Saturday, December 10, 2005

Can States Require Individuals to Buy Health Insurance: ERISA Preemption


A little while back there was an interesting discussion on the BENEFITSPROF listserv discussing whether a state can enact legislation which would require all individuals to buy health insurance. 

For instance, under a plan being considered in Massachusetts, employers either have to provide health insurance to their employees or pay a payroll tax; it's a "pay or play" plan. In other words, everyone will either have insurance or enough money to pay for their own health care through a government subsidy financed by the payroll tax. See Romney wants compulsory health insurance and another article here.

Besides the debate over whether such a law would be good public policy, one of the more interesting questions concerns whether such a state law would be preempted by ERISA.  On the one hand, the state law would most likely be considered to have a  "connection with" an employee benefit plan, meaning that even though after the Travelers case there is a presumption against the preemption of state laws that regulate "traditional areas of state concern," there is "too much" interference here (like FMC Corp., Egelhoff)  with employee benefit plans under the "pay or play" plan such that general ERISA preemption under Section 514(a) would apply. 

On the other hand, and taking into account ERISA's savings clause, the dual prongs of  the Miller test would certainly be met ((1) specifically directed towards entities engaged in insurance and (2) substantial affect on the risk pool), meaning that such a law would be saved from ERISA preemption. Indeed, the pay or play plan has a lot of the same hallmarks as the Any Willing Provider laws discussed in Miller. And although the recent Davila case seems to suggest a preemption "override" even when the savings clause applies if there exists conflict preemption and the state law expands the remedies available under ERISA Section 502(a), that doesn't appear to be the case here.

Finally, if the employer in question is self-insured (as an increasing number of employers are these days), FMC Corp. suggests that the state law would still be subject to ERISA preemption under the Deemer Clause of ERISA.

In all, I am of the opinion that under current Supreme Court precedent, a "pay or play" law such as Massachusetts' would not be preempted by ERISA for fully insured health plans (as it would only regulate the relationship between the insurer and third party providers), but would be preempted by ERISA in the case of self-insured plans.

All comments and thoughts welcome.

Hat tip: Jon Forman (who started this thread on the listserv).


December 10, 2005 | Permalink | Comments (0) | TrackBack (0)

New Labor and Employment Scholarship

SSRN's Employment and Labor Law Abstracts highlighted the following new and forthcoming articles yesterday:

1. Katherine Van Wezel Stone (UCLA), "Thinking and Doing - The Regulation of Workers' Human Capital in  the United States," Socio-Economic Review, Vol. 3, September 2005.

2. Paul M. Secunda (Mississippi), "Lawrence's Quintessential Millian Moment and its Impact on the  Doctrine of Unconstitutional Conditions," Villanova Law Review, Vol. 50, No. 1, pp. 117-162, 2005

3. Miriam A. Cherry (Hofstra/Cumberland), "How to Succeed in Business Without Really Trying (Cases): Gender  Stereotypes and Sexual Harassment Since the Passage of Title VII," Hofstra Labor and Employment Law Journal, Vol. 22, 2005

4. Stephen F. Befort (Minnesota), "Accommodation at Work: Lessons from the Americans with  Disabilities Act and Possibilities for Alleviating the American Worker Time Crunch," Cornell Journal of Law and Public Policy, Vol. 13.

Check them out!


December 10, 2005 in Scholarship | Permalink | Comments (0) | TrackBack (0)

Friday, December 9, 2005

NLRB Entry-Level Attorney Honors Program

The NLRB is accepting applications for its Fall 2006 Entry-Level Attorney Honors Program.   Placements are available at the Board Office in D.C., the General Counsel's Office in D.C., and at Regional offices in New York City, Buffalo, Cleveland, Brooklyn, Seattle, San Francisco, Oakland, and Los Angeles.   Applicants should be 3L law students, graduate law students, or judicial law clerks.  Appointees will be hired for a permanent position subject to a two-year probationary period and successful bar passage.  The application deadline is January 6, 2006; the NLRB will make employment offers in late January / early February for positions to begin in summer 2006.

