FROM SAME-SEX MARRIAGE TO OVERTIME FOR SYNCHING MY BLACK BERRY:
Recent Decisions Affecting the Workplace
Alaska Municipal Attorneys Association
November 18-19, 2013
Terrence S. Welch
Brown & Hofmeister, L.L.P.
740 E. Campbell Road, Suite 800
Richardson, Texas 75081
“The Times They Are A-changin’.”
There have been significant decisions by the United States Supreme Court and other courts during the last several years that have rocked the workplace, resulting in discarding past notions of who is, or is not, married and how same-sex couples should be treated under the law by employers. Not surprisingly, there have been a multitude of cases that address more mundane issues, from overtime compensation under the Fair Labor Standards Act to obesity being considered a disability and the ongoing battle about what constitutes a reasonable accommodation under the ADA. The purpose of this paper is to provide a broad overview of recent cases and where applicable, actions by regulatory agencies in interpreting these new cases.
I. Same-Sex Marriage and the Death of DOMA
United States Supreme Court Cases
The two blockbuster United States Supreme Court cases on the topic of same sex marriage during the last term of the Court were United States v. Windsor,1 and Hollingsworth v. Perry.2 While not providing a detailed analysis of both of the cases, a brief review is nonetheless helpful.
Edith Windsor and Thea Spyer, a same-sex couple residing in New York, were lawfully married in Ontario, Canada in 2007. Ms. Spyer died in 2009, leaving her entire estate to Ms. Windsor. Ms. Windsor sought to claim the federal estate tax exemption for surviving spouses; however, she was barred from doing so by Section 3 of the Defense of Marriage Act (DOMA) (codified at 1 U.S.C. § 7),3 which provided that the term “spouse” only applies to a marriage between a man and woman. The Internal Revenue Service (IRS) found that the exemption did not apply to same-sex marriages, denied Ms. Windsor’s claim, and compelled her to pay $363,053 in estate taxes.
On November 9, 2010, a lawsuit was filed against the United States government in the United States District Court for the Southern District of New York, where Ms. Windsor sought a refund because DOMA singled out legally married same-sex couples for “differential treatment compared to other similarly situated couples without justification.” On February 23, 2011, U.S. Attorney General Eric Holder issued a statement from the Obama administration that agreed with the plaintiff’s position that DOMA violated the United States Constitution and said he would no longer defend the law in court. The Bipartisan Legal Advisory Group (BLAG) of the House of Representatives continued the defense of the law. On June 6, 2012, U.S. District Judge Barbara S. Jones ruled that Section 3 of DOMA was unconstitutional under the due process guarantees of the Fifth Amendment and ordered the federal government to issue the tax refund, including interest.4 The Second Circuit Court of Appeals affirmed the decision on October 18, 2012.5
BLAG and the U.S. Department of Justice (DOJ), as a nominal defendant, appealed the decision to the U.S. Supreme Court, which granted a writ of certiorari in December 2012. On March 27, 2013, the Supreme Court heard oral arguments and on June 26, 2013, issued a 5–4 decision declaring Section 3 of DOMA to be unconstitutional. The Court first held that although DOJ decided not to defend DOMA, the government retained a stake sufficient to support Article III jurisdiction because the unpaid refund is “a real and immediate economic injury.”6 Thus, there was a sufficient basis for the court to entertain jurisdiction over the case.7 DOMA was then determined to be unconstitutional as a deprivation of the equal liberty of persons under the Fifth Amendment. The Court noted that although the regulation of marriage has traditionally been within the authority of the states,8 DOMA, applicable to more than 1,000 federal statues and numerous federal regulations—such as Social Security, housing, taxes, criminal sanctions, copyright and veterans’ benefits—was directed to a class of persons that the laws of New York and 11 other states had sought to protect.9 Justice Kennedy wrote that DOMA is inconsistent with the principle that marriage laws may vary from state to state, but are consistent within each state. “The principal purpose [of DOMA] is to impose inequality . . . to deprive some couples married under the laws of their State, but not other couples, of both rights and responsibilities.”10 New York’s decision was a proper exercise of its sovereign authority and by seeking to injure the class New York sought to protect, DOMA violated basic due process and equal protection principles applicable to the federal government. Constitutional guarantees of equality “must at the very least mean that a bare congressional desire to harm a politically unpopular group cannot” justify disparate treatment of the group. DOMA’s history and text indicated a purpose and practical effect to impose a disadvantage, a separate status, and a stigma upon those entering into same-sex marriages made lawful by the states. The law deprived some couples married under the laws of their states, but not others, of rights and responsibilities, creating two contradictory marriage regimes within the same state; it diminished the stability and predictability of basic personal relations.11 Justice Kennedy concluded that
