US court proceeds with FedEx pension case

FedEx

In January 2016, a US District Court Judge allowed a pension benefits claim brought by the same-sex widow of a FedEx employee to proceed while dismissing two other claims by the plaintiff.

In the case of Stacey Schuett v. FedEx Corporation et. al., the plaintiff, Stacey Schuett, was in a relationship with Lesly Taboada-Hall, who worked for FedEx for 26 years.

The couple married in a civil ceremony on 19 June 2013, before licenses for marriages between same-sex couples were available in California.

Taboada-Hall was diagnosed with cancer in 2010 and took medical leave of absence in 2012. She passed away on 20 June 2013.

Taboada-Hall was a member of the organisation’s pension plan, which defined spouse as a person of the opposite sex according to the Defense Against Marriage Act (DOMA). This act was declared unconstitutional on 26 June 2013.

Schuett brought three claims against FedEx. Two of these were dismissed, including a claim that sought payment of surviving spouse benefits under the pension plan.

A claim that sought equitable relief, including payment of surviving spouse benefits for breach of fiduciary duty, has been allowed to proceed.

Meanwhile, in November 2015, the UK Court of Appeal upheld a ruling against a retired employee in his bid to see his civil partner, now husband, receive the same pension pay-out in the event of his death as a spouse of the opposite sex.

In the case of Walker vs Innospec and others, John Walker is a member of Innospec’s pension scheme having worked at the organisation from 1980 until his retirement in 2003.

The Civil Partnership Act 2004 came into effect in December 2005. Walker entered into a civil partnership in 2006 and has since married his partner.

Walker argued that if he were to die before his husband, his pension scheme would pay out a lesser sum than it would do if he were married to a partner of the opposite sex, and that this contravened EU law and the European Convention on Human Rights.

Walker’s appeal failed on the basis that the claim related to a period before civil partnerships were recognised and the law could not be applied retroactively.

Geoff Egerton, pensions associate at Linklaters, said: “The FedEx case is interesting because it shows that same-sex marriage issues are topical on both sides of the Atlantic. However, ultimately any US court decisions will not have any direct application here. They are useful as a potential point of comparison but the English courts are not bound by them.

“Conversely, with the Walker v Innospec and others case, it is a clear statement of the law by a higher court and permission to appeal was refused by the Court of Appeal. We are not aware of this case being appealed to the Supreme Court. Assuming that it is not appealed, unless Parliament decides to change the law on same-sex marriage and does so with retrospective effect, this will be a barrier to similar cases being brought in the English courts.”

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Helena Davies, professional support lawyer at Hogan Lovells, added: “Concerning Walker v Innospec, the court clearly took the view that this is a policy issue. The government reviewed survivors’ benefits in the light of the same-sex marriages legislation in 2013 and concluded that no changes were necessary.

“In practice, many schemes have decided to change their rules to equalise fully for civil partners/same-sex marriage. Because funding for survivors’ benefits depends on actuarial assumptions, it is hard to see how costs would increase significantly as a result. However, for those that have not done so, this decision confirms that employers and trustees can rely on the statutory exemption. This may be helpful if, in an individual case, paying out a benefit based on full service might not be a viable option.”