How the Same Sex Marriage Ruling will change Ohio Employment Laws

posted by Michael Fortney  |  Jun 29, 2015 3:36 PM in Employment Law

The United States Supreme Court struck down Ohio’s prohibition against marriages between same sex partners in Obergefell v. Hodges. In so doing, the Supreme Court recognized a fundamental right to marriage.

The Supreme Court did not recognize a fundamental right to be lesbian, gay, bisexual or transgender. It did not recognize LGBT as a protected class under federal or state anti-discrimination laws. Nonetheless, Obergefell will have a potentially huge impact on the relationship between employers and their employees in Ohio. 

Obergefell strikes down laws that burden the right of some people to marry more than others. The result in those cases would have been the same if the laws put more burdens on, say, people born under the sign of Aquarius than other people. The reason is that, since marriage is a fundamental right, the Equal Protection clauses of the Fifth and Fourteenth Amendments prohibit federal and state governments from burdening the right of some people to marry more than others.

Since the laws struck down by Obergefell involved same sex couples, however, it will affect employment laws that involve same sex marital relationships. The effect of Obergefell on those laws will be to invalidate laws that treat family relationships between same sex individuals differently from the same relationships between opposite sex individuals. For example, covered employers cannot now deny otherwise eligible employees from taking FMLA leave to care for a same sex spouse with a serious health condition. Similarly, Ohio’s Supreme Court already issued a rule that requires Ohio’s courts to construe their rules of procedure in a way that treats family relationships as gender neutral. See S. Ct. Ohio June 26, 2015 Admin. Action. We are currently surveying state and federal laws that create rights or obligations based on family relationships, which we will publish soon.

Importantly, Obergefell and Windsor only prohibit actions by the state. They do not apply to private parties, like private employers, landlords or vendors.  Therefore, private (non-governmental) restaurants can refuse to serve same sex couples, private employers can refuse to hire gay applicants, and private landlords can refuse to rent to transgender tenants. While such discrimination may be invidious and highly offensive to ordinary people, as long as it involves purely private parties, such discrimination is not (yet) unlawful under the Ohio or federal anti-discrimination laws. 

Not all employment relationships are entirely private in nature, though. State action has a way of creeping in, especially with respect to benefits. Suppose, for example, an employer offers an all-expense-paid vacation for two as a prize in a sales competition, but limits the two to opposite sex partners. In that case, denying the benefit to same sex spouses treats marriage unequally, but as long as it is a private company  and a private benefit (i.e., offered and paid for by the private employer), it does not involve state action and is not unlawful.

But what about a health insurance plan that excludes persons of the same sex from the definition of a covered “spouse”? We have already seen one such policy, presumably from an insurer that was attempting to comply with the Ohio same sex marriage law before Obergefell struck it down. Employee benefits can involve state action, since numerous laws affect and regulate health insurance, including ERISA and the federal tax code.

ERISA provides rights to “spouses” under employer provided health insurance and pension plans, like the right to spousal  notice under COBRA (29 USC 1166) and the right to a survivor annuity for the spouse of a participant with a vested annuity who dies before the annuity starting date (29 USC 1055). Now, ERISA must be read to include same sex as well as opposite sex partners. ERISA does not, however, require employers to provide health insurance benefits to anyone, including spouses. That is a decision left up to employers. Thus, it is not clear if an employer who offers health insurance to opposite sex spouses but not same sex spouses violates ERISA.

The US tax code gives tax breaks to employers who provide qualifying health insurance benefits. Whether or not tax deductions for health insurance expenses amounts to state action sufficient to trigger Obergefell’s prohibition also remains to be seen. Justice Kennedy made a point of assuring ministers that their churches would not lose their tax exempt status if they refused to marry same sex couples, but he did so on First Amendment religious freedom grounds. Will the IRS now refuse to allow non-religious employers a deduction for health insurance expenses if the benefits are only available to opposite sex spouses? This and similar questions will likely require litigation.

For now, employers who want to provide same sex spouses with different and less desirable terms and conditions of employment should hire counsel to research whether such terms or conditions of employment involve action by the state or federal government. The litigation risk will turn on the extent of the state action. In the health insurance example discussed above, employers will, at a minimum, run a significant litigation risk.

The safer path for employers is not to discriminate between same and opposite sex spouses with respect to terms and conditions of employment. With Ohio’s Constitution Article XV, Section 11 struck down by Obergefell, there is no longer any prohibition against providing benefits to same sex married couples. Employers who take that path will have to amend and republish any discriminatory policy or plan to remove the discriminatory provision, but they will be able to do so without running a risk of litigation.


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