Wednesday, February 8, 2006

Retail Trade Group Seeks Invalidation of Maryland's Wal-Mart Bill on ERISA Preemption Grounds


I guess I have always felt that it was inevitable that Maryland's Wal-Mart law would be challenged on ERISA preemption grounds given the uncertainty over whether such preemption actually exists. 

As readers of this blog know, I have written that I believe that such Fair Share laws are preempted, but other prominent commentators and academics have put forward equally sound arguments why ERISA preemption should not apply to the Maryland law.  Rather than reiterating the competing legal analyses here, I am re-posting my analysis (which includes the Maryland Attorney General's opposite conclusion), as well as a helpful overview of this issue on The ERISA Blog a month or so back.

To me, what is more surprising about this case is that the Retail Industry Leaders Association brought this cause of action against the Maryland Fair Share law (and against a similar law in Suffolk County, NY), rather than Wal-Mart itself.  In particular, I wonder whether the Trade Association has standing to challenge this law since it is unclear to me how the law imposes an injury on the Association which the law can redress.  And even though Wal-Mart is one of the members of this group, Wal-Mart is the only entity that is impacted by the Maryland law. (The Wall Street Journal has more on the RILA and its close relationship with Wal-Mart).

Of course, I can see why Wal-Mart would rather act as part of a larger group to show that other retailers are in solidarity with it on this matter, but I am at a loss to see how relief to the group in this case would benefit anyone but Wal-Mart.

Now, I'm no expert on standing law, so I would particularly appreciate comments from readers who can shed some light on this issue.


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» Development in ERISA Preemption Battle Over Maryland Fair Share Health Care Fund Act from The ERISA Blog
As many of you already know, the Retail Industry Leaders Association ("RILA") filed a challenge to Maryland's Fair Share Health Care Fund Act -- the so-called Wal-Mart bill -- in U.S. District Court last week. You can access the complaint... [Read More]

Tracked on Feb 12, 2006 1:39:32 PM


I must admit I laughed at the ridiculousness of this bill.

I'm not sure if anyone has taken this point of view on the "Wall-Mart" bill and other states looking to enact similar laws, but how does the legislature have the right to enforce any type of minimum to be paid when the very nature of the benefit provided is completely voluntary!

Employers have no obligation what-so-ever to provide health and welfare benefits to their employees.

What would state legislature's do if employers just dropped coverage all together? Or drop coverage and provide additional compensation to the employee to offset the loss of coverage that can then be used by the employee to obtain coverage in the individual market, or used however the employee wishes? What do they currently do with employers that don't provide coverage? Nothing, and it should stay that way.

And how was the 8% determined? An average I'm assuming, but what if the average was say 5%, or 15%? How would the legislature spin the issue then?

This is nothing more than the state not wanting to provide benefits and paying the bill for those unisured employees vs. employers not paying their fair share.

Granted Wall-Mart doesn't have the best PR in other areas of employement law, but then again providing health benefits to employees is a priviledge not a right.

Posted by: Scott | Feb 8, 2006 10:33:20 AM

Premption of the Maryland Fair Share Law aside, lets be honest here.If a municipality mandates an entity to provide for a the subsidy of a publicly paid benefit then its law and thats that. See unemployment insurace, compensation law and others. Lets stop the crap and either fix the health care situation in this nation or mandate that employers have a legal obligation to provide for the coverage of their employees. I am sick and tired of corporations laying off their costs on the tax paying public. Corporate contributions to the national tax base have been reduced from 30% to 8% in the last 26 years. Pensions are being offloaded onto the public in the form of underfunded canceled plans. Enough is enough. If the corporations can't afford to provide for their employees then let them reduce the compensation packages provided to thier top executives and off shore the executives jobs.

Posted by: Eric Sposito | Feb 18, 2006 7:23:00 PM

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