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Same-Sex Marriage Rulings May Affect Employers in Other States

(Update May 26, 2009 – California Supreme Court rules that same-sex marriage ban — Proposition 8 — passed by voters in November 2008 is legal but 18,000 same-sex marriages performed before the ban was approved are valid.)

A recent decision by the California Supreme Court on same-sex marriage may have implications for employers in other states, including employment benefits and state and federal employment laws.

On May 15, California became the second state in the nation to recognize full marriage rights for same-sex couples. (Massachusetts has recognized same-sex marriages since May 17, 2004, when the Massachusetts Supreme Judicial Court said it is unconstitutional for the Massachusetts constitution to restrict marriage to heterosexual couples only.)

In a 4-3 decision, the California Supreme Court ruling held that previously enacted legislative measures and ballot initiatives restricting marriage to heterosexual couples were in violation of the state constitution. Specifically, the California high court struck down a 2000 ballot measure, Proposition 22, which restricted valid and recognized marriages in the state of California to those between a man and a woman. The ballot initiative was approved by 61 percent of California voters.

The California court decision
The issue in this case is whether, in light of California’s comprehensive domestic partnership legislation, the failure to designate the official relationship of same sex couples in California as “marriage” is a violation of the California Constitution.

The majority of the justices found that the substantive right of two adults to marry “constitutes a vitally important attribute of the fundamental interest in liberty and personal autonomy that the California Constitution secures to all persons.”

Further, the majority noted that the state has already recognized that a person’s sexual orientation, just like a person’s race or gender, does not constitute a legitimate basis upon which to deny or withhold other legal rights. Thus, given the established importance of marriage as a fundamental right to Californians, the court concluded that the California Constitution must be interpreted to guarantee that basic right to all Californians and, thus, to same-sex couples as well as heterosexual couples.

The decision became final and effective on June 14, 2008, and same-sex couples from any state will be permitted to seek civil marriages on that date. In the meantime, opponents of the ruling have already begun work on a state constitutional amendment that may appear on the November 2008 California ballot. This amendment would re-ban same-sex marriages by expressly defining marriage in the California constitution as being only between a man and a woman.

What’s going on in New York?
As the California court decision was nearing finality, on May 14, New York Gov. David A. Paterson issued a directive requiring same-sex marriages performed in other jurisdictions also to be recognized in New York.

Numerous regulations will need to be revised to correctly accommodate same-sex couples married in Massachusetts, California, Canada, and any other jurisdiction choosing to legalize same-sex marriage.

The directive seems to suggest that New York may be next on the list for the legalization of gay marriage. Previous attempts at legalization were made by former Governor Eliot Spitzer, but they failed to pass in the state Senate. Paterson’s executive move, lauded by gay rights advocates and lambasted as an overstepping of authority by same-sex marriage opponents, is a strong statement, to be sure.

Will other states be affected?
In response to the news that full marriage rights would be allowed for same-sex partners in California, San Francisco Mayor Gavin Newsom responded, “As California goes, so goes the nation.”

Yet even in the California Supreme Court’s majority opinion, Chief Justice George emphasized the distinction between California’s statutory scheme, which already afforded same-sex couples “virtually all of the same substantive legal benefits and privileges” of married couples, and the foundation for the legal battles in other states. (Maryland, Arizona, New York, and Indiana are a few of the states named in the case text.)

With that said, the majority of the California Supreme Court justices cited a similar issue that is pending in Connecticut. In that case, the court is expected to determine whether a Connecticut statute that limits marriage to opposite-sex couples is unconstitutional under the Connecticut Constitution, notwithstanding the existence of a recently enacted Connecticut statute that permits same-sex couples to enter into a civil union.

Iowa also has a similar case pending in its courts. Despite the movement in New York, Iowa, and Connecticut, it’s unlikely that a rush of law permitting same sex marriages will follow the California court’s lead.

Instead, those states choosing to validate same-sex partnerships seem to be opting for the civil union or domestic partnership approach, and this less emotionally charged progress is more likely to continue. Currently, some form of civil union status is recognized in Connecticut, New Hampshire, New Jersey, and Vermont. The states of Oregon, Hawaii, Maine, Washington, and the District of Columbia have domestic partnership legislation under which same-sex couples are afforded comparable rights.

Employment implications for states outside California
Among the numerous questions that arise with regard to the California decision are those regarding employment benefits. Currently only California, Massachusetts, and New York would expressly recognize and confer legal benefit, including employment benefits, on those same-sex couples married in California.

On the other hand, 44 states have laws or constitutional provisions mirroring the federal Defense of Marriage Act (DOMA) that prohibit performing and/or recognizing same-sex marriages performed in other states. (Rhode Island, New Jersey, New Mexico, and the District of Columbia are the regions that do not currently prohibit performing or recognizing same-sex marriages of other states, but that also do not expressly recognize them, either.)

Ostensibly, states that permit civil unions and domestic partnership registration, but don’t recognize same-sex marriage, would continue restricting benefits for same-sex married couples from other states. They would require same-sex couples seeking employment benefits in their states to follow the set procedures for obtaining a civil union or domestic partnership, if available.

With California’s current “open door policy” to marry same-sex couples from other states, however, there may be challenges waged, not only in the three “unclear” states and D.C., but in some of the 44 states that refuse to recognize same-sex marriages.

What to do in your own company
With the patchwork of domestic partnerships, civil unions, and same-sex marriages dotting the nation, knowing how to handle your benefit policies within your company is becoming more convoluted. Are you required to provide benefits or prohibited from doing so? (For example, the Michigan Supreme Court recently ruled that public entities are prohibited from providing benefits to domestic partners.)

Whether you’re in favor of or against recognition of same-sex partnerships by whatever name, you need to know what your response will be if an employee in your company requests benefits for a same-sex spouse.

First, recall that California is the only state with an open-door policy for same-sex civil marriages. Non-residents of Massachusetts are prohibited from marrying in Massachusetts if the marriage would be void in their home state. Thus, a same-sex “marriage” that is performed in New Mexico places no additional requirements on employers in any other state.

Second, find out about your home state’s “DOMA” status. If your employee lives in a state that has adopted the federal DOMA as state law, then you have no further benefit obligations to the same-sex spouse.

Regardless of the individual state requirements, some employers may wish to voluntarily extend benefits to same-sex spouses. If you choose to do so, remember that the federal DOMA prohibits defining marriage, for federal purposes, as anything other than the union between a man and a woman. For this reason, same-sex spouses will not qualify as “spouses” under federal law for certain federally backed employee benefit plans and programs.

Thus, you will need to carefully plan your actions with regard to the Family and Medical Leave Act (FMLA), Employee Retirement Income Security Act (ERISA), Section 125 plans, flexible spending accounts (FSAs), and health savings accounts (HSAs).

Aside from reviewing benefit policies, employers also may wish to update employee handbooks, discrimination policies, and the like to reflect the company’s preferred definition of “spouse.” Any changes should be communicated to employees clearly and promptly.

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