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Minnesota businesses seen as winners in DOMA decision

The change will give the state’s employers a competitive advantage in recruiting and retaining talent.

Wednesday’s U.S. Supreme Court decisions regarding same-sex marriage were greeted as major victories for both Minnesota's LGBT residents and its business community.
REUTERS/Jonathan Ernst

Scouring the fine print in conference rooms and on conference calls, Minnesota’s legal community greeted Wednesday’s U.S. Supreme Court decisions regarding same-sex marriage as major victories for both the state’s LGBT residents and its business community.

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“There are still things we’re going to have to figure out,” said Morgan Holcomb, a professor at Hamline University’s School of Law. “But life is definitely going to be easier in marriage-equality states.”

Each decided by a single vote, the two opinions were issued on the 10th anniversary of Lawrence v. Texas, the landmark Supreme Court decision striking down the nation’s sodomy laws. Although neither of the new rulings declared a constitutional right to same-sex marriage, the practical implications are likely as sweeping.

Starting Aug. 1, the day same-sex marriage becomes legal here, all married Minnesotans will have the same access to federal rights and benefits enjoyed by opposite-sex couples. The change will give the state’s employers a competitive advantage in recruiting and retaining talent.

riskin photo
Sarah Riskin

“If a good part of your employee population now has a better benefit situation in one state versus another, that’s a significant factor,” said Sarah Riskin, a labor and employment attorney at Nilan Johnson Lewis in Minneapolis.

Expect challenges in prohibiting states

At the same time, the language of the broader of the two opinions, striking down the central plank of the federal Defense of Marriage Act (DOMA), seems to invite further legal challenges from gay-rights advocates in states where same-sex marriage is prohibited.

Finally, Wednesday’s ruling hands the White House broad discretion to decide how to define marriage in the more than 1,000 federal laws and policies where it’s relevant.

“The Obama administration can now go in and say, ‘We’re going to define marriage a certain way for Social Security purposes,” Holcomb said by way of example. “A thousand times the administration is going to have to go through and define marriage.”

Depending on how the decision is interpreted in coming weeks, citizens may be able to obtain green cards for non-citizen same-sex spouses, a change that would affect tens of thousands of couples.

Widowed same-sex spouses could gain access to Social Security survivor benefits of up to $5,700 a month. And the Social Security Administration could decide to recognize common-law marriages in states where same-sex marriage is not legal.

Same-sex spouses may no longer be subject to income taxes on employer-sponsored health care. And like Edith Windsor, the plaintiff in the DOMA case, those whose home state recognizes their marriage will no longer face higher estate taxes. 

Employers to make policy revisions

Locally, employers have about a month to start what should be a full-scale revision of their policies and benefits procedures, said Riskin. Employers should look carefully at their employee handbooks, anti-discrimination policies and benefits rules. The goal: To make sure requirements are the same for all couples.

“The very basic idea is that same-sex couples who are married under state laws will be treated the same as opposite-sex couples,” she said. “There are a lot of employees who are married elsewhere who are suddenly going to be married here on Aug. 1.”

The high court’s decision not to take up the merits of the second case, a challenge to Prop 8, means Minnesota companies with employees in California also need to pay attention as same-sex marriages are again allowed there.

If employers do not require those in traditional marriages to provide documentation, they can’t ask same-sex couples to prove they were married, for instance.  

Provisions granting benefits to same-sex domestic partners but not unmarried opposite-sex partners may now run afoul of Minnesota’s Human Rights Act, which prohibits discrimination on the basis of sexual orientation, said Katie Connolly, Riskin’s colleague.

And special care needs to be paid to communicating to all employees, said Riskin. “There will be people who have not been out at work who will be coming out now,” she said.

Many unknowns

Unclear is whether second-parent adoptions will still be necessary for married LGBT couples. In practice, most non-biological same-sex parents will probably still adopt to ensure their rights in states where their marriages are not recognized.

Also unknown are such details as whether the DOMA decision will stop states that don’t have marriage equality from adopting relationship recognition that falls short of marriage, such as civil unions, said Holcomb.

“Moving is going to be really confusing and challenging,” she said. Minnesota snowbirds will have an especially tough time figuring out the tax implications of their decisions. Those who reside here legally will have to pay state taxes, while those who move to a Sun Belt state without same-sex marriage will be subject to that state’s estate tax.

In his dissent in the DOMA decision, Chief Justice John Roberts went to great lengths to insist that the court had not found a right to marriage equality. “We may in the future have to resolve challenges to state marriage definitions affecting same-sex couples,” he said.

‘He doth protest too much’

“Methinks he doth protest too much,” said Holcomb. The majority opinion that the central section of DOMA violated the Fifth Amendment’s due process and equal protection guarantees would seem to constitute a wide-open door for future challenges from states where same-sex marriage is prohibited, she and others opined.

That would mean states that chose to defend their bans would have to prove their laws do not discriminate by articulating some kind of justification beyond singling out one group or class of people, she explained.

“And there is a litany of things that are going to be harder for couples in non-marriage-equality states,” said Holcomb.