Archive for May, 2012

DOMA Unconstitutional, First Circuit Holds

Strike another blow for equality under law irrespective of sexual orientation. The First Circuit U.S. Court of Appeals in Boston ruled today that the Defense of Marriage Act, which defines marriage as being between a man and a woman, is unconstitutional.

DOMA forbids the U.S. government from recognizing same-sex marriage. As long as the law is in force, same-sex couples cannot qualify for federal benefits, such as social security.

In this case, seven same-sex couples married in Massachusetts and three surviving spouses of such marriages brought suit in federal district court to enjoin pertinent federal agencies and officials from enforcing DOMA to deprive the couples of federal benefits available to opposite-sex married couples in Massachusetts. The Commonwealth brought a companion case, concerned that DOMA will revoke federal funding for programs tied to DOMA’s opposite-sex marriage definition–such as Massachusetts’ state Medicaid program and veterans’ cemeteries.

“Rather than challenging the right of states to define marriage as they see fit, the appeals contest the right of Congress to undercut the choices made by same-sex couples and by individual states in deciding who can be married to whom,” wrote Judge Michael Boudin.

Noting that gays and lesbians have long been the subject of discrimination, Boudin said  DOMA will “penalize” couples in same-sex marriages by “limiting tax and social security benefits to opposite-sex couples.” Therefore, the purported bases for DOMA need to be “scrutinize[d] with care.”

None of the rationales asserted by the law’s defenders passed constitutional muster, the appeals court concluded. For example, the rationale of preserving government resources can’t justify a distinction that is “drawn against a historically disadvantaged group and has no other basis.”

Second, there is “a lack of any demonstrated connection between DOMA’s treatment of same-sex couples and its asserted goal of strengthening the bonds and benefits to society of heterosexual marriage.”

Third, although “[f]or generations, moral disapproval has been taken as an adequate basis for legislation,” Lawrence v. Texas “ruled that moral disapproval alone cannot justify legislation discriminating” against homosexuals.

Finally, the appeals court commented, Congress didn’t simply “freeze” the situation, as DOMA has no expiration date and isn’t framed as a temporary measure.

However, the appeals court said it was not relying “upon the charge that DOMA’s hidden but dominant purpose was hostility to homosexuality.”

The Obama Administation isn’t defending the law anymore, but the courtroom–like nature–abhors a vaccum and there was no shortage of parties who submitted briefs both for and again in this case.

There’s little doubt that this case won’t find its way onto the U.S. Supreme Court’s docket. The high court is unlikely to ignore such a frontal assault on an act of Congress.

Here’s the ruling in its entirety.

 

 

Partnership Liable for Retaliation Against Partner, Calif. Appeals Court Holds

A partnership may be held liable under California’s Fair Employment and Housing Act for retaliation against a partner, a state court of appeals decided recently.

The case was brought by Mary Fitzsimons, an emergency room physician and partner with California Emergency Physicians Medical Group (CEP). Fitzsimons also served as one of CEP’s regional directors and was a member of its Board of Directors. As regional director, Fitzsimons reported to her supervisors that “certain officers and agents of CEP” had sexually harassed female employees of CEP’s management and billing subsidiaries. Thereafter, CEP removed Fitzsimons from her regional director position, although she continued to work as a physician and to serve on the board. Fitzsimons subsequently sued CEP for retaliation under the FEHA.

The court explained that because the partner was not an employee of the partnership, she could not sue the partnership for employment discrimination. However, the law’s plain language prohibits retaliation against any person, including a partner, who opposes or reports the sexual harassment of an employee.

Conn. Supreme Court Upholds Damages Award for Victim of Hostile Environment Based on Sexual Orientation

Employers in Connecticut can be held liable for damages under the state’s human rights act for failing to take reasonable steps to prevent their employees from being subjected to hostile work environments based on their sexual orientation, the Connecticut Supreme Court ruled this month.

The plaintiff, Luis Patino, commenced this action against the defendant, his former employer, Birken Manufacturing Company, claiming that it engaged in a discriminatory employment practice when it permitted his coworkers to harass him based on his sexual orientation over a period of many years.

Following a jury trial, the jury returned a verdict in favor of the plaintiff and awarded him $94,500 in noneconomic damages. The company filed postjudgment motions, claiming that: (1) the statute does not provide for hostile work environment claims; (2) even if does, the plaintiff presented insufficient evidence to support the jury’s finding of a hostile work environment; and (3) the award of damages was unsupported by the evidence and excessive.

Affirming, the high court said that the phrase ‘‘terms, conditions or privileges of employment’’ in the law constitutes a term of art with a fixed legal meaning, and the legislature’s use of that phrase in the statute evidences its intent to permit hostile work environment claims where employees are subject to sexual orientation discrimination.

It also found that the plaintiff’s evidence was sufficient to support the favorable verdict, givin his testimony indicating the detrimental impact of the harassment. Finally, the court held, the damages were appropriate given the harassment suffered.

Particularly if you’re in Connecticut–but even if you’re not–you’d be well advised to read this opinion as yet another indication that sexual orientation discrimination in the workplace should not be tolerated.

Republican NLRB Member Resigns; Critics Said He Released Private Information

Following criticism that he had released nonpublic information, National Labor Relations Board member Terence Flynn submitted his resignation late last week, the board announced on Saturday.

According to a report by the NLRB’s inspector general, Flynn, while a board employee, gave unpublished information, including a draft of a board decision, to a former agency member for personal gain.

