Will the recent U.S. Supreme Court decisions impact tribal employers?

Yes.

Let’s discuss three United States Supreme Court decisions which generated lots of press and may have an impact on your work as a tribal employer.

Same Sex Marriage

In United States v. Windsor the Supreme Court struck down or invalidated a portion of the Defense of Marriage Act.  DOMA declared that marriage for federal government purposes was a union between a man and a woman.  The Supreme Court ruled that a portion of DOMA violated the Constitution on equal protection grounds holding that the effects of DOMA unlawfully discriminated against people based on sexual orientation.  The facts of the case revealed that a woman inherited money from her late same sex spouse whom she had married in New York, a state which recognized the marriage.  The federal government (IRS) did not recognize the marriage and levied $363,000 in estate taxes on the widow, but had the widow’s spouse been a man, the tax burden would have been zero.

The impact of Windsor will be felt in connection with the Family and Medical Leave Act.  Remember, tribal employers have an argument that the FMLA does not apply but there is an argument that it does apply.  If the FMLA applies, the Windsor decision will change the previous rule which declared that an employee’s leave to care for a family member with a serious health condition did not extend to same sex spouses.  Now, employers must grant leave to qualified employees who care for same sex spouses afflicted with a serious health condition.

A second impact of Windsor is the calculation of income for health care benefits provided to the same sex spouse of your employee.  Previously, the extension of benefits to an employee’s same sex partner generated federal income tax to the employee.  Under Windsor, if an employee’s same sex partner is considered a spouse under the relevant state law, the partner’s benefits will not be considered as part of the employee’s gross income.  Consult your tax professional on the impact of Windsor before making any modifications to your existing protocols.  Please review your benefit documents (policies, SPDs, etc.) to ensure they reflect the change in the law.  Also, whether there will be retroactive application of these laws will be the likely subject of future IRS guidances.

Harassment

The implications of two United States Supreme Court decisions regarding harassment deserve some attention not because they directly impact the rules applicable to on-reservation tribal employers (in most instances) but because of the way the decisions will impact how we think about harassment.  Remember, Title VII of the Civil Rights Act of 1964 does not apply to on-reservation activities of tribal employers unless the tribe has agreed to follow Title VII through a funding agreement, compact or it applies through another mechanism.

In Vance v. Ball State University the Supreme Court narrowed the definition of supervisor in its analysis of whether the employer should be responsible for the acts of an employee who allegedly slapped, threatened and used racial epithets in referring to Ms. Vance.  If the offending employee was Ms. Vance’s supervisor, the Court could hold the University responsible for the supervisor’s conduct, but if the offending employee was not Ms. Vance’s supervisor, the University would escape responsibility.  The Courts call this vicarious liability when the employer is held responsible for an employee’s offensive behavior.  The Court rejected the EEOC’s expansive definition of supervisor and ruled that supervisory authority includes the power to make a significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities or a decision causing a significant change in benefits.  Under the Court’s ruling, the definition of supervisor is a more difficult standard to meet and will therefore limit some claims.

Even though the University escaped responsibility under the Court’s decision, employers should condemn race based (and any other protected class) harassment by adopting strong policies, providing good training and enforcing these policies in the workplace.

In a second Title VII case, the Supreme Court addressed the standard for retaliation.  A Doctor Nasser of Middle Eastern descent complained to his employer that he was harassed by another doctor based on his religion and ethnic heritage.  Dr. Nasser alleged that as a result of the harassment, he was denied further employment opportunities with the hospital and the lower courts agreed with him.  However, the Supreme Court rejected his claim when it found that the harassment may have been a motivating factor in the employment decision, but it was not the reason for the employment decision.  Note that in discrimination cases under Title VII which are not retaliation cases, the “motivating factor” test is still relevant therefore if an employee can prove that a negative employment decision was wholly or in part motivated by unlawful discrimination, even if there are other legitimate business reasons for the decision, the employee can still prove a case of discrimination.  There has been an increase in retaliation claims and this ruling will likely make it more difficult for employees to successfully pursue these claims.

Recommendations:  Obtain legal and tax advice before relying on this analysis.  As to Windsor, evaluate your policies and practices to determine if they are consistent with the change in the law.  As to the Vance and Nasser decisions, promulgate strong policies which preserve your employees’ civil rights and enforce the policies when violated.

About the Author:

Richard McGee is a lawyer in Minneapolis, Minnesota who focuses his practice on gaming, gaming regulation, tribal employment and litigation in tribal, state and federal courts.  Richard has the privilege of working with tribes and tribal organizations on Human Resources matters including training.  Additionally, tribes ask Richard to address specific topics while incorporating the tribe’s related laws and policies into the sessions.  This is an invitation to engage Richard to produce and facilitate training for your tribe.