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Overturn of DOMA Opens Policy Options for Employers

The ruling’s impact may be greatest for smaller businesses that don’t have comprehensive coverage packages for LGBT workers.

August 8, 2013

The Supreme Court’s ruling in June that struck down the 1996 Defense of Marriage Act, popularly known as DOMA, should have a major effect on efforts to advance lesbian, gay, bisexual and transgender rights in the workplace. It means married gay and lesbian couples are now entitled to the same federal benefits as heterosexuals.

But what exactly does progressive policy for gay and transgender employees look like today, and how can companies achieve it?

Gay and lesbian activists say there are obvious models for companies looking to enhance benefits and policies to attract and retain LGBT employees. Many large employers have for several years gone well beyond existing legal requirements to provide those benefits. The ruling’s effect may be greatest for smaller businesses that don’t have comprehensive coverage packages for LGBT workers, said Todd Solomon, a partner in the Chicago office of the law firm McDermott Will & Emery, with an expertise in benefits for domestic partners.

As a result of the DOMA ruling, gay couples married in states that recognize domestic partnerships will have a clear path to benefits on par with their heterosexual colleagues. However, 35 states don’t recognize same-sex marriage, so it’s still unclear how legal requirements will play out for domestic partner benefits, Solomon said.

“We’re still in a complicated place,” added Selisse Berry, CEO of Out & Equal Workplace Advocates, a San Francisco-based advocacy group for LGBT workers. “But the ruling certainly moves the dial forward, not only for those who are protected, but it sets up more of an expectation that more and more LGBT people will be looking for equal treatment.”

The Human Rights Campaign, a civil rights group for LGBT Americans based in Washington, D.C., provides a glimpse of what a progressive benefits package might look like. The HRC Foundation in 2002 launched a Corporate Equality Index to rank large corporate employers on their efforts to secure the dignity and equality of LGBT employees.

In its first year, 13 businesses received a top score of 100 percent. In 2013, 252 companies had a 100 percent ranking.

Many of the top-ranking companies have recently extended policies to transgender employees. There has been a recent push to recognize gender identity disorder in benefit plans and, at a minimum, provide coverage for sex reassignment procedures and hormone treatments.

The Supreme Court ruling will also push employers toward what had been a small but developing trend of offering a tax gross-up of health insurance benefits for domestic partners, Solomon said. Domestic partners will also qualify for estate tax exemptions and head-of-household deductions. Gay spouses can also file their federal tax returns jointly and can qualify for the Family Medical Leave Act to care for an ill spouse. Domestic partners married to legal residents can apply for green cards and visas.

In its 2013 rankings, the Human Rights Campaign reported that a majority of Fortune 500 companies offered both sexual-orientation and gender-identity protections against discrimination in their employment policies. In 2002, just 3 percent of companies included gender identity in their nondiscrimination policies. By 2013, that percentage jumped to 57 percent. The percentage of companies including sexual orientation in their nondiscrimination policies grew from 61 percent in 2002 to 88 percent in 2013.

Dallas-based AT&T Inc. is consistently ranked near the top of HRC’s rankings, and the communications giant was one of the first companies to offer domestic partner benefits, beginning in 1998, said Theresa Bates, the company’s lead diversity consultant. In 2002, AT&T first began offering transgender employee benefits, and by 2011 all employee populations were eligible. “There’s been a long tradition at AT&T of supporting diversity and inclusion,” Bates said. “We just believe it’s a productivity game-changer when you can come to work and be your true self.”

Mining and metals company Alcoa Inc., which has also been highly ranked by HRC, has for many years offered health care coverage to LGBT employees that allows their dependents and spouses to be treated the same as dependents and spouses of heterosexual employees. Still, the company wanted to stand out even further as a leader in attracting and retaining LGBT workers.

As a result, Alcoa launched an employee resource group called EAGLE, or Employees at Alcoa for Gay, Lesbian, Bisexual and Transgender Equality. From the group’s inception in 2007, heterosexual employees were encouraged to join as “straight allies.”

Through an internal online forum, heterosexual employees frequently post comments in support of EAGLE, which is helping to build momentum. Today, 80 percent of EAGLE’s 400 members are heterosexual, says Molly McGovern, global co-leader of EAGLE and a project manager of business excellence and corporate strategy projects at Alcoa.

While there are a total of 61,000 Alcoa employees worldwide, EAGLE has the fastest-growing membership of any affinity group and company leaders have been thrilled with the growing level of support for it companywide. By having so many heterosexuals involved in the group, LGBT employees “can bring their whole selves to work,” McGovern said. That’s a key factor, given that a recent study from the Center for Talent Innovation reports 48 percent of LGBT employees are still closeted at work, and 58 percent report hearing derogatory comments and jokes at work.

Meg McSherry Breslinis a writer based in the Chicago area. Comment below or email editors@workforce.com. Follow Workforce on Twitter at @workforcenews.