Rick Bales

December 9, 2005 in Teaching | Permalink | Comments (0) | TrackBack (0)

The Answer on Delta

11 USC 103(h) provides that 11 USC 1167 applies only to railroads, not to airlines.  Therefore, 11 USC 1113 applies when an airline attempts to nuke a cba in bankruptcy court.  Sorry for any confusion.

Rick Bales

December 9, 2005 in Labor Law | Permalink | Comments (0) | TrackBack (0)

Katrina's Wrath Continues: The Tulane Story

From Inside Higer Ed:

The flooding from Hurricane Katrina has receded, and the Tulane University that was left standing has decided to be a smaller institution.

[Yesterday,] Tulane announced the cuts it is making in the face of $200 million in recovery costs and a projected budget shortfall next year.

The positions of 230 faculty members — 65 of them tenured, and 180 of whom are in the medical school — will be eliminated. Tulane is also cutting its athletic program from 16 teams down to 8. Five academic programs — four in engineering, plus exercise and sport science — will also go.

The professors whose jobs are being eliminated have the option of working at their salaries for one additional year, said Mike Strecker, a Tulane spokesman. But they will not receive additional payments and those who leave immediately will not be paid, he said.


[G]uidelines issued for institutions in “financial exigency” by the American Association of University Professors call for severance pay for one year for tenured faculty members who lose their jobs. Robert Kreiser, a senior program officer for academic freedom and tenure at AAUP, said that a year’s pay is a good way to give faculty members time to find new jobs.

For more details on this sad story, see A Smaller Tulane.

Paul M. Secunda

December 9, 2005 | Permalink | Comments (0) | TrackBack (0)

Is Delta/ComAir Barking Up the Wrong Tree in Dispute with Pilots?

Delta Airlines is in a Federal Bankruptcy Court in New York asking a bankruptcy judge to nuke a collective bargaining agreement with its pilots.  But Section 1113 of the bankruptcy code, which permits a bankruptcy court to reject most cba's, expressly exempts companies covered by the Railway Labor Act (which Delta is). Similarly, Section 1167 of the Bankruptcy Code provides that "neither the court nor the trustee may change the wages or working conditions of the debtor established by a collective bargaining agreement that is subject to the Railway Labor Act except in accordance with section 6 of such Act."  Section 6 of the RLA forbids unilateral modification of a RLA cba unless and until there has been final action by the Mediation Board.  The Mediation Board, in turn, is authorized to notify the President who may then create an Emergency Board; again, no unilateral modification is permitted for thirty days after the Board has investigated and reported to the President.

Thus, it seems to me that Delta is barking up the wrong tree.  The Bankruptcy Court has no legal authority to alter the terms of the Delta-ALPA cba.  As Justice Fortas said (dissenting) in Transportation-Communication Employees Union v. Union Pacific Railroad Co., 385 U.S. 157, 172-73 (1967), "[I]n the 'intricate and technical' field of railway [and airline] labor relations, no court, including this Court, should displace the agency which Congress has vested with authority . . ." -- i.e., the Mediation Board.  If Delta wants to change the terms of the bargaining agreement it has negotiated with its union, it should attempt to do so before the Mediation Board.  A decision by the bankruptcy court should be of no legal consequence.

Am I missing something?  Comments are welcome.

Rick Bales

December 9, 2005 | Permalink | Comments (0) | TrackBack (0)

Nearly 1 out of 6 Workers Claim Bias

This poll is just incredible. I don't know if we are becoming a more sensitive society overall, or perhaps just more sensitive to issues in the workplace.

The AP is reporting that "nearly one out of every six U.S. employees say they were discriminated at work in the last year, with women more than twice as likely as men to claim bias over hiring and pay, according to a new poll."

The story goes on to say: "The poll released [yesterday] by the Gallup Organization found that middle-aged women and minorities were more likely to report being victims. Out of the part-time and full-time workers interviewed by telephone, women were more than twice as likely to claim discrimination (22 percent) as men (9 percent)."

