On June 26, 2015, the Supreme Court of the United States ruled by a 5-4 margin that marriage is a fundamental right that cannot be denied to same sex couples. The Court further held that states are required to recognize same sex marriages that have been legally licensed and performed in another State. Obergefell v. Hodges (June 26, 2015). Writing for the majority, Justice Kennedy opined that “[n]o union is more profound than marriage, for it embodies the highest of ideals of love, fidelity, devotion, sacrifice, and family.” Justices Ginsberg, Breyer, Sotomayor and Kagan joined in the majority opinion which held that the Constitution grants same sex couples the right to “equal dignity in the eyes of the law.”
The Obergefell case arose from a consolidation of six lawsuits in four states (Michigan, Kentucky, Ohio, and Tennessee) that all defined marriage as a union between one man and one woman. The plaintiffs were fourteen same- sex couples and two men whose same sex spouses were deceased who claimed that their Fourteenth Amendment rights to equal protection had been violated by their states’ denial of either their right to marry, or by the failure of their states to provide full recognition of their lawfully performed marriage in another state. The Court acknowledged that states are generally free to vary the types of benefits they grant to married couples; however, the Court recognized the expanding list of rights, benefits, and responsibilities included taxation; inheritance and property rights; spousal privilege in the law of evidence; medical decision making authority; adoption rights; the rights and benefits of survivors; birth and death certificates; health insurance; and child custody, support, and visitation rules. The Obergefell Court declared that the Fourteenth Amendment’s Equal Protection Clause provided a “fundamental right to marry” that could no longer be denied simply because the partners are of the same sex. The Court further held that the same sex marriage bans at issue burdened the liberty of same-sex couples and denied them the benefits afforded to opposite-sex couples. Accordingly, the Court held that these state laws were invalid to the extent that they excluded same-sex couples from civil marriage on the same terms and conditions as opposite-sex couples.
Four separate dissents were filed by Chief Justice Roberts and Justices Scalia, Thomas, and Alito. Chief Justice Roberts read the lead dissenting opinion chastising the majority for writing their own social perspectives into the Constitution. He noted that, although the majority suggested that “religious believers may continue to ‘advocate’ and ‘teach’ their views of marriage,” they left out the word “exercise” with respect to those beliefs, which could lead to religious institutions losing their tax- exempt status if they discriminate against married, same- sex couples. Justice Roberts opined that “[t]here is little doubt that these and similar questions will soon be before this Court.” (Justice Thomas echoed this concern in his own dissent, arguing that it was “all but inevitable” that churches will face demands to “participate in and endorse civil marriages between same-sex couples,” without regard for their own religious liberty.)
Justice Roberts concluded his dissent by inviting the “many Americans – of whatever sexual orientation – who favor expanding same-sex marriage … to celebrate today’s decision. Celebrate the achievement of a desired goal, Celebrate the opportunity for a new expression of commitment to a partner. Celebrate the availability of new benefits. But do not celebrate the Constitution. It had nothing to do with it.”
Justice Scalia wrote his own dissent, acknowledging that he also agreed with everything in Justice Roberts’ dissent. Noting that all the justices graduated from Harvard or Yale Law School, eight grew up on the coasts, and that not one is an evangelical Christian or a Protestant, Justice Scalia wrote that “[t]o allow the policy question of same-sex marriage to be considered and resolved by a select, patrician, highly unrepresentative panel of nine is to violate a principle even more fundamental than no taxation without representation: no social transformation without representation.” Justice Scalia further commented that if he had relied upon the rationale adopted by the majority, he would “hide his head in a bag.”
How does this ruling affect employers? The main “take away” from the decision is, of course, that all individuals who are eligible to be married may now enter into same- sex marriages in their own state of residence or any other state, and such marriages must be recognized by all states. Employers should review polices and benefit plans to ensure they are treating all married couples equally. This includes leave polices, non-discrimination provisions, benefit plans, retirement benefits and benefits offered to employees’ spouses. Employee benefits such as health insurance, retirement plans, FMLA leave may be impacted by this ruling. Although neither the ACA, the IRS Tax Code, nor ERISA require a private employer to offer group health insurance benefits to employees’ spouses, if an employer does provide health insurance and/or other benefits to opposite-sex spouses of its employees, there is a legitimate argument for same-sex spouses to claim the same right to eligibility. It is advisable that fully insured welfare benefit plans that do provide benefits to opposite-sex spouses are reviewed and revised to include the same coverage for same-sex spouses. Although the legal question arguably remains open as to whether self-insured medical plans may continue to exclude same-sex spouses from coverage, such exclusion could lead to federal discrimination claims, particularly since the EEOC has stated its position is that discrimination based on sexual orientation can be sex discrimination under Title VII. Furthermore, at least one U.S. District Court has already addressed the failure to offer the same benefits to same-sex spouses and found protection for same-sex spouses where a company provided benefits to a male spouse of a female employee, but not to the male spouse of a male employee. Hall v. BNSF Railway Company, (W.D. Wash., 2014). Benefits to domestic partners are also in question, and employers are cautioned against making any abrupt changes.
The IRS issued guidance last year applying the Supreme Court’s 2013 decision in U.S. v. Windsor (holding that the Defense of Marriage Act’s definition of marriage was unconstitutional and that the federal government must recognize same-sex marriages that are recognized by states) to qualified retirement plans. Interestingly, in Obergefell, the Supreme Court held that this definition was invalid because it undermined “state sovereign choices about who may be married.” Although the Obergefell decision made only passing reference to tax implications, the Windsor Court’s deference to “state sovereignty” no longer exists and now all 50 states, including the fourteen states that have same-sex marriage bans on the books, are required to issue marriage licenses between two people of the same sex, and to provide full recognition of same-sex marriages legally performed in other states. Accordingly, employers should carefully review the beneficiary and definition sections of their qualified plans to ensure that same are compliant with this change in the law. In particular, plan sponsors should review the definition for “spouse” that may well be buried in the plan materials as well as review the plan’s default beneficiary provisions. It is clear that tax qualified retirement plans must recognize same-sex marriages for purposes of spousal rights, but it is less clear whether they must be recognized for plan based rights that aren’t legally mandated. But I would be wary of differential treatment without adequately assessing risk. Notwithstanding the Court’s proclamation, we do anticipate further challenges, similar to the Hobby Lobby challenges to the ACA, based on religious and ideological grounds.
The FMLA previously provided that married same-sex couples could only be considered married for purposes of the FMLA if they resided in a state that recognized same- sex marriage. The rule was then redefined to recognize the law of the “state of celebration” as the determinative factor in whether or not a same-sex spouse qualifies for FMLA benefits. After Obergefell, all legally married same- sex couples, regardless of where they were married, will presumably be eligible for FMLA benefits under qualifying circumstances.