Pa. Same-Sex Partner Ruling Raises Pension Issues
A federal judge granted retirement benefits to the female spouse of a woman who died three years ago in Illinois, a ruling that raises questions about the implications of the U.S. Supreme Court's recent gay marriage decision.
Judge C. Darnell Jones II ruled Monday that a 2006 Canadian marriage license and residence in a state that permits civil unions means Jennifer Tobits should collect about $40,000 earned by her late wife, Sarah Ellyn Farley.
Farley's parents pressed a claim for the proceeds of profit sharing from Cozen O'Connor, the Philadelphia law firm that employed Farley in its Chicago office. Farley had signed over those benefits to her parents the day before she died of cancer, but that form requires the spouse's permission and Tobits did not grant it.
Jones put the case on hold until after the Supreme Court determined on June 26 that portions of the federal Defense of Marriage Act were unconstitutional.
"Following the court's ruling, the term 'spouse' is no longer unconstitutionally restricted to members of the opposite sex, but now rightfully includes those same-sex spouses in 'otherwise valid marriages,'" the judge wrote.
The law firm initiated legal action to get the court's guidance to avoid paying the wrong party, not because it opposed Tobits as the benefits recipient, said Bob Fiebach, the firm's lawyer who handled the case. The dispute spawned claims and counterclaims, but it came down to a fight between Tobits and Farley's parents, David and Joan Farley.
Fiebach said companies may need to figure out if they should adopt a mechanism to cope with a shifting legal landscape and where employees can be married in one state, live in a second state and work for a company headquartered in a third state - each of which might have different laws about same-sex couples.
"I think employers will now look at their plans and talk to their tax lawyers and cover this," Fiebach said. "You want to have the same rule for every employee."
Peter Breen - senior counsel with the conservative Thomas Moore Society, a public interest law firm in Chicago, and a lawyer for Farley's parents - said they are likely to pursue the case further, possibly by an appeal, a request for reconsideration or a request for clarification.
Breen said Farley's death at age 37 in September 2010 occurred before the Illinois Legislature had taken up the civil unions bill that ended up taking effect the following June. He said Jones' decision opens the door to post-death pension benefit challenges in other states that have recently allowed gay marriage or civil unions.
"It could mean that if you're in a state where at death there was no same-sex marriage or same-sex unions or domestic benefits, your retirement benefits may now be due to a partner rather than others who have taken the benefits," Breen said. "It's an odd situation."
A lawyer for Tobits, Teresa Renaker, said "some very interesting problems" could arise as couples who were legally married in a state that permits same-sex marriages attempt to exert legal rights in states that do not.
She said employers and same-sex couples may need to reconsider previous retirement decisions, given the Supreme Court ruling.
Last week in Ohio, a federal judge granted a request by two gay men to have their out-of-state marriage license legally recognized, helping ensure they can be buried beside each other in a cemetery that only permits descendants and spouses.
In New York, state Comptroller Thomas DiNapoli said this week that Jones' decision will force large, private companies to recognize rights under legal gay marriages. DiNapoli, a Democrat, has used the clout of the $160.4 billion state retirement fund to propose shareholder resolutions that would expand the rights of gay workers in companies in which the pension fund has invested.
"The courts are knocking down the doors of discrimination," DiNapoli said. "It is my belief, which is confirmed by this decision, that it is a violation of federal law for those companies whose employee benefit plans are governed by (federal law) to exclude same-sex spouses from federally-mandated spousal benefits."