[DOMA] is invalid, for no legitimate purpose overcomes the purpose and effect to disparage and to injure those whom the State, by its marriage laws, sought to protect in personhood and dignity. By seeking to displace this protection and treating those persons as living in marriages less respected than others, the federal statute is in violation of the Fifth Amendment. This opinion and its holding are confined to those lawful marriages.12
On the same day that the Windsor opinion was issued, the Court also issued a second 5–4 decision in Hollingsworth v. Perry, a case related to California's constitutional amendment initiative barring same-sex marriage. The Hollingsworth decision effectively allowed same-sex marriages in that state to resume after the Court ruled that the proponents of the initiative lacked the requisite Article III standing to appeal in federal court based on its established interpretation of the case or controversy clause.
In 2008, the California Supreme Court held that limiting the official designation of marriage to opposite-sex couples violated the equal protection clause of the California Constitution.13 Later that year, state voters then passed a ballot initiative, Proposition 8, amending the state constitution to define marriage as a union between a man and a woman.14 Same-sex couples who wished to marry filed suit in federal court, challenging Proposition 8 as being in violation of the Due Process and Equal Protection Clauses of the Fourteenth Amendment to the U.S. Constitution.15 Not unlike the position taken by the Obama Administration in Windsor, California state officials refused to defend the law; however, the federal district court allowed the initiative’s official proponents to intervene and the court subsequently declared Proposition 8 unconstitutional and enjoined its enforcement.16 State officials declined to appeal but the intervenors opted to appeal. The Ninth Circuit certified a question about Article III standing, to which the California Supreme Court answered that the official proponents of a ballot initiative had authority to assert the state’s interest to defend the constitutionality of the initiative when public officials refuse to do so. The Ninth Circuit, relying on that answer, concluded that petitioners had standing and affirmed.17 The Supreme Court vacated and remanded, holding that the intervenors did not have the requisite Article III “case or controversy” standing to appeal. While the Court determined the intervenors had standing to initiate this case against the California officials responsible for enforcing Proposition 8, once the federal district court issued its order, they no longer had any injury to redress—they had won—and state officials chose not to appeal.18 The intervenors had not been ordered to do or refrain from doing anything and their “generalized grievance” was insufficient to confer standing. “Their only interest in having the District Court order reversed was to vindicate the constitutional validity of a generally applicable California law.”19
B. So How Is The Federal Government Responding?
Since late June, the Federal Government has been in the process of responding to Windsor. Not surprisingly, federal regulations are being revised accordingly. Federal guidelines have been amended as follows:
● Federal Taxes. On August 29, 2013, in Revenue Ruling 2013-17, the Department of the Treasury and the Internal Revenue Service (IRS) ruled that same-sex couples, legally married in jurisdictions that recognize their marriages, will be treated as married for federal tax purposes. The ruling applies regardless of whether the couple lives in a jurisdiction that recognizes same-sex marriage or a jurisdiction that does not recognize same-sex marriage. Under Revenue Ruling 2013-17, same-sex couples will be treated as married for all federal tax purposes, including income and gift and estate taxes. The ruling applies to all federal tax provisions where marriage is a factor, including filing status, claiming personal and dependency exemptions, taking the standard deduction, employee benefits, contributing to an IRA and claiming the earned income tax credit or child tax credit.
