Private Employers Nationwide Face New Quandary of Conscience

September 26, 2013

This summer, the Supreme Court in United States v. Windsor struck down the federal definition of marriage that limited federal benefits to those couples in natural marriages of one man and one woman. In the wake of that ruling, a surge of federal agency announcements have expanded access for same-sex couples to federal benefits from many agencies such as the Internal Revenue Service, Medicare, the Department of Defense, and the Veterans Administration. Though Justice Kennedy issued an opinion in Windsor with clear federalism themes, reiterating the need to “[defer] to state-law policy decisions with respect to domestic relations,” the federal government has instead imposed a new de facto federal definition of marriage that doesn’t respect the diversity of state laws on this topic. In other words, federal marriage benefits will be given to couples who are not legally married under the state law of a super majority of the states.

The latest agency to ignore the majority of states’ laws on this topic is the Department of Labor. Last week, DOL issued guidance informing all private employers across the nation that they must now extend spousal health and retirement benefits organized under the Employment Income Retirement Security Act of 1974 (ERISA) to same-sex spouses—even if they live in a state that does not recognize same-sex “marriage.”

Unlike previous agency guidance, Labor’s announcement means that many private business owners and companies must now adhere to the Obama Administration’s new federal definition of marriage in determining their benefit policies, despite possible religious or moral objections to extending marriage benefits to same-sex partners. And, since the majority of private pension plans and all self-funded employee health benefits plans are organized under ERISA, the impact of this law is dramatic (reaching over 700,000 private retirement plans and 2.3 million health plans).  

If you’re a shop owner who is willing to hire any individual, no matter their sexual orientation, but who believes in natural marriage and only wishes to extend spousal benefits to those traditionally married couples, how will you comply with federal law?  Some legal commentators have suggested that a private employer could have standing to sue over this agency guidance, though the outcome of such a challenge would be uncertain. 

In addition to the burden this places on private employers, the Labor guidance continues to trample on the will of the American people in most states who have maintained laws respecting only natural marriages. By requiring companies in states that don’t recognize same-sex “marriages” to extend benefits to same sex partners, the federal government has enacted the very “contradictory marriage regimes within the same State” that the Windsor Court condemned in its June 2013 ruling.