Effect of June 26, 2015 Supreme Court same-sex marriage decision on employment practices
By Ruth Binger, Danna McKitrick P.C.
The U.S. Supreme Court held in Obergefell v. Hodges that there is a constitutional right to marry and that the 14th Amendment’s Due Process and Equal Protection clauses require states to allow same-sex marriages and to recognize same-sex marriages lawfully performed in other states.
The Obergefell decision is not an employment decision. However, the Equal Protection language in the opinion will require companies to make some changes to their employment practices, training, manuals, forms, beneficiary designations, and other personnel policies going forward.
Obergefell followed the Supreme Court’s decision in United States v. Windsor which held that the federal government’s interpretation of “marriage” and “spouse” must apply to both opposite sex and same-sex unions. Windsor made employee benefits like Family Medical and Leave Act (“FMLA”), COBRA, and the Employee Retirement Income Security Act (“ERISA”) available to all same-sex spouses of federal employees.
What Does Obergefell Mean To Employers?
Fully Insured Health and Welfare Plans. Companies may want to be ahead of the issue and issue amendment forms to employees so that they can declare a spouse that might be impacted within a set period of time.
Benefits for Domestic Partners/Unmarried Same Sex Partners. Companies may want to think about no longer offering benefits to unmarried same-sex partners, since same-sex individuals now have marriage rights in every state.
Employment Handbooks and Company Policies Update. Companies should update their handbooks and personnel policies to reflect and extend the rights given to opposite-sex spouses to same-sex spouses to minimize litigation risks (i.e., bereavement, non-FMLA medical).
Tax Qualified Retirement Plans and Code Section 125 Benefits. No changes are needed to these Plans since Windsor already required that those plans recognize same-sex partners.
Internal Revenue Service. The IRS issued guidance relating to the definition of “spouse” and “marriage” for the purposes of federal tax laws. The IRS adopted the state of celebration rule, recognizing any marriage of same-sex individuals validly entered into in a state or jurisdiction whose laws authorize the marriage, regardless of whether the married couple is domiciled in a state that recognizes the same-sex marriage. There will no longer be imputed income for state tax purposes with respect to employer provided health coverage for same-sex spouses; allowing for consistent administration in all states in which employer operates.
Department of Labor. The DOL issued guidance similar to the IRS relating to the definition of spouse under ERISA and the FMLA. In March 2015, the DOL modified its definition of “spouse” such that employers must grant all eligible employees the same benefits under the FMLA. This includes, FMLA leave to care for same-sex spouse, adoption by same-sex adoptive parent, and same-sex parents standing in loco parentis to children.
Title VII of the Civil Rights Act of 1964. Title VII does not prohibit discrimination based on sexual orientation or gender/identity/expression. However, Courts are adopting the Equal Employment Opportunity Commission’s (“EEOC”) position that gender identity claims are sex discrimination based on sex stereotyping. Sex stereotyping is discrimination against an employee for failing to adhere to gender stereotypes on how a male and female should dress, behave, etc. at work. Sex or gender stereotyping of lesbian, gay, bisexual, or transgender (“LGBT”) individuals may create claims to gender discrimination/harassment claims under Title VII. For example, in EEOC v. R.G. and G. R. Harris Funeral Home, the U.S. District Court of Michigan, Southern Division, refused to dismiss a case brought by Aimee Stephens, a transgender woman. As a result of her transition from a man to a woman, Stephens was terminated because what she was “proposing to do” was unacceptable to her employer. The court’s refusal to dismiss was based on the EEOC’s allegation of sex-based unlawful conduct: Stephens was terminated because she failed to conform to the employer’s sex- or gender-based preferences, expectations, or stereotypes. A similar case was brought by the EEOC against a Florida eye clinic and the clinic settled for $150,000. The clinic agreed to adopt and implement a gender and transgender discrimination policy and to create training for its manager and employees.
About 21 states (excluding Missouri) and 191 local jurisdictions (Columbia and St. Louis City in Missouri) expressly prohibit discrimination on the basis of sexual orientation or gender identity.
In summary, companies should train management and update policies, plan documents, forms and beneficiary documents as necessary to comply with Obergefell.