U.S. District Judge Phyllis Hamilton, a Clinton appointee, refused on Monday to throw out the case in a 19-page decision despite objections from the shipping company that withholding the benefits is justified because the Defense of Marriage Act was in effect at the time the employee died.
“The court finds that plaintiff has adequately alleged that FedEx has violated Title I of ERISA by acting contrary to applicable federal law and failing to provide plaintiff with a benefit mandated by ERISA, and that she is entitled to pursue equitable relief to remedy that violation,” Hamilton wrote. “The court is not persuaded at this stage of the case and under the facts alleged in the complaint that there is any basis for denying retroactive application of Windsor.”
The lawsuit was filed in January 2014 by Stacey Schuett, who was told by FedEx she wouldn’t be eligible for company survivor benefits after her partner, Lesly Taboada-Hall, was diagnosed with terminal cancer. Taboada-Hall had been a FedEx employee for 26 years and was fully vested in her pension.
The company plan on benefits comports with the Defense of Marriage Act, which prohibited federal recognition of same-sex marriage before it was struck down by the Supreme Court in 2013.
The couple, who had been together 30 years, married on June 19, 2013 in their Sebastopol, Calif., home in before their two children, close family and friends. Taboada-Hall died one day later on June 20.
The U.S. Supreme Court struck down the Section 3 of DOMA in a historic decision six days later after the wedding, but that wasn’t enough for FedEx to afford the benefits to Schuett.
“It is shocking to me that a company that pays lip service to diversity and the importance of its employees refuses to recognize our family,” Schuett said in a statement. “My wife earned her benefits during her decades of service to the company. No employer should be permitted to ignore our families and refuse to provide the hard-earned benefits of dedicated and skilled employees like Lesly.”
In the latest Human Rights Campaign Corporate Equality Index, FedEx received a score of “85” out of 100, receiving points for an LGBT-inclusive non-discrimination policy and affording same-sex spousal benefits.
Schuett made three claims in her lawsuit. The first sought payment under the plan itself, but the judge denied this claim on the basis that “it is undisputed” at the time of Taboada-Hall’s death, the FedEx pension plan defined spouse using the DOMA definition. Another claim sought payment on the basis FedEx didn’t disclose fully they would withhold benefits to Schuett, but the judge denied this claim as well.
The claim that succeeded relied on the Employee Retirement Income Security Act, or ERISA, which the Labor Department interpreted after the DOMA decision to grant same-sex spouses access to pension benefits. Because Edith Windsor, the plaintiff in the DOMA case, retroactively received her refund of $363,000 in estate taxes following the Supreme Court decision against DOMA, the judge reasoned ERISA benefits should be retroactively applied as well.
Representing Schuett was the National Center for Lesbian Rights, the Berkley-based Feinberg Jackson Worthman & Wasow, the Berkley-based Civil Rights Education & Enforcement Center and the Sebastopol-based Birnie Law Office.
Amy Whelan, senior staff attorney for the National Center for Lesbian Rights, said FedEx’s position amounts to attempting to restore a law the Supreme Court struck down as unconstitutional in 2013.
“Companies that claim to support diversity, as FedEx does, should be celebrating the downfall of DOMA, not trying to resurrect it for widows of FedEx employees who are fighting to receive the basic benefits their spouses earned during decades of service to the company,” Whelan said.
Nina Wasow, an Oakland-based attorney who also represents Schuett, chided FedEx for relying on DOMA to refuse survivor’s benefits to lesbian widow.
“The June 2013 U.S. Supreme Court decision established once and for all that DOMA was an unconstitutional law,” Wasow said. “The fact that FedEx continues to rely on it as a defense in this case is not only legally wrong, it’s shameful.”
Jennifer Caccavo Cordeau, a FedEx spokesperson, said the company is reviewing the court decision.
“The court has dismissed two of Ms. Schuett’s three claims,” Caccavo Cordeau said. “We are reviewing the court’s ruling on the remaining claim and will consider our options on that portion of the decision.”