Some NY businesses cheer DOMA’s Repeal

Advocates for same-sex marriage hailed the U.S. Supreme Court’s repeal Wednesday of the Defense of Marriage Act as a step forward not only for civil rights, but also for a host of businesses.

The decision allows married same-sex couples to receive federal benefits afforded traditional married couples, including tax perks, health-insurance benefits and the right to inherit and transfer property between spouses. Some counts have put the number of benefits previously denied to such couples at more than a thousand.

“We see this as a big step forward to creating equality, not only at the altar but also in the workplace,” said Darren Spedale, the founder of StartOut, a nonprofit that promotes LGBT entrepreneurship.

In February, 278 businesses filed an amicus (“friend of the court”) brief arguing that the act, known as DOMA, imposes “unnecessary cost and administrative complexity” on employers, and “forces us to treat one class of our lawfully married employees differently than another, when our success depends upon the welfare and morale of all employees.”

Firms that signed the brief include tech heavyweights Apple Inc., Facebook Inc. and Google Inc.; financial firms such as Citigroup Inc., Morgan Stanley and Ernst & Young as well as retailers, nonprofits and municipalities.

Of the costs they mention, the most significant might be health insurance. In the last few years, companies including Barclays, McKinsey and Bain & Company began to reach into their own pockets to compensate for the tax hit that same-sex married couples suffered when adding a spouse to the employer’s health plan.
Gilt Groupe, an online luxury retailer, is one such company. The firm, which signed on to the brief, is headquartered in New York and has 1,100 employees in three countries.

“We give our married same-sex couples the same benefits as to all married couples,” said Kathy Leo, the company’s Chief Legal & People Officer. “We’ve made a policy decision that we want to treat all our married couples the same way,” she said. She added that Gilt will be reviewing its benefit policies this week, in light of the Supreme Court decision.

(Gilt tightly guards the information on which employees are in same-sex marriages. “It’s something that not even supervisors are aware of, just something the HR department administers,” said Ms. Leo.)

Compensating for a lack of federal benefits is an expense that not all businesses can bear. “When you look at companies nationwide, the cost is large,” said Ms. Leo.
“Many large employers have those policies, but they’re expensive, and many small and mid-size companies don’t do that,” said Hunter Carter, a partner at Arent Fox, who specializes in civil rights.

DOMA’s repeal will help level the playing field between small and large businesses, he explained.

“Everybody, whether they level up or they don’t, is going to find it easier to give same-sex couples the benefits they deserve,” he said. “It’s going to be cheaper for the ones who level up. And it’s going to be administratively easier for the companies who don’t do it.”

For many signatories to the brief, civil rights were a large part of the issue.

“For me, it’s really about justice,” said Sarah Durham, the founder of Big Duck, a communications firm that works exclusively with nonprofits. “I wouldn’t discriminate against people when I’m hiring. Why would I discriminate in my HR policy?” she said.

Big Duck offers a “standard small business” benefits package, said Ms. Durham, which includes health and dental plan and a basic IRA. Employees can add a spouse to their health plan, and though several of the company’s 17 employees are in same-sex marriages, none has attempted to add a spouse, Ms. Durham said.

“We haven’t had to cross that bridge,” she said.

With DOMA dead, they never will—a change that makes it easier for the firm to grow.

“It’s one less administrative thing to think about,” said Ms. Durham.