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June 26, 2015

The Hidden Traps in Same-Sex Ruling

Summary:

The U.S. Supreme Court's ruling on same-sex marriage removes some ambiguity about how to handle benefits plans -- but not all.

Photo Courtesy of Amy Schubert

Employers should move quickly to review and update as necessary their human resources and employee benefit policies and practices concerning when same-sex partners of employees are treated as the spouses of the employees in light of the U.S. Supreme Court’s June 26, 2015, decision in Obergefell v. Hodges.

Employer and employee benefit plan leaders and their consultants are cautioned that the decision requiring states to allow same-sex couples to marry does not eliminate ambiguities or differences in state laws and documentation of marriage. Consequently, policies, practices and programs for administering the employment and employee benefit rights of married employees need to be carefully tailored to identify and require proof of marriage evenhandedly. Administrators must take into account variances and potential biases in state documentation and practices that could create complications or even liabilities for employers and plans if not appropriately considered.

Since the Supreme Court ruled that the Equal Protection Clause of the U.S Constitution entitled same-sex couples to equal treatment with married heterosexual couples under federal law in U.S. v. Windsor, 133 S.Ct. 2675 (2013), employers have faced several challenges understanding and updating their policies and practices with respect to employees involved in same-sex relationships.

The Obama administration’s aggressive reinterpretation of federal employment, employee benefit, tax and other laws and regulations placed pressure on employers to update their policies and practices concerning when to recognize employees in same-sex relationships as marriages for employment, employee benefits and other purposes.

As the Windsor decision did not address whether the U.S. Constitution also guaranteed same-sex couples a right to marry under state law, disparities in the treatment of same-sex marriages between the states and rapid changes in the state statutory and judicial rules governing these determinations created significant challenges. Employers had to determine if a same-sex couple could marry in a particular state and the right and duty of the employer in response to such an arrangement.

Today’s Obergefell ruling will help to resolve some, but not all, of this uncertainty by answering the question whether states may refuse to allow same-sex partners to marry or refuse to recognize marriages of same-sex partners. The Obergefell decision settles this debate by holding that the U.S. Constitution requires all states to allow same-sex couples to marry on the same terms as apply to heterosexual couples.

Employers still face many challenges. While states must now treat same-sex and opposite-sex couples equally under marriage laws, determining consistently whether two individuals are legally married in any particular state remains anything but simple. Variations in the marriage laws of the states mean the requirements for and proof of marriage can vary significantly.

Care must also be taken to manage potential discrimination risks that might arise from the adoption of policies that treat same-sex vs. opposite-sex partners disparately. There could be administrative complications and compliance risks. There could also be sex discrimination liability exposures under the Civil Rights Act and other laws.

Parties should act promptly and carefully with the advice of counsel to evaluate and update their policies to respond to the new decisions and these other challenges and duties.

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About the Author

CCynthia Marcotte Stamer is board-certified in labor and employment law by the Texas Board of Legal Specialization, recognized as a top healthcare, labor and employment and ERISA/employee benefits lawyer for her decades of experience.

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