A few years ago, representatives from American Express Financial Advisors in Minneapolis celebrated Gay Pride Day in the Twin Cities by staffing a single, discreet booth.

"We could not be visible, in the sense of wearing American Express t-shirts that we could then wear and walk through the park," recalled Sandra Johnson, a diversity consultant for the company. "There was a concern that we as a company were not quite ready to be in that place."

This year, said Johnson, the company was one of the foremost sponsors of the annual event, claiming the number two slot in the Gay Pride parade for its participants, who proudly marched with the American Express logo on their t-shirts.

In this area of intense competition for skilled employees, some American businesses are coming out–in favor of a friendlier workplace for gay, lesbian and transgendered employees.

Spurred by a tight labor market and the desire to recruit and keep skilled employees, and drawn to an estimated $350 billion gay and lesbian consumer market, businesses are adding sexual orientation clauses to their anti-discrimination policies and offering domestic partner benefits, such as basic medical and dental care, to the non-marital partners of employees.

Today, more than half of Fortune 500 corporations ban discrimination on the basis of sexual orientation, and more than 3,500 U.S. companies now offer domestic partner benefits, according to the Human Rights Campaign, a Washington-based advocacy group for gay and lesbian rights.

Liz Winfeld, a workplace consultant on sexual orientation issues, said at a recent conference on work-family issues that there has been a "sea change" in American attitudes toward people with alternative sexual orientations. Citing a 2000 Newsweek poll, she said that 83 percent of Americans believe that gay and lesbian people should be given equal rights in employment, an increase from 56 percent in 1977.

With all this newfound good will, gays in the workplace should have little to worry about, right? Wrong, said Winfeld.

Despite the best of intentions, many companies have failed to create a safe working environment for their gay employees, she explained. Employees who have come out have suffered in terms of promotions, raises and social isolation. In the face of these realities, she said, 40 percent of non-heterosexual workers struggle to hide their orientation, to the detriment of both their relationships with co-workers and their job performance.

Companies are beginning to realize that creating a comfortable environment for gay and transgendered employees takes more than the one-day seminars Winfeld was asked to give in the early 1990s. "I used to call it ‘Gay Day,’" she laughed.

Now, many businesses are embarking on sustained education and training efforts. American Express Financial Services in Minneapolis, for instance, offers an ongoing educational program called "Safe Place" that promotes understanding of alternative sexual orientations. It aims to dispel some of the myths about non-heterosexuals, such as the beliefs that they are more promiscuous, less religious and less moral than heterosexuals.

Participants are urged not to tolerate anti-gay jokes in the workplace and to avoid assuming, in language or in action, that all people are heterosexual, said Johnson from American Express. Upon completion of the program, an employee may, if he or she wishes, place a small placard with the Safe Place logo on their desks, signaling acceptance and support for persons with alternative sexual orientations.

Winfeld advises companies to adopt inclusive language, remembering, for instance, to invite partners as well as spouses to company picnics, and to use the term "sexual orientation" rather than the term "sexual preference." The first refers to innate characteristic while the later refers to sexual behavior.

The new attitude of American businesses toward its gay, lesbian and transgendered employees may be heartening, but Winfeld warns that on the federal level there are no constitutional or legislative guarantees of equal rights for non-heterosexuals. Only 11 states have passed legislation guaranteeing full employment rights to gay and lesbian workers. In the absence of voluntary employer non-discrimination policies, she said, most non-heterosexual employees are working "without a safety net."

One organization has already rescinded these protections. After the merger between Exxon and Mobil last December, the new corporation, Exxon Mobil, discontinued Mobil’s non-discrimination policies regarding sexual orientation as well as domestic partner benefits for new U.S.-based employees, said Kim Mills, education director for the Human Rights Campaign. Mills underscored the importance of pushing for the passage of the Employment Non-Discrimination Act, now before Congress, which would outlaw discrimination on the basis of sexual orientation.

Kristin Choo is a free-lance writer based in New York.