"Among racial groups, Asians and blacks led the pack (31 percent and 26 percent, respectively) in saying they were treated unfairly, followed by Hispanics (18 percent) and then whites (12 percent)."

Understatement of the day: "These data make it pretty clear that it makes good business sense to have operable diversity efforts in organizations," said Max Larsen, the Gallup Organization's government division partner."

Read the whole story here.

Paul M. Secunda

December 9, 2005 | Permalink | Comments (1) | TrackBack (0)

Of Counsel Focuses on Employment Issues

The current issue of Of Counsel, Lambda Legal's quarterly e-publication, focuses on sexual orientation in employment.  Topics include sexual orientation discrimination, HIV discrimination, workplace diversity, and Samuel Alito's record on employment issues.

Rick Bales

December 9, 2005 | Permalink | Comments (0) | TrackBack (0)

Walgreen Religious Pharmacists Sue


"FIRING" LINES.  Walgreen Co. allegedly engaged in religious discrimination by "effectively firing" three Illinois pharmacists who refused to fill prescriptions for emergency contraception, according to The American Center for Law and Justice (founded by evangelist Pat Robertson) in a filing with the Equal Employment OpportunityCommission.

The pharmacists were put on unpaid leave for refusing on religious and moral grounds to fill prescriptions for the morning-after pill.  The drug store chain said they violated a state rule mandating that such prescriptions be filled, according to the AP.

The full story can be found here, while the previous post of this story can be 
found here.

Paul M. Secunda

December 9, 2005 | Permalink | Comments (0) | TrackBack (1)

Large Settlement Over Mismanagement of K-Mart Pension Assets

Lawyers & Settlements is reporting in this blurb that:

Nearly 150,000 current and former Kmart employees suffered a combined loss of $100 million in their 401(k) plans when the retail chain store went bankrupt in 2002. The class includes all participants and beneficiaries of the plan from March 15, 1999, through March 6, 2003. They filed a class action lawsuit against their employer alleging Kmart forced workers to maintain the company match portion of their 401(k) in Kmart stock until they reached age 55. Kmart has agreed to an $11.75 million settlement. (Nov-30-05)

The full story can be find in the BILLINGS GAZETTE.

Paul M. Secunda

December 9, 2005 | Permalink | Comments (5) | TrackBack (0)

DOL Launches Compliance Assistance Web Portal

Yesterday, the U.S. Department of Labor announced its new Compliance Assistance Web Portal, designed to help members of the regulated community understand and comply with federal employment laws and regulations administered by DOL.  Located at, the Portal is an enhanced, more user-friendly version of the department’s previous compliance assistance Web site.  A central gateway to “all things compliance assistance,” the portal directs users to information such as e-tools, fact sheets on a variety of employment law issues, regulatory text, frequently asked questions, and additional compliance assistance information provided by DOL’s agencies.

The portal also features an improved navigation scheme to allow searches for compliance information “by topic” and “by audience;” users need not know the name of a particular law to locate key information.

Rick Bales


December 9, 2005 in Labor Law | Permalink | Comments (0) | TrackBack (0)

Thursday, December 8, 2005

The Peggy Browning Fund 2006 Summer Fellowship Program

For our law student readers interested in pursuing a career in traditonal labor law (and for law professors who wish to inform interested students of such opportunities), Mary Anne Moffa, the Executive Director of The Peggy Browning Fund,  just emailed the following:

The Peggy Browning Fund
2006 Summer Fellowship Program

31 funded summer fellowships in labor-related organizations throughout the United States.

Complete information now available at

Application deadline: January 13, 2006.

Please notify your students and encourage them to apply.

For those of you who did not know Peggy Browning, she was a prominent labor attorney and member of the NLRB.  President Clinton appointed her to the NLRB in 1994, and she served in that position until her death in 1997.  Incidentally, Peggy and I served as a judicial clerks to the same federal judge, Murray M. Schwartz of the United States District Court for the District of Delaware.   

