Corporate reactions to the reversal of Roe v Wade may continue to be muted for a reason
What has corporate America’s response been to the reversal of Roe v Wade? Decidedly mixed, due to political, legal, economic and religious issues.
Employers should be mindful of the potential risks associated with sponsoring out-of-state abortions / Gayatri Malhotra
The US Supreme Court’s decision to overturn Roe v Wade, declaring that the constitutional right to abortion – which had been the law of the land for nearly half a century – no longer exists has spurred varying reactions from states and corporate America. Certain states acted swiftly to restrict abortion, while others pledged to be a safe haven for health care providers and individuals who received an abortion within their borders.
Like other political or social issues that have garnered public attention in recent years, some employers have responded by issuing a public statement or offering certain benefits to their employees. Shortly after the decision came down, Dick’s Sporting Goods announced that it would reimburse employees up to $4,000 for expenses incurred in traveling to a different state to obtain an abortion. Other companies subsequently made similar announcements, including Amazon, Apple, Google, JPMorgan Chase, Microsoft, Netflix, Yelp, Citigroup and Reddit.
However, numerous other companies have remained largely silent on the issue, potentially concerned about both the legal and economic implications of weighing in on this hotly contested and politicized social issue. According to a new survey from The Conference Board, a not-for-profit business membership and research group organization, only 8% of companies have made a public statement about the Supreme Court’s decision to overturn Roe v Wade, with many companies choosing to address the decision internally or not at all.
While some employers may feel compelled or pressured to take a stance, doing so certainly carries risks, ranging from retribution from stakeholders and tax implications to civil and criminal liability. Hence, companies that previously have been more vocal on other social issues have taken a more muted response to the debate on abortion rights. There is a risk that states that have laws in place making abortion illegal might try to penalize or punish businesses offering abortion-related benefits.
Texas and Oklahoma get tough on abortion
Lawmakers affiliated with the Texas Freedom Caucus (TFC) have proposed legislation that would bar employers operating in Texas from paying for elective abortions or from reimbursing employees for abortion-related expenses, regardless of the state and law of the jurisdiction in which the abortion is performed. Texas’s law currently bans most abortions after six weeks and allows private citizens to sue individuals who “aid or abet” a prohibited abortion for at least $10,000 in damages for each abortion performed. Law firm Sidley Austin recently received a litigation hold letter from the TFC in response to Sidley Austin offering travel-related abortion benefits to its employees, accusing it of violating Texas law. Oklahoma has also enacted similar legislation to Texas.
Companies are weighing such risks in making their decisions on how to proceed. Part of that analysis also takes into consideration a recruitment and retention element. For instance, certain companies have voiced concern that employees might not want to continue to live or work in a state with restrictive measures in place, which in turn could affect their ability to recruit and retain top talent.
Employers offering abortion-related benefits may argue that state laws “relating to” such benefits are preempted under the Employee Retirement Income Security Act of 1974 (ERISA). However, employers should proceed judiciously as it is not clear at this time whether this is a viable defense, and it may depend on whether civil or criminal liability is alleged and the type of plan, such as if the plan is self-funded. It is also important to note that most employers do not have the seemingly unlimited resources enjoyed by large companies such as Amazon and Microsoft to defend against these lawsuits.
Dick’s Sporting Goods gets accused of foul play
Employers’ obligations under federal, state and local anti-discrimination laws may also be implicated. For example, Title VII of the Civil Rights Act of 1964 (Title VII), as amended by the Pregnancy Discrimination Act, prohibits sex discrimination on the basis of pregnancy, childbirth and related medical conditions, which can include abortion. According to guidance from the US Equal Employment Opportunity Commission (EEOC), employers are prohibited from discriminating against employees based on their decision to have (or not have) an abortion.
In July 2022, after Dick’s Sporting Goods announced its travel reimbursement benefit, the America First Legal Foundation (AFL), a not-for-profit organization, sent a letter to the EEOC asking it to open an investigation into Dick’s, arguing that its benefit violates Title VII because it provides increased compensation to pregnant employees who choose to have an abortion, while denying equivalent compensation to pregnant employees who choose not to have an abortion (mothers). In a separate letter to Dick’s, the AFL called its decision “wholly detached” from its business of selling sporting goods and golf apparel, which “may needlessly destroy shareholder value.”
With the state of abortion laws rapidly evolving, employers should be mindful of the potential risks associated with sponsoring out-of-state abortions. While much still remains unclear, one thing is for certain: we are likely to see litigation on this issue.
Marisa Sandler is an employment lawyer and litigator at Tannenbaum Helpern Syracuse & Hirschtritt LLP. Contributors to this story include Maryann Stallone and Adam Belkebir.