Why it matters

The Department of Labor (DOL) has been busy recently, issuing final rules on two different issues: same-sex couples under the Family and Medical Leave Act (FMLA) and Sarbanes-Oxley Act (SOX) whistleblowers. Pursuant to the U.S. Supreme Court’s 2013 decision in U.S. v. Windsor, the agency expanded the DOL’s definition of “spouse” under the FMLA to include eligible employees in legal same-sex marriages who take leave under the statute to care for their spouse or covered family member, regardless of whether same-sex marriage is legal in the state where they reside. The new regulations—which establish a spousal relationship based on the place of celebration, as opposed to the place of residence—take effect March 27. The DOL also published a final rule addressing retaliation against whistleblowers under SOX. Under the rule, if a covered employee believes his employer took adverse action because he engaged in a protected activity, he must file a complaint with the Occupational Safety and Health Administration (OSHA) within 180 days. The complaint—which can be oral or written—must demonstrate that the protected activity was a contributing factor to the adverse action. If OSHA concludes, after an investigation, that “reasonable cause” exists to believe a violation of the SOX whistleblower provisions has occurred, the agency will issue a preliminary order with relief it deems necessary—including possible reinstatement.

Detailed discussion

In June 2013, the U.S. Supreme Court declared in U.S. v. Windsor that Section 3 of the Defense of Marriage Act—the provision that interpreted “marriage” and “spouse” to be limited to opposite-sex couples for purposes of federal law—was unconstitutional.

Federal agencies responded with recognition of additional rights for same-sex couples. After releasing a proposal last July, the DOL finalized its new interpretation of the FMLA in light of the Windsor decision.

Going forward, residence will be irrelevant for purposes of evaluating the legality of a same-sex marriage for purposes of the FMLA. Applying instead a “state of celebration” rule, the DOL stated that as long as a same-sex couple was validly married in a state (or other jurisdiction) that legally recognizes same-sex marriage, either spouse may request leave from an employer under the FMLA. Previously, a “state of residence” rule resulted in a same-sex spouse having to live in a state that recognized his or her marital status in order to request leave under the FMLA.

For example, if an employee marries her same-sex partner in Massachusetts and moves to Texas, the employee will still receive the full benefits of the FMLA despite the fact that Texas does not currently recognize same-sex marriages.

According to U.S. Secretary of Labor Thomas E. Perez, “the basic promise of the FMLA is that no one should have to choose between the job and income they need, and caring for a loved one.” As a result of the final rule, “we extend that promise so that no matter who you love, you will receive the same rights and protections as everyone else.”

No change was made to the regulations with regard to employee documentation requirements. In order to be eligible for an FMLA leave, an employee may provide a simple statement that such a valid marital relationship exists or provide written documentation such as a court document or birth certificate. The existing provision “adequately addresses the nature of the documentation that employers may require,” the DOL stated, and “in all cases, a simple statement of family relationship is sufficient under the regulation to satisfy the employer’s request.” The new regulations take effect on March 27.

The DOL also released a final rule addressing whistleblower protections under the Dodd-Frank Wall Street Reform and Consumer Protection Act, which amended the SOX.

Dodd-Frank tweaked the SOX whistleblower provisions by extending the statute of limitations for filing a complaint from 90 days to 180 days and expanding covered employers to include the subsidiaries and affiliates of securities companies, as well as national credit rating agencies.

The DOL’s final rule made these changes official, as well as others. The complaint process for employees of public companies, their subsidiaries, contractors and subcontractors alleging retaliation for reporting actions they believe to be violations of securities laws begins with either an oral or written complaint. The complaint must be made within 180 days from the alleged retaliation and filed with the OSHA.

After a complaint is received, and an investigation initiated, the employer has the opportunity to show by “clear and convincing evidence” that the adverse action would have been taken regardless of the protected activity. If successful, the investigation ends. If not, and OSHA concludes at the end of the investigation that reasonable cause exists to believe a violation of the SOX whistleblower provisions has occurred, the agency will issue a preliminary order.

The preliminary order will include relief the DOL deems necessary to make the employee whole. Relief can include monetary damages, as well as reinstatement (a provision on which many employers commented during the initial rule proposal stage but which was kept in the final version). Employers may object to reinstatement by filing an objection with OSHA and requesting a hearing with an administrative law judge (ALJ) but cannot avoid the reinstatement order by attempting to establish that the employee is a security risk (another change from the DOL’s earlier proposal).

If an employer can demonstrate that it did not engage in prohibited retaliation, the final rule does not allow the employer to recover wages paid during the reinstatement period. “OSHA disagrees that economic reinstatement without a mechanism for reimbursement violates the employer’s rights under the due process clause,” according to the final rule.

The final rule took immediate effect as of March 5.

To read the final FMLA rule, click here.

To read the final SOX rule, click here.