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Workplace equality: Employers must be of aware court-ordered requirements

March 25, 2015

The advice labor and employment attorneys provide companies is changing in light of recent court decisions on Indiana’s laws governing same-sex marriage, and it may change again when the Supreme Court of the United States rules on the issue.

Something is still the same, though: In many places around Indiana and the country, gay and lesbian workers have no protection against workplace discrimination.

“It is one of the fastest-evolving areas of law and a very crucial issue coming forward in employment law,” attorney Mark R. Waterfill said of workplace policies affecting employees married to spouses of the same sex. Waterfill is a partner with Benesch Friedlander Coplan & Aronoff LLP in Indianapolis.

An example: Provisions of the Family and Medical Leave Act will be extended to same-sex couples effective March 27. “Employers have to be aware of it, and they have to have a policy that reflects these changes,” said attorney Mark McAnulty of Kahn Dees Donovan & Kahn LLP in Evansville.

McAnulty said the change represents revised U.S. Department of Labor interpretations of federal laws as same-sex marriage has become legal in 37 states. In the case of FMLA, the department redefined a legal same-sex marriage to be one not governed by the laws of a state where the person lives, but by the state in which the marriage was performed. This “state of celebration” rule replaced a “state of residence” rule adopted after the U.S. Supreme Court’s landmark ruling striking down the Defense of Marriage Act in United States v. Windsor.

“We have many employers who were already offering benefits to domestic partners or same-sex couples,” said Frost Brown Todd LLC attorney Amy Wilson of Indianapolis. “I think the general advice is the definition of ‘spouse’ in Indiana has been expanded.”

The 7th Circuit Court of Appeals in September invalidated Indiana and Wisconsin laws prohibiting same-sex marriage, and the U.S. Supreme Court let that ruling stand. Justices are hearing cases April 28 in which Kentucky, Ohio, Michigan and Tennessee will defend their same-sex marriage bans.

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By and large, labor and employment lawyers agree that unless the Supreme Court overturns same-sex marriage, the best practice for employers in states like Indiana where same-sex marriage is permitted is to make no distinction in policies or practices that apply to married couples.

“I would think that by virtue of the 7th Circuit decision, even smaller employers are going to recognize they cannot adhere to former views that only opposite-sex couples were entitled to receive spousal benefits,” said labor attorney Bill Groth of Fillenwarth Dennerline Groth & Towe LLP.

“Even before the 7th Circuit ruled, various agencies of the federal government were issuing instructions to employers to extend federal benefits available to employees and spouses to same-sex married couples,” Groth said. That includes not just the guidance on FMLA, but also pension and insurance rights that would be covered under the Employee Retirement Income Security Act, he said.

“Point is, employers have had some amount of time already to adjust to the new realities,” Groth said.

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Littler Mendelson P.C. attorney Michael A. Moffatt of Indianapolis agreed that larger employers typically have been ahead of the changes, but when he’s spoken with groups of smaller companies, they’ve been concerned but receptive.

“One of the things I emphasize is the practicality of the change, and don’t look at it as a moral or religious issue. Look at it as business and economic-

type analysis,” Moffatt said. For most organizations, he said the cost-benefit analysis of extending benefits versus the possibility of lawsuits is an easy calculation.

“I’m pretty confident the denial of benefits is going to result in litigation,” Moffatt said.

He also suggested that policies and handbooks should be updated to include gender-neutral terms if they currently use terms such as “husband” or “wife.”

Aside from federally guaranteed benefits, company-specific perks an Indiana employer offers – whether it’s spousal insurance coverage or bereavement leave – must be equally provided for married same-sex couples, attorneys said.

“You have to make sure your policy reflects these changes,” McAnulty said. Likewise, how benefits are facilitated should be even-handed. For example, an employer has a legal right to seek reasonable documentation from someone before granting FMLA leave, but if an employer chooses to do so, all legally married couples’ requests for leave should be treated the same procedurally, he said.

Most of the federal employer-provided benefits have been interpreted to apply equally to same-sex couples, but attorneys said there are some lingering questions. For instance, some say it’s an open question whether state-provided workers’ compensation benefits would be provided for a same-sex spouse of someone who dies in a workplace accident.

While changes have rippled through employment law, Groth and other attorneys said no state or federal law forbids workplace discrimination on the basis of sexual orientation.

“Outside of Marion County and a few others, in many counties there are no protections” for gay and lesbian employees, Waterfill said. Marion County some years back adopted a human-rights ordinance that included gender identity and sexual orientation among the classes of people protected from workplace discrimination.

Lawyers said they were doubtful state or federal lawmakers would act anytime soon to pass laws banning discrimination on the basis of sexual orientation. McAnulty, though, said in his experience that employers largely are accepting.

“I don’t see a lot of my clients wanting to exclude same-sex couples from the workplace,” he said.

Waterfill noted one federal case could extend the protections afforded against sex discrimination under Title VII to include some claims based on sexual orientation.

He cited the case of Prowel v. Wise Business Forms Inc., 579 F. 3d 285. (3rd Circ.) In that case, a gay man named Brian Prowel claimed that “gender stereotyping” led to his firing because of his effeminate mannerisms that also led to workplace harassment. A Pennsylvania District Court ruled against Prowel, but the 3rd Circuit Court of Appeals reversed, finding that his sexual harassment and retaliation claims were questions for the jury.

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“There is an argument that can be made under current law that if someone is terminated because of the employer’s perception of how they should be acting, that is gender discrimination,” Waterfill said. “That’s kind of a cutting edge area of employment law.”

Moffatt said that many large employers he counsels are ahead of federal law. They’ve prohibited discrimination on the basis of sexual orientation as company policy.

He believes that given the federal government’s reinterpretation of FMLA, ERISA and other laws to include same-sex marriage benefits, “It can’t be too far along before Title VII is amended or interpreted to include sexual orientation as a protected category.”•

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