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Texas abortion law shows limit of company advocacy

A pro-life demonstrator stands outside of the U.S. Supreme Court as justices hear a major abortion case on the legality of a Republican-backed Louisiana law that imposes restrictions on abortion doctors, on Capitol Hill in Washington, U.S., March 4, 2020. REUTERS/Tom Brenner

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NEW YORK, Sept 9 (Reuters Breakingviews) – Match (MTCH.O) Chief Executive Shar Dubey doesn’t much like Texas right now. The state that’s home to her $44 billion online dating firm, which also owns Tinder and other apps, enacted a near-total ban on abortion last week. She is starting a fund to help pay for employees who need one, as is dating-app rival Bumble (BMBL.O), also based in Texas. But financial realities make it hard for her company, or others, to go much further.

While some company bosses keep out of anything political, others have championed social issues. For example, Delta Air Lines (DAL.N) and Coca-Cola (KO.N) took on state legislation they perceived as restricting access to voting, Netflix (NFLX.O) put a spotlight on the Black Lives Matter movement, and the National Basketball Association fought a North Carolina bill restricting transgender people’s toilet access.

The Texas law allows private citizens to sue others who aid abortions. That could make Dubey’s fund idea legally risky for those involved. It’s unclear how employees could be sure of anonymity. The costs could also add up, especially if health insurance is precluded from helping. It’s something, but Dubey and Whitney Wolfe Herd, her counterpart at Bumble, could send a stronger message to Texas by relocating their companies.

That, though, is where reality kicks in. Board members would have to consider the financial costs. Texas is one of just six states that don’t charge corporate income tax. Others take over 10% of a company’s profit on top of the federal levy. Because of such incentives, more large firms are domiciled in Texas than in any state except New York, including Exxon Mobil (XOM.N) and American Airlines (AAL.O).

Match or any other company would also face one-off expenses relocating and recruiting new staff – not to mention the impact on those who don’t want to move and would lose their jobs as a result. U.S. companies need shareholders on side to make costly moves. The U.S. investing community has started to coalesce on issues like climate change and diversity, in part because business arguments can be made. But abortion access remains a divisive social topic across the country.

Dubey, Wolfe Herd and others have their bully pulpits and can offer financial help. But anyone hoping for corporate action that might really hurt in Texas is likely to be disappointed.

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CONTEXT NEWS

– A Texas law imposing a near-total ban on abortion went into effect early Sept. 2 after the U.S. Supreme Court, in a 5-4 vote, denied an emergency request by abortion and women’s healthcare providers for an injunction on enforcement of the ban. The law makes abortions illegal once the rhythmic contracting of fetal cardiac tissue can be detected, often at six weeks.

– In effect the law hands over power of enforcement to private citizens, by offering them cash payments to turn in people who are receiving abortions or aiding in the procedure. The ban prohibits abortion at a point when many women do not even realize they are pregnant. The law could still be blocked at some other stage.

– On Sept. 1, Texas-based Match Chief Executive Shar Dubey said in a statement that she was setting up a fund to help employees pay for abortions. The same day the dating app’s competitor Bumble, also based in the Lone Star State, said in a Twitter post that the company had created a “relief fund supporting the reproductive rights of women and people across the gender spectrum who seek abortions in Texas.”

Editing by Richard Beales and Marjorie Backman

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