Same-Sex Marriage Bans As Sex Discrimination: The potential impact on plan sponsors

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In last week’s oral argument on the constitutionality of same-sex marriage bans, Chief Justice Roberts asked the following question:

Counsel, I’m ­­ I’m not sure it’s necessary to get into sexual orientation to resolve the case. I mean, if Sue loves Joe and Tom loves Joe, Sue can marry him and Tom can’t. And the difference is based upon their different sex. Why isn’t that a straightforward question of sexual discrimination?

Whether the Court addresses this rationale in its decision is an open question that will not be known until the Court issues its decision.  Nevertheless, it is worth considering the impact that a sex-discrimination rationale would have on employers and plan-sponsors.

Under Federal law, claims of sex discrimination against employers and plan sponsors arise under Title VII, not the Fourteenth Amendment of the Constitution. Title VII was passed pursuant to the Commerce Clause of Article 1, Section 8, Clause 3 of the U.S. Constitution.

Nonetheless, a ruling by the Court that in certain instances sexual orientation discrimination constitutes sex discrimination under the Constitution would likely lead many courts to employ this reasoning in analyzing claims under Title VII.  Indeed, this rationale is already the official position of the EEOC and the Obama administration. The EEOC believes that LGBT employment discrimination is sex discrimination, because it sees both sexual orientation and transgender discrimination as impermissible forms of sex-stereotyping. Similarly, the EEOC argues that ERISA governed health plans that only provide spousal coverage to opposite sex spouses to be engaging in sex-discrimination. While ERISA does not require benefit plans to provide benefits to opposite sex spouses to provide equivalent coverage to same-sex spouses, the EEOC believes that failure to provide such benefits is sex discrimination under Title VII.  The EEOC’s theorizes that entitlement to coverage turns on the sex of the employee’s spouse. Likewise, the EEOC appears willing to take an aggressive stance on transgender related benefits coverage (i.e. arguing that it is sex discrimination to refuse to consider transgender related medical procedures and treatments as medically necessary, and thus, they are covered under a plan unless specifically excluded).

A ruling that same-sex marriage bans constitute sex-discrimination could buoy these arguments.  Courts might be more willing to view claims of Title VII discrimination by  LGBT individuals, not as a new type of discrimination (i.e. sexual orientation or gender identity discrimination), but rather as sex discrimination.

While a sex-discrimination rationale could encourage certain courts to extend Title VII to LGBT individuals, a dispute would surely remain between jurists as to whether such a broad reading of Title VII is appropriate. After all, courts are much less willing to interpret the terms of a statute in the same broad manner in which they interpret the Constitution. Indeed, Title VII on its face does not reference LGBT discrimination, and it is clear that when this Act was passed in 1964, Congress did not intend to extend its protection to LGBT individuals.  In addition, since the early 1990s every Congress has considered passing an LGBT non-discrimination law (ENDA). Each and every Congress has failed to pass ENDA. For Courts to extend protections to LGBT individuals when Congress has refused to do so would for many jurists constitute a grave overstep in the limited role of courts to interpret (not make) the law.

As is clear, the Supreme Court’s ruling in the upcoming gay-marriage decision may have a significant impact on employers and plan sponsors. Stay tuned for our update on this analysis once the opinion is issued, which will likely come near the end of June.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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