Recent Federal Court decisions regarding Utah’s same-sex marriage laws have placed private employers in unchartered waters. Many private employers are now asking themselves: Am I required to extend benefits to same-sex couples married in Utah as I would to other couples legally married?
On December 20, 2013, U.S. District Court Judge Robert J. Shelby enjoined Utah from enforcing state law that “prohibit[s] a person from marrying another person of the same sex.” Utah intends to appeal the decision. On January 6, 2014, the U.S. Supreme Court stayed Judge Shelby’s order pending a decision from the 10th Circuit Court of Appeals. See Herbert v. Kitchen, No. 13A687, 571 U.S. __, 2014 WL 30367 (Jan. 6, 2014). The Supreme Court’s stay is silent as to the validity of the estimated 1,300 same-sex marriages performed during the 17 days when Utah issued marriage licenses to same-sex couples.
Wednesday, Governor Herbert’s Office issued the following direction to state agencies:
With the district court injunction now stayed, the original laws governing marriage in Utah return to effect pending final resolution by the courts. It is important to understand that those laws include not only a prohibition of performing same-sex marriages but also recognizing same sex marriages. (emphasis in original)
While it is clear that state agencies will not recognize same-sex marriages performed in Utah, federal agencies are likely to take a different view.
Private Employer Obligations under Employee Benefit Plans
Since the Supreme Court’s decision in United States v. Windsor last June, the Internal Revenue Service and the Department of Labor have both provided guidance that employee benefit plans governed by federal law must recognize same-sex marriages. See Rev. Rul. 2013-17, 2013-38 I.R.B. 201, 203 (Sept. 16, 2013) (“[I]ndividuals of the same sex will be considered to be lawfully married under the Code as long as they were married in a state whose laws authorize the marriage of two individuals of the same sex, even if they are domiciled in a state that does not recognize the validity of same-sex marriages.”); DOL Technical Release 2013-04 (Sept. 18, 2013) (stating that for purposes of ERISA, in general “the term ‘spouse’ will be read to refer to any individuals who are lawfully married under any state law, including individuals married to a person of the same sex who were legally married in a state that recognizes such marriages, but who are domiciled in a state that does not recognize such marriages.”).
Nothing in the stay issued by the Supreme Court indicates the 1,300 marriages that occurred in Utah are invalid. Indeed, the message from Governor Hebert’s Office states that it is not commenting on the legal status of those who married and that it is an issue for the courts to decide. It is possible that these marriages will subsequently be found to be invalid and, if this occurs, they would not be protected under the IRS and DOL guidance. While the current status of the marriages under Utah law is disputed, these individuals do have a marriage certificate and employers that do not treat these individuals as married run certain risks under the federal laws governing benefit plans. In fact, earlier today, U.S. Attorney General Eric Holder said that the federal government will recognize the same-sex marriages performed in Utah despite the stay and despite Gov. Herbert’s announcement. Specifically, he said:
“In the meantime, I am confirming today that, for purposes of federal law, these marriages will be recognized as lawful and considered eligible for all relevant federal benefits on the same terms as other same-sex marriages.”
Marriage has a number of impacts on employee benefit plans, from allowing a spouse to enroll in a health plan to reimbursement of medical expenses. Based on the IRS and DOL guidance and the current state of the court decisions, if a private employer has an employee who was married to a same-sex partner in Utah before the stay, the employer should treat the employee as married. (The same is true for an employer who has an employee who has a valid same-sex marriage from another state who now resides in Utah.) If a private employer fails to do so, the employer runs a number of risks, including suit for failing to cover the same-sex spouse (and note that ERISA authorizes plaintiffs to recover attorney fees).
Private Employer Obligations under Employment Laws
Judge Shelby’s decision did not address employment discrimination against LBGT employees or the treatment of those who enter into same-sex marriages. While the Utah legislature declined earlier this year to enact the Employment and Housing Antidiscrimination Amendments (2013 S.B. 262) that would have amended Utah’s employment laws to extend protection based on both sexual orientation and gender identity, many municipalities in Utah have passed ordinances that prohibit employment discrimination on such grounds. Additionally, federal legislation (the Employment Non-Discrimination Act) is now being debated in Congress and it would extend similar protections to LGBT employees if enacted. For the foreseeable future, LBGT employment rights will be something that employers will need to closely monitor.
As to this developing and complex area of law, employers should contact legal counsel when faced with specific questions or unique factual situations.