Claim Based on Health Plan's Failure to Cover Same-sex Spouse Survives under Title VII as Sex Discrimination Claim: W.D. Washington

Practical Law Legal Update 4-582-8366 (Approx. 6 pages)

Claim Based on Health Plan's Failure to Cover Same-sex Spouse Survives under Title VII as Sex Discrimination Claim: W.D. Washington

by Practical Law Labor & Employment

Background

Both Michael Hall and Amie Garrand are employees of BNSF Northwest Division. In 2013, both Hall and Garrand legally married their respective same-sex partners in Washington State.

When Hall married his partner, Elijah Uber, Hall sought health benefits for Uber under BNSF's health plan. After getting married, Garrand also sought health care coverage under the same plan for her same-sex partner, Carol Garrand.

BNSF denied coverage for both Uber and Carol Garrand on the basis that its plan defined marriage as between one man and one woman and therefore provided coverage only for spouses of the opposite sex.

BNSF has since voluntarily provided coverage for same-sex spouses, effective January 1, 2014. Plaintiffs do not deny that they have received health benefits since that date.

However, based on BNSF's failure to cover same sex spouses in the period between the dates of their marriage and January 2014, plaintiffs assert claims under:

The Equal Pay Act (EPA).
The Employee Retirement Income Security Act (ERISA).
Washington's Law Against Discrimination (WLAD).

Defendant Michael Hall also asserts that BNSF violated Title VII by discriminating against him on the basis of his sex.

Specifically, Hall alleges that he:

"is a male properly performing his job, who experienced adverse employment action in the denial of the spousal health benefit, due to his sex, where similarly situated females were treated more favorably by getting the benefit. If Michael Hall were female, the benefit would be provided; BNSF provides it to female employees who are married to males but denied it to Hall who is married to a male."

BNSF argues that Hall's Title VII claim fails as a matter of law because Hall is really alleging a claim of discrimination based on his sexual orientation, not his sex, which cannot be maintained under Title VII. On Hall's motion, BNSF seeks to dismiss the Amended Complaint in its entirety.

Outcome

The district court held that:

Although it acknowledged that it is often difficult to distinguish sex discrimination claims made by people identifying as homosexual from claims based solely on alleged sexual orientation discrimination, it disagreed with BNSF's interpretation of Hall's Title VII claim and held that his claim is one based on sex discrimination not on his sexual orientation.
Plaintiffs have satisfied their initial burden of stating an EPA claim that is plausible on its face. Therefore the district court denied BNSF's motion to dismiss plaintiffs' EPA claims (BNSF's motion to dismiss was based on its same argument that Hall's claim fails as a matter of law because Hall is alleging a sexual orientation discrimination claim not a claim based on sex discrimination).
BNSF's arguments that plaintiffs' claims under the WLAD should be dismissed because they are preempted by Section 514(a) of ERISA, are based on its incorrect assertions that plaintiffs do not have valid sex discrimination claims under Title VII or the EPA. Plaintiffs have met their initial burden of making plausible Title VII and EPA claims. Therefore, the district court declined to dismiss plaintiffs' WLAD claims as preempted at this stage of the matter.
It agreed with BNSF that jurisdiction over the claims for benefits under ERISA, as currently alleged, lies with an arbitrator and not the district court. Therefore the district court dismissed the plaintiffs' claim for ERISA benefits due to lack of jurisdiction.
It denied BNSF's motion to dismiss plaintiff's prospective claims as moot because BNSF misconstrues plaintiffs' claim for prospective relief and plaintiffs have alleged plausible federal and state claims.

The district court found that BNSF's reading of Hall's claim as one of sexual orientation discrimination ignores the plain language of the Amended Complaint and improperly restricts the class of employees affected by the policy at issue in which Hall is a member. A careful reading of the Amended Complaint, construed in favor of Hall as the non-moving party, demonstrates that Hall alleges disparate treatment based on his sex, not his sexual orientation, specifically that he (as a male who married a male) was treated differently to his female coworkers who also married males.

