The Exxon Mobil Corp., which has drawn much criticism for policies related to its gay and lesbian workers, said Friday that it would extend health insurance and other employee benefits to married same-sex couples effective Tuesday.
The move is an about-face for the company, which had defied pressure from human rights groups, pension funds and some of its own shareholders that had asked the company to protect gay and lesbian employees from discrimination in the United States. But Exxon Mobil’s latest change of heart on same-sex benefits was not a result of soul-searching. Rather, the company said it was following the policies of the federal government, which, in recent months, has begun to issue rule changes and guidance on how gay couples should be treated in light of the Supreme Court’s monumental decision in June to strike down the Defense of Marriage Act.
The decision found that gay couples who are legally married were entitled to the same federal benefits as straight couples.
Last week, the Labor Department, which oversees employer-based retirement, pension and health insurance plans, issued its own guidance: It said that all legal same-sex spouses are entitled to the same protections as opposite-sex spouses. But it’s also important to note that employers aren’t required to provide medical spousal benefits at all. But if they do, the agency said that same-sex spouses should be treated equally.
The oil giant, whose benefits cover 77,000 workers and retirees in the United States, said it has always looked to national laws for guidance.
“Spousal eligibility in our U.S. benefit plans has been and continues to be governed by the federal definition of marriage and spouse,” the company said in a statement. It also said that it provides benefits to same-sex spouses in 30 countries outside the United States.
Several federal agencies have begun to provide guidance on the practical implications of the highest court’s ruling. Last month, for instance, the Internal Revenue Service said same-sex couples would be considered married for federal tax law purposes, even if they live in a state that doesn’t recognize their union.
The Labor Department law that governs many employee benefits, known as ERISA, or the Employee Retirement Income Security Act, states that a plan can offer health coverage without including spouses.
In fact, some experts note that there are no explicit laws that prohibit a company from offering health benefits only to opposite-sex spouses. But “it’s in employers’ interest to simply adopt one standard, recognizing all married couples for benefits, and avoid potential litigation,” said Brian Moulton, legal director at the Human Rights Campaign, a group that works for equal rights for gay, lesbian, bisexual and transgender people.
Some legal experts say Exxon’s move could prompt other companies that must follow ERISA rules, but don’t have same-sex benefits, to follow suit.
There are certain protections that must be applied to all spouses, gay and straight alike. If an employer offers a pension to its employees, for instance, all spouses are entitled to survivor benefits, explained Todd Solomon, a partner in the employee benefits practice group at McDermott Will & Emery and author of “Domestic Partner Benefits: An Employer’s Guide.”
Wal-Mart was another large company that did not offer domestic partner benefits, but it announced in August that it would begin extending coverage to both same-sex and opposite-sex domestic partners and same-sex spouses effective Jan. 1.
Exxon is facing a legal complaint in Illinois filed by Freedom to Work, a gay advocacy group, which claims the company discriminates based on sexual orientation.
“Exxon is not the kind of company that voluntarily does the right thing,” said Tico Almeida, president of the group. “They only do the right thing when the law requires them to.”
Alan T. Jeffers, an Exxon spokesman, said the group’s complaints are baseless and without merit. He also said the company has a “zero-tolerance policy” on all forms of discrimination, including sexual orientation.
In countries where it’s mandated by law, Exxon Mobil does have policies barring discrimination against gay and lesbian employees.
Exxon said in a statement that it “will recognize all legal marriages for the purposes of eligibility in U.S. benefit plans to ensure consistency for employees across the country.”
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But critics say their policies do little to protect the gay and lesbian employees here in the United States.
Exxon Mobil ranks last in the Human Rights Campaign Corporate Equality index of the Fortune 1,000 corporations, with a score of negative 25 out of a possible 100. The low score stems from “not satisfying any of the criteria and actively resisting the shareholder resolutions to amend their non-discrimination policy,” said Deena Fidas, Human Rights Campaign’s director for the workplace project.
Even when the Defense of Marriage Act was still the law of the land, many companies offered health benefits to its employees’ same-sex partners and spouses anyway. Some employers even went as far as paying for the taxes gay employees had to pay on the value of their partner’s coverage (the tax no longer applies because the Defense of Marriage Act was ruled unconstitutional this summer).
According to the Human Rights Campaign, about 62 percent of the Fortune 500 companies offer domestic partner benefits. Exxon never extended the benefits to gay employees’ domestic partners.