14% of Cracker Barrel Investors Back First Shareholders Resolution for Gay Rights

Acting on what is believed to be the first gay rights shareholder resolution, Cracker Barrel shareholders on Tuesday defeated a measure that would have created an anti-discrimination policy at the folksy family restaurant chain, accused by critics of refusing to hire gays.

Cracker Barrel Old Country Store Inc. admitted that its 163 restaurants would hire only heterosexuals two years ago, but subsequently rescinded that rule. Gay activists and others say the rule still exists.

The New York City Retirement System, one of the nation’s biggest institutional shareholders, proposed the anti-discrimination policy at a closed-door shareholders meeting at the company’s training center east of Nashville.

The proposal drew 14% of the stockholders’ votes, which under securities rules will allow the issue to be raised again next year.

“It’s a big victory for us,” said Sue Ellen Dodell, deputy counsel for the city of New York comptroller. “I was pleasantly surprised because I had counted only 4% to 5% with us. It shows that a lot of individual shareholders are with us.”

Cracker Barrel operates country-motif restaurants with adjoining gift shops in 20 states, mostly in the South and Midwest.

Eleven Cracker Barrel workers were dismissed at the time the 1991 policy on hiring heterosexuals became public. It remains unclear whether the firings were related to the policy, and the workers were never rehired.

Tuesday’s vote was 77% against the anti-discrimination proposal and 14% for it; 9% abstained.

A second policy change, to expand the board of directors to “reflect the varied races, genders and sexual orientations of shareholders,” was defeated by 87% of the vote.

Despite the company’s disavowal of the anti-gay hiring policy, gay groups say the policy is intact and enforced.

Not so, Cracker Barrel Chairman Dan Evins said in a statement.

“During the past three years, there has been a significant amount of misinformation and misperception regarding the company’s hiring policies and practices.

“Once again, I will state for the record that Cracker Barrel Old

Country Store is an equal-opportunity employer that adheres to the letter and the spirit of the law regarding equal treatment in the workplace.

Securities and Exchange Commission rules allow shareholder proposals to be considered at the next annual meeting if the proposals generate at least 3% of the vote.

Adjusted for stock splits, Cracker Barrel’s stock has nearly tripled in value since the anti-gay flap. It closed Tuesday at $27 a share, down 12.5 cents, on the Nasdaq.