Urgent Guardian HR Alert: New U.S. Supreme Court Rulings

The United States Supreme Court has issued a landmark ruling in the case of United States v. Windsor, No. 12-307 (June 26, 2013), and an additional important decision in the matter of Hollingsworth, et al. v. Perry, No. 12-144 (June 26, 2013). THE DECISIONS In Windsor, the United States Supreme Court ruled the Defense of Marriage Act of 1996 (“DOMA”) violated the equal protection component of the Fifth Amendment’s Due Process Clause. In other words, the Court has firmly stated that prohibiting same sex marriage is discriminatory under the equal protection clause and therefore effectively made sexual orientation a protected class under the federal constitution. The pertinent language of DOMA that was found unconstitutional reads: “In determining the meaning of any Act of Congress, or of any ruling, regulation, or interpretation of the various administrative bureaus and agencies of the United States, the word “marriage” means only a legal union between one man and one woman as husband and wife, and the word “spouse” refers only to a person of the opposite sex who is a husband or a wife.” Hollingsworth involved an appeal to the US Supreme Court as to whether Proposition 8 was unconstitutional as both a California District and Appellate Court had previously ruled.  The US Supreme Court decided not to hear a challenge holding that the 9th Circuit Court of Appeals lacked jurisdiction to hear the case.  The result is that the District Court’s ruling which was that the proposition was unconstitutional is upheld and the proposition fails. THE IMPLICATIONS Now that the US Supreme Court has issued its rulings, there are several immediate matters that must be addressed by employers:
  1. Handbooks –  it is recommended that employers review their employee handbooks to ensure that the policies do not run afoul of the law.  Namely, sexual orientation should be added as a protected class under the EEOC, anti-harassment and discrimination and where applicable FMLA (and similar state leave law) provisions.
  2. Benefit administration – the ruling prohibits discrimination in the distribution of benefits to same sex married couples certainly in those states where those unions have been given legal status.  For enterprises with operations in multiple states, some of which protect same sex marriage and some that do not, it is advisable to consider creating a single policy accepting same sex couples whether married or domestic partners.  Of course, all employers need to review their benefit packages contractual requirements and then discuss the matter with counsel to make sure they are in legal compliance.
  3. Leave laws – FMLA requires that employers subject thereto permit employees time off to care for a seriously ill spouse.  Based upon the ruling in Windsor that now applies to same sex married couples and by extension quite conceivably to domestic partnerships.  If an employee is in a same sex marriage (in a state where they are recognized) and then moves to a state where they are not, because the Windsor and Hollingsworth rulings create new federal law, it trumps any individual state statute and would require an employer in any state to respect the legality of the marriage regardless of where the employee currently works.
  4. Taxation of Benefits – before the rulings only opposite sex married spouses could avail themselves of the IRS provision that did not include benefits as part of gross income calculations.  Under Windsor the same tax treatment must now be given to individuals in same sex marriages and employers should cease imputing those amounts into the gross income calculation.