Walmart employee sues over denial of same-sex spousal health insurance benefits

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August 6, 2015 - Kate Halloran

 

A Walmart employee denied health insurance for her same-sex spouse has filed a class action lawsuit in Massachusetts federal court alleging gender discrimination. The suit comes on the heels of the U.S. Supreme Court’s decision in Obergefell v. Hodges legalizing same-sex marriage nationwide. Jaqueline Cote alleges that Walmart violated Title VII of the Civil Rights Act when it refused to extend employment-based health insurance benefits to her spouse, Diana Smithson, even though they were legally married under Massachusetts law and were otherwise eligible to receive coverage. In addition to damages, the plaintiff is seeking a permanent injunction against Walmart preventing it from denying same-sex couples spousal health insurance benefits that are available to other employees. (Cote v. Wal-Mart, Inc., No. 1:15-cv-12945 (D. Mass. filed July 14, 2015).)

Cote repeatedly attempted to enroll her spouse in Walmart’s health insurance plan, but hit a wall every time she used the online enrollment system and entered Smithson’s sex as female. When Cote called Walmart for assistance, she was told that coverage was not available for same-sex spouses. When Smithson, who was uninsured, was diagnosed with ovarian cancer in 2012, the couple incurred over $150,000 in medical debt for her treatment and hospitalizations. Even after the Supreme Court decision in United States v. Windsor, which struck down section 3 of the Defense of Marriage Act, Walmart continued to refuse Cote’s requests for spousal health insurance coverage.

The plaintiff alleges that Walmart “refused to provide spousal health insurance benefits for Jackie’s spouse because Jackie’s spouse is a woman, even though Walmart would have provided such coverage if Jackie’s spouse were a man or if Jackie were a man who was married to a woman.” The complaint continues that Walmart did not extend spousal health insurance benefits to Smithson because of sex-based stereotypes.

Allison Wright, an attorney with Gay & Lesbian Advocates & Defenders who is representing the plaintiff, said, “In the past, some courts have been reluctant to favorably rule on Title VII sex discrimination claims asserted by lesbian, gay, bisexual, or queer people because they viewed Title VII sex discrimination claims as a guise for sexual orientation discrimination claims, which are not explicitly prohibited under Title VII.  Such views discount the sex-based classifications involved in discrimination suffered by lesbian, gay, bisexual, and queer people.”

Walmart finally altered its policy effective Jan. 1, 2014, but has not compensated those who were denied benefits prior to that nor has the company stated that it is required by law to provide the benefits.

Cote filed a complaint last year with the Equal Employment Opportunity Commission (EEOC), which issued a decision in her favor on Jan. 29, 2015. The Commission found that Walmart’s “refusal to add [plaintiff’s] spouse to her health insurance coverage following their marriage constituted discrimination on the basis of her sex.” Walmart asserted that it has no legal obligation to provide same-sex spousal health insurance benefits and a state law requiring such would be preempted by federal law. As noted in the plaintiff’s complaint, this “creates significant uncertainty and insecurity . . . and constitutes ongoing sex discrimination,” if Walmart could rescind same-sex spousal health benefits at any time without fear of legal repercussion. On May 29, 2015, the EEOC issued a right to sue letter.

“With the exception of President Obama’s Executive Order prohibiting federal contractors and subcontractors from discriminating on the basis of sexual orientation or gender identity, there are currently no other federal laws, including Title VII of the Civil Rights Act, that explicitly prohibit discrimination on the basis of sexual orientation or gender identity, leaving the lesbian, gay, bisexual, transgender, and queer (LGBTQ) community more vulnerable to discrimination. Employment discrimination makes it harder for LGBTQ people to find and keep new jobs, earn a living, and provide for themselves and their families,” Wright said.

Wright noted that although the Obergefell decision does not guarantee equal employment rights for LGBTQ individuals, she hopes that “married same-sex couples will come forward to ensure employers like Walmart will provide equal benefits and treat married same-sex couples equally.”