The court also noted several cases in which similar claims were allowed under Title VII, including:

In re Levenson, where the Ninth Circuit found that:
- the denial of employee's request that his same-sex partner be made a beneficiary of his federal benefits was sex-based and therefore violated the plan's prohibition on discrimination based on sex or sexual orientation;
- employee was unable to make his spouse a beneficiary of his federal benefits due solely to his spouse's sex; and
- if his partner were female, or if the employee himself were female, he would be able to add his partner as a beneficiary.
(587 F.3d 925 (9th Cir. 2009).)
Heller v. Columbia Edgewater Country Club, in which an employee sued her employer alleging discrimination under Title VII. Specifically, the employee alleged that after her supervisor learned that she was a lesbian, she began subjecting her to harassing comments about her sexual orientation and ultimately terminated her after she complained about the harassing behavior. After the plaintiff sued, the employer moved for summary judgment arguing that Title VII was inapplicable because the claim was based on sexual orientation discrimination not sex discrimination. The Court disagreed, explaining:
"Nothing in Title VII suggests that Congress intended to confine the benefits of that statute to heterosexual employees alone. Rather, Congress intended that all Americans should have an opportunity to participate in the economic life of the nation.... A jury could find that [the supervisor] would not have acted as she (allegedly) did if Plaintiff were a man dating a woman, instead of a woman dating a woman. If that is so, then Plaintiff was discriminated against because of her gender."
(195 F.Supp.2d 1212 (D.Or.2002).)
Foray v. Bell Atlantic, in which both the EEOC and the district court accepted a plaintiff's allegation that an employee benefits policy designed to provide certain employees in same-sex relationships with coverage equivalent to that enjoyed by married employees was actually unlawful discrimination against him (an unmarried heterosexual with a domestic partner) on the basis of sex under Title VII (56 F.Supp.2d 327, 329 (S.D.N.Y.1999)).

As to BNSF's ERISA preemption argument, the court found that the ERISA preemption analysis for a state antidiscrimination law depends on whether employment practices that are unlawful under broad state law are prohibited by Title VII. If they are not prohibited by Title VII, the state law will be superseded (Shaw v. Delta Air Lines, 463 U.S. 85 (1983)). Because plaintiffs met their initial burden of making plausible Title VII and EPA claims, ERISA does not preempt their claims under WLAD.

However, BNSF's motion to dismiss plaintiff's ERISA claims because they are subject to arbitration under the Railway Labor Act (RLA) was granted because:

the district court was not persuaded by plaintiffs' argument that their ERISA claims had independent bases outside the terms of the collective bargaining agreement.
the plaintiffs' Amended Complaint specifically alleged violation of the terms of the plan which provided that the benefit to be paid.
the ERISA claims, as alleged in the Amended Complaint, lie with an arbitrator and not the district court.

The court also denied BNSF's motion to dismiss plaintiffs' claims for prospective relief as moot because BNSF started providing health benefits for same-sex spouses effective January 1, 2014. Plaintiffs seek an Order to determine whether health benefits for same-sex spouses in states where same-sex marriage is legal are mandated under current law and direct BNSF to provide health benefits to such same-sex spouses as a matter of right in the future. Plaintiffs have alleged plausible federal and state claims and the court cannot find at this time that their claims for such prospective relief are moot.

Practical Implications

Employers are already aware that Title VII does not provide a cause of action for sexual orientation discrimination and claims under ERISA for discrimination on the basis of sex in employment benefits have so far not been successful. However, employers should also be aware that claims made by gay plaintiffs who allege disparate treatment based on their sex or the sex of their partner will often be construed by courts as sex discrimination rather than (or as well as) sexual orientation discrimination claims. Rulings such as this one therefore give plaintiffs a chance to assert these sex discrimination claims under Title VII as well as under state law.

Claim Based on Health Plan's Failure to Cover Same-sex Spouse Survives under Title VII as Sex Discrimination Claim: W.D. Washington | Practical Law