Any same-sex marriage legally entered into in one of the 50 states, the District of Columbia, a U.S. territory or a foreign country will be covered by the ruling; however, the ruling does not apply to registered domestic partnerships, civil unions or similar formal relationships recognized under state law. Same-sex marriage partners may file amended tax returns and choose to be treated as married for federal tax purposes for one or more prior tax years still open under the statute of limitations. Generally, the statute of limitations for filing a refund claim is three years from the date the return was filed or two years from the date the tax was paid, whichever is later. As a result, refund claims can still be filed for tax years 2010, 2011 and 2012. Some taxpayers may have special circumstances, such as signing an agreement with the IRS to keep the statute of limitations open, that permit them to file refund claims for tax years 2009 and earlier. Additionally, employees who purchased same-sex spouse health insurance coverage from their employers on an after-tax basis may treat the amounts paid for that coverage as pre-tax and excludable from income.20
● Immigration. On July 1, 2013, Secretary of Homeland Security Janet Napolitano issued the following statement:
After last week’s decision by the Supreme Court holding that Section 3 of the Defense of Marriage Act (DOMA) is unconstitutional, President Obama directed federal departments to ensure the decision and its implication for federal benefits for same-sex legally married couples are implemented swiftly and smoothly. To that end, effective immediately, I have directed U.S. Citizenship and Immigration Services (USCIS) to review immigration visa petitions filed on behalf of a same-sex spouse in the same manner as those filed on behalf of an opposite-sex spouse.21
USCIS has done exactly that, and visas and green cards now extend to same-sex spouses. An FAQ issued by USCIS provides the following information about immigration and same-sex marriages: U.S. citizens or lawful permanent residents in a same-sex marriage can now sponsor their spouses for a family-based immigrant visa; U.S. citizens who are engaged to be married to a foreign national of the same sex can file a fiancé or fiancée petition; and same-sex couples who were married in a U.S. state or a foreign country that recognizes same-sex marriage may file an immigrant visa petition for the spouse, because as a general matter, the law of the place where the marriage was celebrated determines whether the marriage is legally valid for immigration purposes. Just as USCIS applies all relevant laws to determine the validity of an opposite-sex marriage, it will apply all relevant laws to determine the validity of a same-sex marriage. The domicile state’s laws and policies on same-sex marriages will not bear on whether USCIS will recognize a marriage as valid.22
● Family and Medical Leave Act. The U.S. Department of Labor issued its Guidance (Fact Sheet #28F)23 in mid-August confirming that same-sex married couples are entitled to the same benefits of the Family and Medical Leave Act (FMLA) as heterosexual married couples. The Guidance indicates that FMLA spousal leave entitlements extend to same-sex spouses that reside in states that recognize same-sex marriages. DOL now defines “spouse” as “a husband or wife as defined or recognized under state law for purposes of marriage in the state where the employee resides, including “common law” marriage and same-sex marriage.” An employer located in a state that does not recognize same-sex marriage does not have to grant FMLA leave to a same-sex married employee to care for that employee’s same-sex spouse if the same-sex married couple does not reside in a state that recognizes same-sex marriage. There is nothing in the DOL Guidance, however, that precludes an employer from having its own internal leave policy allowing for leave for a same-sex spouse. Until there is further judicial review, there will be disparate treatment of same sex married couples for FMLA leave purposes that will turn on the place of residence—DOL’s interpretation is unique because it focuses solely on the residence of the employee and not where the employer is located.
● Other Federal Regulations. Below is a summary of other regulations from the federal government about same-sex marriage:
Employees may cover their same-sex spouses under health care plans provided by their employers without having to pay taxes on the value of such coverage.
Same-sex spouses have full rights to continuation health care coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA) in the event of a participant’s termination of employment, divorce or legal separation.
Employees may receive tax-free reimbursement under flexible spending accounts, health reimbursement arrangements and health savings accounts for qualified medical expenses incurred by same-sex spouses.
Same-sex spouses are entitled to the same special enrollment right under the Health Insurance Portability and Accountability Act (HIPAA) as opposite-sex spouses.
Same-sex spouses are entitled to a 50 percent qualified joint and survivor annuity (QJSA) or a 75 percent qualified optional survivor annuity (QOSA) under a participant’s pension plan, and the spouse’s consent is required to pay pension benefits in any other form.
