The Supreme Court today released opinions in two much-anticipated cases addressing the rights of same-sex couples.

Hollingsworth v. Perry (pdf) addressed the validity of Proposition 8 – a 2008 California ballot initiative that amended the state’s constitution to define marriage as a union between a man and a woman. A federal court in San Francisco found the initiative unconstitutional and the Ninth Circuit Court of Appeal affirmed. Proponents of the initiative then sought review in the Supreme Court.

The Supreme Court declined to address the dispute on its merits, concluding that the parties seeking to have Prop 8 enforced lacked standing to do so. The litigation was originally filed against the State of California and various state officials. When they declined to defend the law, Prop 8’s sponsors stepped in. But according to the Court, those sponsors did not have a direct stake in the outcome sufficient to allow them to appeal the decision of the District Court. Since the petitioners lacked standing, the Court concluded that it lacked jurisdiction to decide the issue. The ruling leaves in effect the District Court decision that Prop 8 was unconstitutional.

California thus will become the thirteenth state to recognize same-sex marriage. The others are Connecticut, Delaware, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, Rhode Island, Vermont, Washington, and California. The District of Columbia also recognizes same-sex marriage.

Chief Justice Roberts wrote the opinion and was joined by Justices Scalia, Ginsburg, Breyer, and Kagan. Justice Kennedy wrote a dissent (joined by Justices Thomas, Alito, and Sotomayor) arguing that the case was properly before the Court and should have been decided on its merits.

In United States v. Windsor (pdf), the Court declared unconstitutional key provisions of the federal Defense of Marriage Act (DOMA). DOMA, enacted in 1996, defines “marriage” as a legal union a man and a woman as husband and wife. The term “spouse” refers only to a person of the opposite sex who is a husband or wife.

The case arose when Edith Windsor challenged the federal government’s refusal to allow her to use an estate tax exemption for surviving spouses following the death of the woman she married under New York law. Windsor argued that DOMA, in excluding same-sex spouses from the definition of marriage, deprives her of her constitutional right to equal protection. The majority agreed, stating that “the principal purpose and the necessary effect of this law are to demean those persons who are in lawful same-sex marriages.”

Justice Kennedy wrote the opinion, joined by Justices Ginsburg, Breyer, Sotomayor, and Kagan. Chief Justice Roberts and Justices Kennedy, Scalia, and Alito each wrote dissents (with Scalia’s being particularly spirited – referring to the majority opinion at one point as “legalistic argle-bargle”).

The ramifications of these decisions will be sorted out in the months and years ahead. Here are some of the issues to watch for.

Employee Benefits

DOMA limited the term “spouse,” when used in the Internal Revenue Code, ERISA, and myriad other federal legislation, to someone of the opposite gender to whom you were legally married. So when an ERISA-qualified plan used the term “spouse,” it would exclude legally married same-sex partners. Many plans decided on their own to include same-sex partners in their definition of “spouse,” but this created a tax issue. While employee benefits provided in a qualified plan were not generally considered “compensation” for tax purposes, that portion of benefits provided to same-sex partners was treated as compensation. So employers had to report the value of the benefit provided to the same-sex partner on the W-2 of the employee spouse.

With that portion of DOMA invalidated, this issue of taxation under the federal scheme may now be resolved. A plan that defines spouse as including a same-sex partner can treat the entire benefit as a non-taxable event. But it also brings into focus some specifics not previously considered. For example, spouses generally have a right to distributions from an employee’s retirement plan (for example a 401(k)) and spousal waivers are required to make someone other than a spouse the designated beneficiary for that plan. Now, every plan that is subject to spousal restrictions (most commonly retirement plans) conceivably has to consider the same-sex spouse as a default beneficiary and apply the spousal waiver rules. This may require plan administrators to change how they approach administrations of plan

Finally, there is the question of how to administer benefits for same-sex partners married in a state that recognizes same-sex unions, when the plan and plan sponsor are in a state that does not. The Supreme Court’s decision in not clear as to whether the definition of “spouse” in an employee benefit plan can be limited based on the state where the plan is domiciled. The federal tax issue may be somewhat resolved, but the eligibility and application to benefit plans generally remains muddled. So it would be inappropriate at this stage to say all plans must now cover same-sex spouses regardless of what state the plan is in. However, if your plan does define “spouse” as including same-sex partners, it appears that the opinion makes it easier to manage your plans for taxation purposes. The information in this section comes from Keith McMurdy. For more information, pay attention to him on the Employee Benefits blog.


Department of Homeland Security Secretary Janet Napolitano has already announced that her department will allow legally married U.S. citizens to petition for green cards and visas for their same-sex spouses. For a more detailed analysis of how the Windsor decision impacts immigration law, check out this post by Alka Bahal on Immigration View.

Employment Law

Extending benefits to opposite-sex spouses, but not same-sex spouses is already illegal in several states (including California). Now in other states that recognize gay marriage, employers will need to extend benefits they provide to spouses to same-sex spouses. Affected laws include:

  • The Family and Medical Leave Act (FMLA– The right to take time off to care for a spouse with a serious health condition now extends to legally married same-sex spouses.
  • The Consolidated Budget Reconciliation Act (COBRA) – COBRA requires private employers with 20 or more employees to offer continued group health coverage to employees and their covered dependents under certain circumstances, such as termination. Same-sex spouses will need to receive the same COBRA continuation rights as their opposite-sex counterparts.
  • Health Insurance Portability and Accountability Act (HIPAA– Health plans that cover spouses will need to offer enrollment when a participant marries a same-sex spouse.

Employers will need to pay close attention to government agencies as they announce new rules and procedures in response to today’s rulings. But these are, indeed, historic developments.