How will recent US Supreme Court rulings affect the workplace?

These rulings will limit companies’ liability for harassment by apparent bosses without full hire-and-fire authority, and will complicate employer benefit plans as applied to same-sex couples, who will have new rights under current employment laws.

Definition of Supervisor under Federal Employment Civil Rights Laws

On June 25^th, in Vance v. Ball State University, the U.S. Supreme Court clarified the meaning of “supervisor” for purposes of the Civil Rights Act of 1991.  The Supreme Court defined a supervisor as an individual “empowered by the employer” to make major employment decisions like “hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits.”

Companies only bear responsibility for harassment when the harasser ranks as a supervisor, or when they negligently allow harassment by non-supervisors.  To qualify as a supervisor, the harasser must have authority to hire, fire or reassign the employee, or significantly change the employee’s benefits.  When a harassing supervisor takes one of these actions against an employee as part of the supervisor’s illegal harassment, liability automatically attaches to the company.  When a harassing supervisor does not take such an action but harasses an employee in less tangible ways, the employer can defend liability if it has an effective policy and procedure to prevent and stop the harassment that the employee unreasonably failed to utilize.

The Court specifically rejected EEOC guidance that defines “supervisor” broadly as anyone with the “authority to direct the employee’s daily work activities.”  From now on, harassment by these low-level managers will fall into the same category as co-worker harassment, for which employers will only bear responsibility if they act negligently in controlling working conditions.

Overturning the Defense of Marriage Act

On June 26^th, the U.S. Supreme Court, in United States v. Windsor, overturned Section 3 of the federal Defense of Marriage Act (DOMA), which prohibited the federal government from acknowledging same-sex marriages. Employers should now be prepared to offer benefits to same-sex spouses living in the 12 states and the District of Columbia that allow same-sex marriage, including:

• Permitting employees to take family and medical leave to care for an ill same-sex spouse;
• Offering COBRA continuation coverage to same-sex spouses;
• Treating employees’ same-sex and opposite-sex spouses the same for purposes of benefits extended to spouses governed by federal law (ERISA), including extending coverage to same-sex spouses under tax-exempt health insurance family plans; and
• Recognizing same-sex spouses for purposes of determining surviving-spouse annuities and death benefits under employer pension and 401(k) plans.

These rules only apply to same-sex spouses who were married in and live in a state where same-sex marriage is legal.  However, subsequent guidance by the IRS may require employers in states that do not recognize same-sex marriage to provide benefits to same-sex couples who live in such a state after marrying in a state that allows same-sex marriage.  In the meantime, employers will need to amend their benefit plans to clarify how the company will treat same-sex spouses, and what it will do in situations where the couple was married in a state that recognizes the marriage but live or work in a state that does not.