What Employers Should Do Now That Roe Has Fallen

Law360 (June 24, 2022, 8:39 PM EDT) -- The U.S. Supreme Court's decision on Friday to overturn Roe v. Wade presents major challenges for employers and health plans, experts say.

In upholding a Mississippi abortion ban and overturning precedent establishing a constitutional right to abortion, the high court's decision in Dobbs v. Jackson Women's Health allowed states to impose restrictions or outright bans on the procedure. That's quickly creating new liabilities for employers related to workers' health, discrimination protections, privacy and speech.

Abortion rights demonstrator Elizabeth White leads a chant in front of the U.S. Supreme Court on Friday after the court overturned Roe v. Wade, erasing the constitutional right to abortion. (Brandon Bell/Getty Images)

"It's an administrative and potentially employee relations nightmare for employers," said Sarah G. Raaii, an attorney at McDermott Will & Emery LLP. Raaii said she has fielded a flurry of questions from employers, before and after the Supreme Court opinion was released.

"It creates a lot of challenges for employers who just want to do right by their employees and continue offering these abortion benefits that they have historically done in the past," Raaii added.

Here are five things employers should do right now following the Dobbs decision.

Note Your Own Reaction

Houston-based Reed Smith LLP partner Emily Harbison said companies should first turn inward and think about their own position on this controversial social issue.

She said that gut check serves multiple purposes: to determine whether the company wants to make its position public and also to guide how they proceed internally.

"Their position on this is really the first step regardless of whether or not they speak about it publicly, because it will inform, I think, their review of their policies and what policies they may want to implement, that are new or revised or changed in order to become more in line with their position," Harbison said.

Having a clear position articulated will help companies, for example, if they have employees across multiple jurisdictions with varying levels of abortion restrictions.

"Even though the law is what it is, I think the company can still take a stand and revise policies that allow it to still comply with applicable state law but potentially support or not support their employees however they see fit," she said.

Morgan Lewis & Bockius LLP partner Sharon Perley Masling, who leads the firm's new Reproductive Rights Task Force, said employers must also determine soon whether they want to send a message to their employees about the Dobbs decision, which she called an "employer-specific" decision, and one she said probably doesn't carry much legal risk even in states with strict abortion restrictions.

"It would depend on what the communication said, but I'm having trouble imagining a communication that would rise to the level of 'aiding and abetting,'" she said. The "aid and abet" language is found, for example, in Texas' abortion ban, which allows civilians to fire off a legal action against those who help someone obtain an abortion.

Check the State Laws

Attorneys say the decision means a patchwork of new state laws restricting abortion will take effect, which employers now need to consider.

"I think if you're an employer, you have to read the room and then you have to read the law," said Florida-based attorney Michael Elkins, founder of MLE Law.

Already, 13 states had so-called trigger laws on the books to take effect either automatically or by quick legislative action to ban abortion the moment Roe was overturned, according to the abortion-rights group Guttmacher Institute, which also estimates 26 states are certain or likely to quickly block the procedure following the decision. 

Erin M. Sweeney, a partner at DLA Piper, said in an interview that a new wrinkle to appear after the opinion was released Friday came from clients asking the firm to track any future laws affecting state licensure over abortion access.

"What happens if states start to regulate those employers who are heavily regulated by the state? For example, if you're a cable company or if you're an oil and gas or utility provider, are the states going to try to put together laws that restrict those types of employers from being able to practice and utilize their license if they have these kinds of benefits?" Sweeney said.

Sweeney said even though such laws aren't on the books yet, clients are getting worried and asking, "Can you watch those state laws for us? Because we need to know instantly if our licenses might be in jeopardy."

Morgan Lewis' Masling said the firm has attorneys specializing in labor and employment, benefits, white collar, health care and privacy all chipping in to keep up with the "patchwork quilt" of U.S. abortion laws.

"This is definitely an all-hands-on-deck type of enterprise," she said.

Review Your Policies

Another early step for employers is to take stock of their policies in the post-Roe light, said Reed Smith's Harbison. For example, they should look at their social media policies and their dress code or uniform rules, so they're clear on how to handle employee reactions and activism, such as wearing buttons or T-shirts to work.

"So if an employee shows up with a pro-Roe v. Wade button, and you have another employee show up with a pro-Dobbs button, you kind of know what you're going to do with that — or not do with it," she said.

Another company rule to check would be the relocation protocols, in case employees want to move to offices or telework in other states with different abortion restrictions than where they're currently based, she said.

