Sunday, October 13, 2024

Employment Law Implications of Obergefell

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On Jun. 26, 2015, the United States Supreme Court issued the Obergefell v. Hodges decision, which is a historical ruling holding that the right to marry is a fundamental right guaranteed to same-sex couples. Although most states already guaranteed same-sex couples the right to marry, Obergefell extended that right nationwide. The Obergefell decision is a good time for all employers to ensure they have made the necessary adjustments to their policies given the significant changes to laws affecting LGBT employees and same-sex couples over the past 10 years.

The basic holding of Obergefell is that the right to marry is granted to all couples regardless of gender. Prior to the decision, employers with locations in different states were subject to different obligations, but now have uniformity across all locations as it relates to policies affecting an employee’s spouse. The Obergefell decision is the latest in what has been a series of changes granting additional rights or protections to LGBT individuals.

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The most significant takeaway from the Obergefell decision for employers is that any benefits previously granted to an opposite sex spouse must also be granted to a same sex spouse. This may seem fairly obvious, but it touches on many different areas of employee benefits. This includes leave to care for a same-sex spouse under the Family Medical Leave Act or an employee designating a same-sex spouse as a beneficiary for any employee health plan. Failure to do so could result in a claim for discrimination against the employee seeking the benefits. The consequences of such a claim could include back pay, job reinstatement, attorneys’ fees and other equitable relief the court finds appropriate.

The Obergefell decision simplifies some matters for employers. With gay marriage now legal in all 50 states, medical, dental and other benefits will now be taxed the same for all married couples rather than differing treatment in states that prohibited such marriages. There is no longer any reason for differing tax treatment for same-sex couples based on the location of that employee’s primary place of employment. This uniformity eliminates the need to continually update company policies as states legalized gay marriage on a piecemeal basis.

While the litigation over gay marriage was pending, some employers provided certain rights or protections to an employee’s “domestic partners” or those individuals in “civil unions.” This was a way to provide benefits to partners of employees to whom those employees could not legally marry. In light of the Obergefell decision, such arrangements may no longer be needed. However, an employer should pause before immediately discontinuing such benefits. Some state laws prohibit different treatment of spouses compared to domestic partners for benefits purposes. Similarly, discontinuing such company programs without providing notice of the change to employees could be interpreted as a form of discrimination against same-sex couples that had previously relied on those benefits. Many states prohibit such discrimination based on sexual orientation. Therefore, employers should provide notice of and allow a reasonable “grace period” during which employees can decide whether or not they will marry.

Finally, although not directly related to the Obergefell decision, the Equal Employment Opportunity Commission (EEOC) has filed its first lawsuits alleging discrimination based on sexual orientation is covered by Title VII’s prohibitions on sex discrimination. The EEOC had previously determined protecting LGBT workers is a top priority under its Strategic Enforcement Plan and it has now initiated new litigation to further that interest. This increased enforcement priority by the EEOC should give employers notice that any adverse action against LGBT employees and their spouses is strictly prohibited.

With the constantly changing nature of rights afforded to LGBT employees and same-sex couples over the past 10 years reaching a resolution, now is an ideal time for all employers to make sure their policies have kept up with changes in the law. A thorough review of all handbooks and other policies regarding employee benefits is advisable. Failure to do so could have severe and costly consequences.

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