Paul M. Secunda

December 8, 2005 in Labor Law | Permalink | Comments (0) | TrackBack (0)

Crossley on Discrimination in Health Insurance


A nice combination of scholarship and employee benefits law:

Mary Crossley (Pittsburgh) has posted on bepress legal repository: Discrimination against the Unhealthy in Health Insurance (forthcoming in the Kansas Law Review):

In the article, Dean Crossley:

[D]escribes a growing body of research showing that unhealthy people can be expected disproportionately to pay the price for consumerism, not only in dollars, but in preventable disease and disability as well. In short, consumerist coverage vehicles (including health savings accounts) discriminate against the unhealthy by impact.

The paper can be downloaded here.

Paul M. Secunda

December 8, 2005 in Scholarship | Permalink | Comments (0) | TrackBack (0)

Arnow-Richman on Public Law and Private Process


Rachel Arnow-Richman (Denver) just posted on SSRN a fascinating abstract. In Public Law and Private Process: Towards an Organizational Justice Model of Equal Employment Quality for Caregiver, Rachel suggests that based on:

[The] courts' development of the Americans with Disabilities Act "interactive process" requirement . . . that a comparable approach can be useful in redressing other types of workplace disparities, such as the attachment and promotion gap between working caregivers and unencumbered workers. It suggests that emphasis on procedural protection for workers may incentivize the development of positive voluntary procedures for preventing and correcting structural impediments to the advancement and inclusion of these workers. In so doing, it refines the relationship between public regulation and private behavior in reaching the goal of true workplace equality.

Read the abstract here while it's hot (Gosh, I fee like Larry Solum over at the Legal Theory Blog).

Paul M. Secunda

December 8, 2005 in Scholarship | Permalink | Comments (0) | TrackBack (0)

AALS Annual Meeting Program for Section on Employee Benefits

Keeping with the employee benefits theme this morning, the AALS Section on Employee Benefits will hosting a panel at the AALS Annual Meeting on Friday, January 6th from 3:30 p.m. to 5:15 p.m. There will be a business meeting at the conclusion of the panel.

The topic of the panel is Reinventing Retirement: Reforming Social Security, Medicare and Private Pension Plans.  The moderator will be David A. Pratt (Albany), and the panel participants include: Patricia E. Dilley (Florida), Lawrence A. Frolik (Pittsburgh); Marilyn Moon (American Institutes for Research), and Pamela Perun (Urban Institute).

The panel will discuss the aging of America, which  has focused attention on the financial challenges facing Social Security, Medicare and private retirement plans. This program will consider and evaluate the need for, and different avenues to achieving, reform, with some emphasis on the recent proposals advanced by the Bush Administration.

Paul M. Secunda

December 8, 2005 in Conferences & Colloquia | Permalink | Comments (0) | TrackBack (0)

Prognosis for Retiree Health Care Good, For Now

Here's another interesting blurb this morning from

SUBSIDIES EYED? Four in five businesses (79%) that currently provide retiree health benefits will accept government subsidies for continuing to provide retiree drug coverage at least as good as Medicare's coverage when the new drug benefit starts in 2006, according to a new survey of 300 of the nation’s largest private-sector employers, conducted by the Kaiser Family Foundation and Hewitt Associates.

However, firms accepting the retiree drug subsidy in 2006 are less certain about whether they will continue to take this approach in future years. Among those firms that will accept the subsidy in 2006, about four in five (82%) say that they are “very” or “somewhat” likely to accept the subsidy again in 2007, but looking ahead to 2010, only half (50%) say they are likely to maintain coverage and accept the subsidy, while 22% say they are unlikely to do so, and 28% say they do not know.

Paul M. Secunda

December 8, 2005 | Permalink | Comments (0) | TrackBack (0)

Wednesday, December 7, 2005

The Marquette Dentist Controversy: A Labor Viewpoint

There is an interesting debate brewing in the blogosphere about a story that How Appealing posted on today.  Apparently, a Marquette University dental student was suspended for the rest of the academic year for running a personal blog which was uncomplimentary to the school, its professors, and other students (although no individuals were named).  In a letter to the student dated Dec. 2, Denis Lynch, the dental school's associate dean for academic affairs, said the committee had found the student "guilty of professional misconduct in violation of the dental school's Code of Ethics and Professional Conduct."

