Delivering discrimination: FedEx is among the companies refusing benefits to married gay employees in Massachusetts. The firms blame the federal government for their own decision to discriminate.

In May a small group of friends and family gathered in Cambridge, Mass., to watch John Richard and Tom Cerruto officially get married after being together for nine years. "It really was a simple thing," Richard says. "We all went out for Mexican food afterwards."

The ceremony may have been simple, but--like hundreds of stone-sex couples in Massachusetts--Richard is finding out that a legal marriage still doesn't guarantee gay and lesbian couples the same health benefits as their straight counterparts. Richard applied for spousal health benefits from his employer, NStar Corp., Massachusetts's second-largest electric utility. The company--where Richard has worked for 19 years and currently serves as a cost-accounting technician--had always offered health benefits to employees' spouses. But NStar is extending only domestic-partner benefits to married, nonunion gay and lesbian employees. Union employees don't even get that. Company officials argue that even DP benefits, which are not equivalent to those extended to straight married employees, must be won through collective bargaining.

"Frankly, it was a real slap in the face," says Richard, a member of Local 369 of the Utility Workers Union of America. "The thought had never crossed my mind that once we were legally married we wouldn't be treated equally."

The companies that are refusing to give equal benefits to all of their married employees are some of the largest employers in the United States. They include FedEx, the package and shipping company, and General Dynamics, the defense contractor. Adecco, the temporary employment agency, and Caritas Christi Health Care have also turned down their gay employees' request for the same spousal benefits other employees receive.

The Massachusetts supreme judicial court's November 2003 marriage ruling, which took effect May 17, suggested that all marriages should be treated equally, adding that the commonwealth may not deny the "protections, benefits, and obligations conferred by civil marriage to two individuals of the same sex who wish to marry." But FedEx and the other companies argue that the state court's ruling does not apply to the health benefits they offer their employees. Instead, they cite federal law as an excuse to allow them to discriminate.

The companies' arguments derive from the laws that regulate the kind of insurance they offer. Rather than paying a separate insurance provider to cover their employees--which would be regulated by state law--these films offer self-insured health plans, in which the company itself pays employee medical bills (typically supplemented by employee contributions, deductibles, and copayments). Those plans are subject to regulation under the federal Employee Retirement Income Security Act of 1974--not state law. Such plans are often used by larger companies with offices in several states to avoid the hassle of conflicting local insurance laws.

The companies argue that because the so-called Defense of Marriage Act in 1996 limited marriage to opposite-sex couples under federal law, they don't need to recognize Massachusetts's same-sex marriages in their federally regulated health plans.

Additionally, only 35% of companies in Massachusetts plan to give retirement benefits to employees' stone-sex spouses, according to a survey released in December conducted by the consulting firm Segal Co. and the New England Employee Benefits Council. Most retirement benefit plans--generally sponsored directly by companies--are also regulated by ERISA.

"ERISA trumps state law in tiffs case," says Kenneth Thorpe, the head of Emory University's Department of Health Policy and Management. "Even if state law considers all marriages the same, the company is not obligated to offer benefits to anyone."

While that is tree, experts say, the decision is still up to the companies themselves: Though not legally bound to offer health or pension benefits, if they wanted to include married gay employees' spouses, they could make them eligible as domestic partners without violating any federal laws. "Under ERISA a company can choose to define who is eligible for benefits," Thorpe notes.

In fact, some of Massachusetts's largest employers with self-insured health plans did change their policies to offer equal benefits after same-sex marriage was legalized. Those companies included Gillette, National Grid USA, and Unite Here.

But at least one company, Caritas Christi--affiliated with the Boston Roman Catholic archdiocese--went out of its way to continue to offer unequal benefits. Right after the state supreme court ruling in favor of marriage equality, Caritas dumped an insurance plan that would have covered all married couples in favor of a self-insurance plan that allows discrimination. The company thereby dodged slate laws that would have forced it to offer equal benefits to married gay employees at its six medical facilities. "We have to be faithful to the teachings of the church," says Caritas spokeswoman Diana Franchitto.

FedEx--which employs several thousand people in Massachusetts and manages eight separate companies--is the most high-profile corporation refusing to extend equal benefits to its workers' legal spouses. The decision to discriminate is not surprising: Only one of the Memphis-based company's units, FedEx Kinko's, even offers domestic-partner benefits.

"FedEx Express benefits plans defines 'spouse' in the same way that it is defined under the federal law, a person of the opposite sex who is a husband or wife," FedEx spokeswoman Sally Davenport wrote in a statement e-mailed to The Advocate. "Use of the federal definition creates uniformity between benefit plans and the federal income tax code under which these plans are governed."

What Davenport doesn't say, notes Michele Granda, an attorney with Boston-based legal group Gay and Lesbian Advocates and Defenders, is that FedEx could offer equal benefits if the company wanted to. "These companies are using DOMA to hide behind like a kind of smoke screen. Federal law doesn't require companies to deny married couples benefits. These companies are deliberately choosing to discriminate."

GLAD is looking into employees' legal options at FedEx and other companies and encourages married gay couples to call its hotline--(800)-455-4523--if they've been denied equal benefits. Granda says she doesn't think the problem necessarily requires legal action. "It is more an education issue than a legal issue," she says. "Once people know that companies have the discretion to provide benefits to anyone they want to, the choice to deny these gay employees' spouses will seem mean-spirited. I have every confidence these companies will provide these benefits once the public understands the full issue."

In the meantime, Richard's partner must go elsewhere--and probably pay much more--for health coverage. Richard's union local advised him to file a grievance report and has supported him completely, he says. The next step is arbitration. In meetings held with NStar Corp. so far, Richard was told the marriage law is so new that his employers are still reviewing their policies. "I asked them, 'Since when is marriage new? From the start of this company, married people get health care benefits.' They never did answer my question."

One positive development that has come out of the ordeal, he says, is that colleagues have expressed total support for his marriage and his right with the company. "My coworkers took this all in stride. They actually threw me a bridal shower, and since I'm not a very feminine guy we thought that was too funny," Richard says. "They keep saying, 'What is the big deal? Give them benefits just like every other married couple.' Their automatic acceptance of our marriage shows me that there may be hope for all of us."

Christensen is an investigative associate producer for CNN.