Schorr & Associates’ Employment Case of The Week ending December 9, 2016

Cote v. Walmart Stores, Inc., 1:15-cv-12945 (U.S. Dist. Mass.) (Settled December 2016)

Last week Walmart agreed to set aside $7.5 million to compensate employees who were injured by the company’s longstanding policy refusing to insure same sex spouses, even if they were legally married under State law.

The lawsuit was brought as a class action by Jacqueline Cote under Title VII of the federal Civil Rights Act of 1964. The Equal Pay Act of 1963, and the Massachusetts Fair Employment Practices Law.  Ms. Cote alleged that she had been working for Walmart since 1999.  In 2004, she and her female spouse were legally married under Massachusetts law.  Her spouse also worked at Walmart until 2008, when she left to care for Ms. Cote’s mother.  At that point, Walmart refused to insure her spouse due to Walmart’s policy of not insuring spouses of the same sex.

Ms. Cote’s wife had a history of cancer and was unable to get good insurance.  The Complaint alleges that Ms. Cote and her spouse have incurred at least $150,000 in uninsured health costs as a result of Walmart’s policy.  The Complaint chronicles Ms. Cote’s numerous attempts to convince Walmart to provide insurance, as they do for spouses of the opposite sex.  Even after the Supreme Court struck down the Defense of Marriage Act, Walmart held fast to their policy of not insuring same sex spouses.

Walmart changed its policy on January 1, 2014, but this lawsuit was filed within the statute of limitations on behalf of those persons who were legally married prior to January 1, 2014 and suffered damages as a result of Walmart’s anti-same sex policies.  It is believed that more than 1,100 persons may be eligible.  Under the deal, Walmart will fully reimburse current or former employees affected by its previous policy for the applicable out-of-pocket cost of their spouse’s health care from Jan. 1, 2011 to Dec. 31, 2013 if they submit documentation of the costs incurred. The company will also pay 250 percent of out-of-pocket costs for those who submit documentation for expenses of $60,000 or more in health care expenses for their spouse.

In addition, Walmart has committed to treating same-sex couples and opposite-sex couples the same when administering its health benefits.  Prior to this lawsuit, Walmart maintained that it had no legal right to do so.

The times are definitely changing for Federal law governing sexual orientation.  Even though Congress has refused to add sexual orientation to the protected classes under Title VII, Courts are granting that protection based upon the logical deduction that when you discriminate against a person because of their sexual orientation, you discriminate on the “basis of sex”, which is protected.

We are very concerned that Court appointments and the EEOC under a Trump administration will try to roll back some of these protections, but it may be too late, and there is now a body of law protecting the rights of the LGBT community.  Cases like this demonstrate that employers will be punished if they continue to enforce policies that discriminate on the basis of sexual orientation.