US Supreme Court’s Mount Lemmon Fire District case impact on small business employee benefits

The US Supreme Court decision issued last week in the case of  Mount Lemmon Fire District v. Guido et at. appears to have employee benefit implication to some small business. In general, federal employment laws and specifically employee benefit laws, include applicability provisions that often exempt small business employers or modify the compliance requirements. This case court affirms that a small business employer that is part of a larger entity is treated as a larger employer for such determination purposes.

Violations of federal employee benefit law commonly trigger tax consequences and rarely, as in this legal case, violations of other types of employment law trigger other liabilities to the employer. The message appears to be simple: a small business that is part of a larger umbrella organization should not consider itself exempt from the law but should consider the employment law requirements of the larger overall organization.

Two points worth noting:

1. This case was about age discrimination. It does not automatically apply to other federal employment laws.
2. The case was decided unanimously; a rare occurrence in a sharply politically divided court.