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Supreme Court Case Update

The Supreme Court issued three decisions in July, 2013 that affect employers. Here are the details your organization needs to know about the Court's rulings.

Defense of Marriage Act (DOMA) is Unconstitutional

The Supreme Court struck down the federal Defense of Marriage Act (DOMA) in United States v. Windsor on June 26th, 2013. Specifically, the Supreme Court, in a 5-4 decision, deemed that section 3 in DOMA is unconstitutional as it deprives individuals of equal liberty protected in the Fifth Amendment.

This decision may affect employee benefits for same-sex couples depending on the state. Specifically, federal benefits and protections provided to opposite-sex couples will be extended to employees in state-recognized same-sex marriages.

In only states that recognize same-sex marriages, federal laws governing employee benefits will apply and require employers to treat same-sex couples the same as opposite sex couples. For example, employers with pension and 401(k) plans may be required to recognize same-sex spouses to determine surviving spouse annuities or death benefits. Also, employers will need to offer COBRA continuation coverage to same-sex spouses. Further, employers may need to provide care to a same-sex spouse for a serious health condition under FMLA as a result of the 2013 Supreme Court ruling on DOMA.

Additionally, employers will no longer need to pay federal income taxes on the income charged for an employer’s contribution to a same sex spouse’s benefit coverage. Employees can pay for their same-sex spouse’s coverage on a pretax basis under a section 125 plan. Legally married same-sex couples are also subject to flexible spending account (FSA) and health savings account (HSA) rules (Source: Fisher & Phillips).

Definition of a Supervisor is Clarified

In Vance v. Ball State University, the Supreme Court clarified the definition of a supervisor as someone who can take a "tangible employment action" and make a “significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits,” affirming the 7th Circuit's definition of a supervisor.

In the case, the plaintiff sued her employer, claiming that a coworker made racist remarks to her and that she was discriminated against in the workplace. The Supreme Court upheld the Circuit court’s decision that because the individual was only a coworker and not a supervisor, and that her employer had taken corrective action against the coworker, that Title VII did not apply.

In the case, the Court rejected the Equal Employment Opportunity Commission (EEOC)'s definition of a "supervisor" as an individual who has the ability to exercise significant discretion over an employee's work. The Court found this definition to be too broad. The revised definition narrows the scope of an employer's liability for sexual harassment under Title VII of the Civil Rights Act.

Until the outcome of this case, it was unclear as to who qualified as a supervisor in terms of Title VII liability due to differing opinions by the circuit courts. This decision eliminates this confusion for employers.

Retaliation Claims Require a Higher Burden of Proof

In University of Texas Southwestern Medical Center v. Nassar, the Supreme Court held that proof of retaliation as the only reason that the employer acted as it did is required for Title VII retaliation claims. A plaintiff must be able to prove that retaliation was not just a “motivating factor” for an adverse action taken against them, and that retaliation directly caused an employer to take the adverse employment action.

In the case, the plaintiff had filed and won a few complaints of discrimination against his employer in the past. After he terminated his employment at the organization based on feeling discriminated against, when he applied for and was offered a different position at the same organization, his former supervisor protested him being hired, and the organization rescinded the offer. The plaintiff claimed that retaliation from his past discrimination claims was a motivating factor in his supervisor’s decision to block him being hired for the new position. The Court, however, rejected the plaintiff’s request to apply the lesser “motivating factor” causation standard.

Now, employee retaliation claims filed under Title VII of the Civil Rights Act of 1964 must be proved according to “but-for causation.” The Supreme Court has essentially rejected a lower standard of proof for employee retaliation claims under Title VII because a lower causation could lead to employees filing frivolous lawsuits to interfere with an employer's action. This ruling provides a stricter standard and makes it more difficult for individuals to sue organizations for retaliation and discrimination.

Please note that by providing you with research information that may be contained in this article, ERC is not providing a qualified legal opinion. As such, research information that ERC provides to its members should not be relied upon or considered a substitute for legal advice. The information that we provide is for general employer use and not necessarily for individual application.

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