Countervailing Claims: Pro-Diversity Responses to Stigma by Association Following the Unite the Right Rally

Abstract

Why do firms take positions on divisive social issues? In this article, I draw on theories of stigma by association to explain why firms’ mere proximity to controversial political actors may lead stakeholders to presume that firms silent on social issues are misaligned with the stakeholders’ sociopolitical preferences. Firms, in turn, countervail these presumptions of misalignment by eschewing silence and claiming sociopolitical positions. Substantiating this theory in the context of employee recruitment following the 2017 Unite the Right White supremacist rally in Charlottesville, Virginia, I show that Charlottesville’s employers combated presumptions that they shared demonstrators’ anti-diversity positions by making countervailing pro-diversity claims in their online job postings. In supplementary analysis, I show that the rally was associated with a newfound wage premium in job postings by Charlottesville’s employers but that this premium was lower when employers made pro-diversity claims. This study advances understanding of strategic sociopolitical positioning whereby firms make calculated appeals to stakeholders. It contrasts with related research showing that firms use social claims to combat negative evaluations resulting from their own actions or to differentiate from competitors. In doing so, it suggests opportunities for further research investigating, for example, additional motivations for firms’ sociopolitical positioning, how positioning might evolve in the context of growing political polarization, and how positioning might relate to workplace inequality and diversity.