, but he did little to campaign against it. What particularly puzzles me is how someone whose own parents would not have been allowed to marry under the anti-miscegenation laws still in force in many states in the 1960s can take the position Obama has; I can only surmise that it’s an act of political pragmatism.

Eventually, I have no doubt, Americans from the White House on down will stop differentiating between civil rights for racial minorities and civil rights for gay people. Meanwhile, Californians and people in the 28 other states with constitutional gay-marriage bans need to learn that there’s a price for their prejudice. Progressive entrepreneurs and investors should vote with their feet and their dollars—and send their startups to Massachusetts and Connecticut.

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Wade Roush is a contributing editor at Xconomy. Follow @wroush

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  • Laurent Fischer

    Dear Wade,

    Thank you for your article.

    Separate but equal is not acceptable in California or anywhere else for that matter and our hope is that the Supreme Court who stated in its May opinion that “the statutes in question properly must be understood as classifying or discriminating on the basis of sexual orientation, a characteristic that we conclude represents — like gender, race, and
    religion — a constitutionally suspect basis upon which to impose differential
    treatment” will protect gays and lesbians and declare proposition 8 void (as it allows a simple majority to oppress a protected minority class).

    We hope that civil rights and Gay and Lesbians recognition of equal rights, in addition to the climate, beaches, outstanding financial and research institutions, will make California once again the forward looking, progressive place we all used to be so proud of.

    In the meantime, entrepreneurs should look at Massachusetts and Connecticut to start up new companies and attract the best and the brightest!

    Sincerely,

    Laurent Fischer, MD

  • Susan

    Did the people of Connecticut and Massachusetts vote on the issue? Don’t forget, the California Supreme Court ruled gay marriages legal, but here we have an initiative process which allows almost anything to be put to a popular vote.

    So before you demonize California as homophobic, based on 52% of the vote, just remember that the voters of CT and MASS might have voted the same way.

    That being said, I believe that Prop 8 will be the catalyst for a new civil rights movement. Everything starts in California.

  • http://www.luckycal.com Sanjay Vakil

    Your argument could be made even stronger based on the research of Richard Florida and his “Creative Class” hypothesis.