Same-sex spouses are entitled to a 50 percent qualified preretirement survivor annuity (QPSA) where the participant dies prior to commencing pension benefits, unless the spouse consents to waive the benefit.
Same-sex spouses are entitled to receive 100 percent of a participant’s Section 401(k) account balance at death, unless the spouse consents to another beneficiary.
Same-sex spouses are clearly eligible to receive a qualified domestic relations order (QDRO) apportioning pension benefits upon divorce.
Same-sex spouses may roll over plan distributions to their own individual retirement account or employer plan, rather than only being able to roll over to an “inherited IRA” (which is subject to more restrictions).24
II. New Technology and Overtime Compensation
Under the Fair Labor Standards Act and its regulations, an employer must record and pay non-exempt employees for all hours “suffered or permitted to work,” without regard to the reason for the work.25 Hours worked includes time spent for the employer’s benefit, as well as time an employee cannot otherwise effectively use as his or her own, even if the employee is not actively engaged in performing a task.26 There is no such thing as “unauthorized” work; if management is aware the work is being done, the employer must record the hours and compensate the non-exempt employee accordingly.27 Nonetheless, in 1946 the United States Supreme Court created a “de minimis” exception to the general rule that non-exempt employees must be paid for all hours worked.28 Courts have noted that “[n]o rigid rule can be applied with mathematical certainty” when determining whether work time is de minimis for purposes of the Fair Labor Standards Act.29 Consequently, courts often employ a three-pronged test, considering: (1) the practical administrative difficulty of recording the additional time; (2) the aggregate amount of compensable time; and (3) the regularity of the additional work.30
The analytical and regulatory emphasis on “administrative difficulty,” “industrial realities,” and whether an employee’s working time is “practically ascertainable” in the context of the de minimis exception should serve as a signal to employers that they need to remain cognizant of the technological advances that are emerging to make it easier than ever to record hours worked. The U.S. Department of Labor even has an app to assist employees in independently tracking their hours, breaks and overtime.31
As a consequence of new technology, more cases are being filed about alleged entitlement to overtime compensation. A few representative cases follow:
● Kuebel v. Black & Decker.32 The plaintiff in this putative collective action was a Black & Decker employee whose job duties included travelling to various Home Depot stores. Black & Decker required this employee to synch his company-issued personal digital assistant (PDA) with Black & Decker’s server, which he would do several times a week by plugging it into his home computer. The employee sued for overtime compensation relating to his at-home work as well as other compensation issues. The employee admitted he never reported the overtime being claimed (and he thus submitted false timesheets) but testified he did so at his supervisor’s instruction. The court ruled the actual time spent working at home could be compensable and represented a fact issue for trial.
● Allen v. City of Chicago.33 Plaintiff Chicago police sergeant brought a wage-hour collective action claiming that he and other similarly-situated employees were required to use employer-issued PDAs and other electronic communication devices to perform work outside of normal working hours without receiving compensation, including overtime compensation. The court denied the City’s motion to dismiss because “whether the amount of time plaintiff worked off the clock is greater than a de minimis amount . . . is a matter of the proof of his claim, not a matter of the sufficiency and plausibility of his complaint.” The court questioned “the ability to treat on a class basis the broad range of situations in which police personnel may ‘respond’ to messages that are sent to them on PDAs, the extent to which those responses might constitute ‘work,’ and the extent to which work might not be compensable because it is ‘de minimis.’”
● West v. Verizon Communications, Inc.34 A personal account manager for Verizon sought overtime compensation on behalf of herself and all similarly situated meployees for work allegedly performed remotely using a company-issued BlackBerry. The court denied the collective action, but in a subsequent order, the court held that there were genuine issues of material fact whether the employee had worked the hours claimed. The difficulty for Verizon was that it had not required such employees to keep track of their work time nor did it track the hours these employees worked. Accordingly, when Verizon submitted evidence of Ms. West’s hours worked in the form of a list of the calls (incoming and outgoing) made on her BlackBerry (including the length of each call) and a list of the call log entries made by Ms. West on the Verizon website (including how many words each call log entry consisted of), Ms. West simply submitted her testimony that she did not work exclusively by BlackBerry. Considering the conflicting evidence, the court found that there was a fact issue.
