Case tests DOMA’s impact on private company pension plans

Shannon Minter

In a first of its kind case, a federal judge in Philadelphia Monday (March 12) heard arguments on whether the Defense of Marriage Act (DOMA) precludes a private company from recognizing a same-sex marriage when it comes to the distribution of an employee’s survivor benefits.

The Philadelphia-based law firm of Cozen O’Connor, which boasts “extensive” experience in family law litigation, asked the U.S. District Court for the Eastern District of Pennsylvania to determine whether the parents or the surviving spouse of one of its attorneys, Ellyn Farley, should receive the assets from her profit-sharing pension plan with the firm.

Farley died of cancer in September 2010, four years after marrying  Jennifer Tobits in Canada. The couple lived in Chicago and Farley was reportedly estranged from her parents, Joan and David Farley of Virginia. Shortly after Farley’s death, Tobits and the parents began fighting over who has the right to claim Farley’s pension benefits. The value of the benefits is estimated at just over $37,000. While over a small amount of money, the legal ramifications are quite large.

Tobits, represented by the National Center for Lesbian Rights (NCLR), argued that Illinois new civil unions law recognizes same-sex marriages licensed in other jurisdictions and Farley’s law firm’s pension plan provides for benefits to be directed to an employee’s spouse.

The parents, represented by attorneys from the Thomas More Society, a public interest law firm, argued that, while an opposite sex spouse “has the right to prevent an employee from designating benefits to anyone other than” his or her spouse, DOMA requires the employee to designate benefits to “their partner, their parents,” or anyone else. The parents contend that their daughter signed a form designating them as beneficiaries of the pension benefits.

The law firm said Farley failed to submit a clear statement designating her beneficiary and that DOMA precludes the law firm from recognizing Farley’s same-sex marriage in the distribution of its pension assets because the pension plan is regulated by federal law.

NCLR legal director Shannon Minter, who argued Tobits’ case Monday, said Judge Darnell Jones pressed Cozen’s attorney on why Cozen did not state in its pension plan that DOMA precludes recognition of same-sex spouses.

Peter Breen, executive director of the Thomas More Society, noted that the judge also questioned why Tobits could expect the Cozen plan’s definition of spouse would include same-sex spouses. Breen also noted that, on the day before she died, Farley signed her condominium over to Tobits, her pension plan to her parents, and “wrote checks to Tobits and the Farleys, giving each roughly half her bank account.”

The law firm has argued that the form designating the parents as beneficiary to the pension plan was deficient. Tobits has argued that Farley signed over the plan to her parents under duress the day before she died.

Breen said private companies can recognize same-sex partners in their retirement plans but DOMA prevents companies from “giving a same-sex partner of an employee the right to control the benefits decision of an employee.”

But Minter said that argument has “no legal basis.” And accepting that argument, said Minter, “would affect thousands and thousands of employers who are providing equal benefits to same-sex spouses.”

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