Flynn, a Republican, will resign effective July 24 and recuse hmself from board business, the agency announced.

His resignation leaves the board with four members–one less than it needs to operate at full strength.

IRS Solicits Comments on Use of Electronic Media For Transit Benefits

Nothing in Washington, D.C. is ever final, which is why regulators and lobbyists will always have jobs. The latest indication of this is a notice the Internal Revenue Service issued on Friday asking for additional public comment on the use of electronic media (e.g. debit or credit cards, smart cards) to purchase qualified transporation benefits from employers.

Employers may offer such benefits tax-free to their employees under Section 132(f) of the Internal Revenue Code to allow them to pay for their commuting costs.

In 2006, the IRS provided guidance on these issues, but implementation was postponed in order to give transit systems additional time to modify their technology to comply with those requirements.

That time has now come and passed. The 2006 revenue ruling is now in effect.

The revenue ruling includes four situations that illustrate the tax treatment of arrangements under which employers use electronic media to provide employees with transportation benefits. These are:

  1. Employees distribute “smartcards” to their employees. Employees use the fare media value that is stored on these cards to pay for transportation on the local transit system.

  2. Employees furnish employees with debit cards. These debit cards are restricted for use only at merchant terminals at points of sale at which only fare media for the local transit system is sold. Employers make monthly payments to the debit card provider, which the debit card provider then allocates to each employee’s card.

  3. Employers provide employees with debit cards that employees can use to purchase transit benefits under circumstances in which vouchers or similar items exchangeable only for transit passes are not readily available. These debit cards are restricted for use only at merchants that have been assigned a merchant category code (MCC-restricted) indicating that the merchants sell fare media for the local transit system. The merchants may or may not sell other merchandise.

  4. The employer provides employees with the MCC-restricted debit cards before they begin work. Before using the MCC-restricted debit cards, employees must certify that the card will be used only to purchase transit passes. Further, written on each card is a statement that the card is to be used only for transit passes and, by using the card, the employees certify that the card is being used only to purchase transit passes.

It’s a little complicated, but the bottom line is that only situations one and two fully meet the IRS criteria for tax-advantaged treatment.

According to the notice for public comment, at the time Rev. Rul. 2006-57 was issued, the Treasury Department and the IRS lacked sufficient factual context to develop guidance regarding whether terminal-restricted debit cards were “readily available.”  The revenue ruling indicates that the IRS intends “to issue guidance clarifying under what situations the cards are considered to be readily available and thus preclude cash reimbursement for transit benefits.” In the interim, employers may use bona fide cash reimbursement arrangements when the only available voucher or similar item is a terminal-restricted debit card.

The IRS said it has now “become aware of changes in technology that may give rise to the need for additional guidance on the use of electronic media to provide transit benefits.”

In preparation for providing such guidance, the agency is asking for public comment on these specific questions:

  • how electronic media may meet the statutory requirements under section 132(f) for providing transit benefits, either as vouchers or transit passes or through bona fide cash reimbursement arrangements in a manner other than those described in situations one through four in Rev. Rul. 2006-57.
  • on the availability of terminal-restricted cards and any other electronic media qualifying as vouchers or transit passes for purposes of determining whether such items are readily available and, therefore, cash reimbursement arrangements for providing transit benefits should be prohibited; and

  • challenges employers encounter in transitioning from paper transit passes or vouchers to electronic media that qualify as vouchers or transit passes, or from cash reimbursement arrangements to electronic media qualifying as transit passes or vouchers.

The IRS is accepted comments through August 27.  To read the entire notice, which includes instructions for submitting comments, click here.

Court Holds CALPERS Must Cover Long-Term Care for Same-Sex Couples

Slowly but inexorably equality is coming to same-sex couples in the workplace, especially in the realm of employer-provided benefits. The latest example came Thursday, when U.S. District Court Judge Claudia Wilken ordered California’s massive state pension fund–CALPERS–to offer its long-term care insurance to same-sex spouses and partners.

Some 160,000 workers have purchased long-term care insurance through CALPERS. The coverage pays for stays in nursing homes or assisted living centers.

CALPERS had extened most benefits to same-sex couples, but said its hands were tied on the question of long-term care because of the federal Defense of Marriage Act. That law–which the Obama Administration says it will no longer defend–defines marriage as between a man and a woman.

CALPERS feared it would lose its tax-exempt status if it also extended long-term care benefits to same-sex partners.

However, Judge Wilkens struck down a portion of DOMA, clearing the way for CALPERS to make long-term care benefits available to its employees irrespective of whether they are in different or same-sex relationships.

N.J. Company Charged by DOJ With Retaliation Under Immigration Law

A New Jersey company is facing U.S. Department of Justice charges that it fired a receptionist because she protested its professed preference for foreign nationals with temporary work visas.

DOJ filed the suit against Whiz International LLC, an information technology staffing company in Jersey City, N.J., alleging it retaliated against the receptionist in violation of the Immigration and Nationality Act.

“The complaint alleges that the company directed an employee that served as a receptionist and a recruiter, to prefer certain noncitizens in its recruitment efforts and then terminated the employee when she expressed discomfort with excluding U.S. citizens and lawful permanent residents from consideration. The anti-discrimination provision prohibits employers from retaliating against workers who oppose a practice that is illegal under the statute or who attempt to assert rights under the statute,” the DOJ said.