Howard points to three articles and posts discussing the case: An article in The Milwaukee Journal Sentinel; an article from the Marquette tribune entitled, "Student suspended for blog posts; His lawyer says an appeal has been filed," and from Inside Higher Ed: "Dental Pain at Marquette." 

 The reason I want to discuss this controversy in a workplace context is because the issues raises an interesting question where professional students work at clinics where patient pays money and whether such students are more like employees or students.  Christine Hurt over at the Conglomerate blog argues in a post that to the extent that these individuals are considered employees or "agents" of the university, the university-employer should be able to demand a duty of loyalty from them and be able to suspend them or take other disciplinary action (Christine thinks a reprimand would have been more appropriate) when they are disloyal.

On the other hand, Eugene Volokh over at The Volokh Conspiracy wonders in a post whether the dental student is more in the nature of a student who should be granted, along with other members of the university community, the right to speak (or blog) without fear or repercussions.

My thought is this: the NLRB has just ruled that graduate students at NYU are students, not employees capable of securing protection under the NLRA (see my previous posts on this here, here, and here) .  Consequently, should a university be able to argue from both sides of its mouth and on the one hand say that students are like employees and therefore owe a duty of loyalty to the university, but on the other hand, are students so that the university does not have to worry  about their potential bargaining rights?  Christine points out in an email exchange that these dental students could be agents without being employees and have a fiduciary responsibility to act in the best interests of the university.  To be honest, I know such fiduciary duties exist within employee benefits and corporate law, but have never heard it argued for in this type of university setting.

In any event, I think that as long as graduate and professional students are classified as students under the labor laws of this country, they should have the more stringent First Amendment protections that citizens generally enjoy in commenting on matters of community interest (even though we are dealing with a private university here).  In short, I think Marquette is wrong and the dental student's appeal should lead to the overturning of this chilling discipline.

Paul M. Secunda


December 7, 2005 in Labor Law | Permalink | Comments (3) | TrackBack (0)

Nobel Laureates Call For Human Rights in the Workplace

From Red Harvest (through the AFL-CIO):

Click on the graphic to read.                    

Paul M. Secunda

December 7, 2005 | Permalink | Comments (0) | TrackBack (0)

"The Way Forward": Major Job Cuts and Plant Closures at Ford is reporting that drastic cuts are about to occur at Ford:

"Ford Motor Co., in a move aimed at bringing its costs in line with its flagging U.S. business, plans to slash up to 30,000 jobs and close at least 10 plants in the next five years, according to a report published Wednesday.


The Dearborn, Mich.-based automaker will  present the restructuring plans, dubbed the "Way Forward", to the board of directors on Wednesday, the Detroit News reported, citing sources familiar with the situation.

The plan, expected to be announced Jan. 23, includes the departure of as many as seven top executives.

Ford spokesman Oscar Suris declined to comment on what he described as "speculative scenarios" from the media.

"A comprehensive plan is coming in January and it won't be solely about cutting costs," he said."

Thankfully, the report of Ford's job cutting plan is driving the automaker's shares higher . . . .

Paul M. Secunda                                          

December 7, 2005 | Permalink | Comments (0) | TrackBack (0)

Verizon to Managers: Freezing DB Pensions and Reducing Health Care Benefits


FREEZE “TRY.” Verizon Communications plans to freeze the traditional pension plan covering 50,000 of its managers and expand their 401(k) plans instead.   

Verizon also said that it would contribute less to the health-care benefits of those managers when they retire, as part of a plan to save about $3 billion over the next decade.  Verizon's 200,000 retirees and its 105,000 current union employees will not be affected by the change.  MORE at

Paul M. Secunda

December 7, 2005 | Permalink | Comments (0) | TrackBack (0)