Some employers have now adopted policies that explicitly require all non-exempt employees to record all of their time worked, even if it is just checking emails on their telephones. Such a policy also could prohibit employees from working “after hours,” thus prohibiting employees from checking emails on their phones. If an employee violates such a policy, the employee could be subject to disciplinary action. While this may seem harsh, with more collective actions being authorized by trial courts, large employers face ever increasing potential liability.
III. Obesity as a Disability
In the Equal Employment Opportunity Commission’s (EEOC) original ADA regulations, the EEOC determined that “except in rare circumstances, obesity is not considered a disabling impairment.”35 Cases generally required an individual to show some different underlying medical condition that is a disability and that causes obesity as a “symptom.” After the adoption of the Americans With Disabilities Act Amendments Act of 2008, the EEOC’s regulations still provide that “[t]he definition of the term “impairment” does not include physical characteristics such as . . . weight, . . . that are within “normal” range and are not the result of a physiological disorder.”36 Nevertheless, it is interesting to note that the EEOC may now consider obesity a disability under the ADAAA.
In 2010, in a case arising prior to the ADAAA, the EEOC filed a lawsuit in Louisiana against an employer, claiming that it had terminated an employee because of obesity. In a somewhat surprising ruling the federal district court sided with the plaintiff, finding that severe obesity may qualify as a disability, regardless of the cause.37
Lisa Harrison was slightly over five feet in height and weighed 527 pounds when she was fired from her job in 2007 at a Louisiana drug addiction treatment center. She had been hired in 1999 and at that time, Ms. Harrison weighed more than 400 pounds. She contended in her EEOC charge that she was “discriminated against in violation of the Americans with Disabilities Act (ADA), in that [she] was regarded as having a disability.” Ms. Harrison passed away on November 1, 2009, and the official cause of death listed on her death certificate was morbid obesity. Additionally, her death certificate listed hypertension, diabetes and congestive heart failure as other “significant conditions contributing to death.” While the court noted that Ms. Harrison was a qualified individual with a disability under the ADA, it noted that she “was severely obese, which is an impairment under the ADA [and] she was actually disabled as a result of her severe obesity because of the resulting diabetes and heart problems.” Additionally, there was evidence that Ms. Harrison “was regarded by Defendant as being substantially limited in the major life activities of walking, being mobile, and working,” and the court noted there was “sufficient evidence that supports the notion that [Defendant] regarded her as disabled based upon her supervisor's comments.” The key contested issue for trial was whether Ms. Harrison's disability was the cause of her termination from Family House.38 What is noteworthy about this case was that the EEOC filed suit on Harrison’s behalf and took an expansive view of obesity as a disability.
Not surprisingly, after the ADAAA’s effective date in 2009, the “regarded as” prong of a disability claim based on obesity is now an easier threshold than under pre-ADAAA case law. In Lowe v. American Eurocopter,39 a federal district court in Mississippi held that an obese receptionist, who alleged that her weight affected her ability to walk, could proceed with her “regarded as” having a disability claim40 because her former employer harassed her based on her use of disabled parking. She also alleged that (i) her weight affected the major life activity of walking (she was “unable to park and walk from the regular parking lot”); and (ii) her “[e]mployer was informed of this situation [referring to her obesity and her inability to walk from the regular parking lot].” The Court read this allegation as an attempt by the plaintiff “to show that her employer regarded her as having such a disability.” The court noted that under the ADAAA, an individual is now not required to demonstrate that the disability she is regarded as having is an actual qualified disability under the ADA or that it substantially limits a major life activity41; rather, the ADAAA requires a plaintiff to only show “that he or she has been subjected to an action prohibited under this chapter because of an actual or perceived physical or mental impairment whether or not the impairment limits or is perceived to limit a major life activity.” Thus, a plaintiff now might be considered disabled due to obesity under the ADA if an employer perceived the employee’s weight as an impairment.42
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