MLE Law's Elkins floated the idea of employers in states that restrict abortion quietly implementing a "don't ask, don't tell"-style policy in which, to limit liability, employees try to avoid telling the company if they're getting or have gotten an abortion.

"Which is bonkers to be talking about," Elkins said. "It feels very 'Handmaid's Tale,'" referring to the dystopian novel in which fertile women are forced to have children.

Benefits attorneys say after the draft opinion leaked in May, some companies started planning ahead on how to provide workers access to abortions in states where the procedure was at risk of becoming illegal.

Raaii said an important first step for employers is to determine what kind of health plan the company offers, because it impacts the degree to which state laws restricting abortion apply.

In the case of self-funded plans where the employer assumes financial risk for providing care to its workers, federal preemption provisions under ERISA apply and block the application of state insurance laws that might limit abortion access.

That's not the case for fully insured plans, where employers buy coverage through a commercial insurer subject to state regulation. According to the Guttmacher Institute, this is how 11 states restrict abortion in private insurance plans.

But even in the case of self-funded plans, new laws from states criminalizing abortion likely would apply, Raaii said, because "ERISA preemption does not shield against criminal liability," referring to how generally applicable criminal laws are excluded from ERISA preemption.

"If employers are considering or potentially wanting to continue abortion benefits, it's important for them to immediately talk to their counsel to try to form a plan for at least mitigating some of the potential risks," Raaii said.

Check Employee Reactions

Another large part of employers' early response to the Dobbs ruling should center on employees' reactions to it, experts say.

"I think employers need to recognize that there will be a wide variety of opinions about today's decision, and I think it is perhaps most important that they communicate that everyone should be treated with respect," said Morgan Lewis' Masling.

Although the First Amendment right to free speech doesn't extend to the private workplace, employee expression can be covered by a number of other protections, including Title VII, which bars discrimination based on religion, and the National Labor Relations Act, which safeguards employees' ability to discuss the terms and conditions of their employment.

Harbison noted that the National Labor Relations Board under the Biden administration is vocally pro-union, and warned that the current NLRB would probably take an expansive view of what is considered "protected concerted activity." The agency would likely greenlight worker speech about employer positions or policies, or lack thereof, around the Dobbs decision, Harbison said.

Abortion is so deeply entwined with religion that employers also need to tread carefully around employees' speech in that arena and ensure their policies are applied equally across the board, Harbison said.

"I don't think there's like a 'super right'" for religious employees to speak up that others don't have, she said. "I do think it makes it a lot more muddy, and it gives employees another way to argue they were discriminated against."

Prepare for Legal Challenges

Amy Sheridan, employee tax benefits partner at Sullivan & Worcester LLP, said employers need to prepare for potential legal action if they want to keep abortion access in states with bans.

"We're talking about a situation where a state may be motivated to aggressively go after out-of-state conduct," Sheridan said. "I think that's what makes this different than other employee benefits that your plan might be offering."

Raaii of McDermott said the issue of whether ERISA preempts some of these self-funded plans from state restrictions still needs to be worked out.

"ERISA preemption is an issue that will be litigated and probably take years to work through the courts as far as how these abortion restrictions apply to self-funded health plans," Raaii said. "But just at the outset, it seems like a difficult argument to make, if there are criminal penalties, that ERISA shields a self-funded plan from these state restrictions."

Sheridan added that employers may face new legal risk in particular from state laws imposing civil penalties on any person or entity that aids or abets an abortion procedure. Two such laws are already in effect in Oklahoma and Texas.

The law might be used to target employers providing workers reimbursement to travel to a jurisdiction where the procedure is legal, which has quickly become a popular option companies are considering to preserve the benefit in states with bans.

As a result, "every employer's risk tolerance on this is going to be different, and every employer is going to have different business considerations they need to take into account," Sheridan said.

It's not yet clear how federal laws that bar discrimination against women and pregnant workers, such as Title VII of the Civil Rights Act and the Pregnancy Discrimination Act, will interact with state-level abortion bans, particularly those that criminalize the procedure, experts say.

Masling called them "novel questions of law." The Equal Employment Opportunity Commission declined to comment Friday on the Dobbs ruling.

For example, employers may have policies in place that allow for termination if an employee is convicted of a crime. It's not clear whether the anti-discrimination protections in Title VII would preempt that, Harbison said.

"I don't know how you reconcile the two, to be quite honest," Harbison said.

--Additional reporting by Jimmy Hoover, Anne Cullen, Braden Campbell and Tim Ryan. Editing by Orlando Lorenzo and Kelly Duncan.

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