June 9, 2007
Some ERISA Fiduciary No-Nos
The good people over at the Alexander Hamilton Institute Benefits Alert provide some cautionary tales for ERISA fiduciaries and ask that ERISA fiduciaries always take their responsibilities to act in the best interests of plan participants and beneficiaries seriously.
Here are two cases highlighted:
A health plan fiduciary continued to do business with a third-party administrator she knew to be a convicted embezzler. Prior to her becoming a plan fiduciary, she knew that after the third-party administrator's embezzlement conviction, he again embezzled money from her employee benefits funds and that he lied about it. She also knew that his uncle refused to do business with him and said his word wasn't to be trusted. She even counseled others against dealing with him.
After she became a fiduciary, the third-party administrator embezzled an additional $177,271. She took action to restore the money taken, but it was too late. A federal trial court held her personally liable for this embezzlement and stripped her of her fiduciary status forever. An appeals court upheld the decision (Chao v. Merino, 452 F.3d 174 (2nd Cir. 2006)) . . . .
If a plan participant asks you for plan documents, you must provide them within 30 days of the request. Electronic communication makes this duty much easier. A pension plan administrator was personally liable for a total of $10,500 for failing to fax plan documents to an employee's attorney, as she was requested to do. Plan documents were requested as part of a pension-related lawsuit. The reason the plan administrator gave for not honoring the request: She thought the request was moot after it was revealed as part of this lawsuit that the employee's allegations had no merit. (Zirhelt v. Michigan Consolidated Gas Co., No. 04-CV-70619 (E.D. Mich. 2006)).
My good friend, Susan Mangiero, makes her living advising pension fiduciaries on these issues over at Pension Risk Matters. If you are an ERISA fiduciary, and have questions about your responsibilities, you should check out the resources on Susan's site.
EEOC on Appropriate Job Language for College Job Announcements
The U.S. Equal Employment Opportunity Commission has issued a new letter on the language appropriate for colleges to use in their job advertisements — a topic that critics of affirmative action have been pushing higher on the EEOC agenda. The new letter does not bar colleges from indicating that they welcome female or minority applicants for positions, but the letter uses language that critics of affirmative action see as a move in their direction. And the letter specifically endorses the use of language that does not indicate a particular welcome to certain groups . . . .
The new letter, written in April and just posted by the EEOC on its Web site, takes a different approach, responding to an inquiry from Roger Clegg, president and general counsel of the Center for Equal Opportunity, which opposes affirmative action. The new letter references last year’s letter — but with different language to describe it — and then goes on to deal with a question from Clegg about what he sees as a better way to indicate an open environment for all applicants.
“We commented that job advertisements typically should not indicate a preference based on race, sex, or ethnicity. We noted that there are circumstances under which focused recruiting is used in order to eliminate barriers to employment opportunity and attract a more diverse applicant pool. We also noted that the legality of a particular practice cannot be assessed outside the context of particular facts that have been fully investigated,” the letter said.
“Of course, there are different ways to develop a diverse applicant pool and particular circumstances will determine which methods are both lawful and efficacious. You suggested that a way for employers to signal that they welcome applications from all individuals without regard to race, color, religion, sex, or national origin, but without indicating a preference for any group, would be to use language such as the following: ‘Men and women, and members of all racial and ethnic groups, are encouraged to apply.’ We agree, and such a statement is lawful regardless of the surrounding circumstances, even if an employer had no need to diversify its applicant pool,” the letter added.
While this letter does not have the force of law, it does seem to indicate a slight change in mind-set in the EEOC against affirmative action language in such job announcements. We will see whether this language influences how universities and colleges seeks job candidates in the months to come.
June 8, 2007
Fenwick on Workers' Human Rights in Australia
Here's the abstract:
This paper is about the legal protection of the human rights of workers in Australia. I focus in particular on aspects of the protection of freedom of association, and how Australian law acts to eliminate discrimination in employment and occupation. This focus of course takes in only two of the four areas covered by the core labour standards of the International Labour Organisation (ILO), leaving out the issues of child labour and forced labour. It therefore sidesteps the debate about the adequacy of the ILO's conception of what are core labour standards, and avoids important questions about the implementation of some of Australia's international obligations as a party to the International Covenant on Economic, Social and Cultural Rights (ICESCR), in particular as concerns the rights to work, to just and favourable conditions of work, and to social security. I have selected the focus despite these limitations because of the significant volume of material on the topics, and because they serve to illustrate more fully some of the significant limitations of Australian law as a means of protecting workers' human rights.
There has been an increasing emphasis internationally on workers' rights as human rights, and this piece adds to the growing scholarship in this developing area. I am also interested to read how Australian law deals with the tensions between employment discrimination prohibitions and rights to association.
Massachusetts Consider Height & Weight Workplace Discrimination Bans
PlanSponsor.com reported a few days ago:
WEIGHT LISTED? Massachusetts lawmakers are considering legislation that would bar workplace discrimination based on height and weight, the Associated Press reported. If legislators pass the bill, Massachusetts would become the second state, behind Michigan, to prohibit such discrimination, although the District of Columbia also bans discrimination based on appearance, and San Francisco and Santa Cruz, California, bar weight and height discrimination.
If such a law were passed, it probably would impact some important and interesting precedents in the Title VII disparate impact line of cases, like Dothard v. Rawlinson, where height and weight requirements in the prison setting were viewed not only from an intentional discrimination perspective, but also from the standpoint about whether such requirements have a disparate impact on women.
It would be interesting to find out whether the passing of such legislation in the other jurisdictions mentioned above has led to reduction in disparate impact litigation.
- Judy Fudge, The Limits of Good Faith in the Contract of Employment: From Addis to Vorvis to Wallace and Back Again?, 32 Queen's L.J. 529 (2007).
- Sandra F. Sperino (top left), Recreating Diversity in Employment Law by Debunking the Myth of the McDonnell Douglas Monolith, 44 Hou. L. Rev. 349 (2007).
- Naomi Schoenbaum, It's Time That You Know: The Shortcomings of Ignorance as Fairness in Employment Law and the Need for an "Information-Shifting" Model, 30 Harv. J.L. & Gender 99 (2007).
- Dana Michael Hollywood, Creating a True Army of One: Four Proposals to Combat Sexual Harassment in Today's Army, 30 Harv. J.L. & Gender 151 (2007).
- Luis Garicano (top center) & Thomas N. Hubbard (top right), Managerial Leverage Is Limited by the Extent of the Market: Hierarchies, Specialization, and the Utilization of Lawyers' Human Capital, 50 J.L. & Econ. 1 (2007).
- Shlomo Benartzi (bottom left), Richard H. Thaler (bottom center), Stephen P. Utkus, & Cass R. Sunstein (bottom right), The Law and Economics of Company Stock in 401(k) Plans, 50 J.L. & Econ. 45 (2007).
Comments & Notes
- Allegra C. Wiles, More Than Just a Pretty Face: Preventing the Perpetuation of Sexual Stereotypes in the Workplace, 57 Syracuse L. Rev. 657 (2007).
- Lorrie E. Bradley, Striking Back Against Retaliatory Discrimination: How Burlington Northern & Santa Fe Railway Company v. White Expands Protections for Employees Under Title VII's Participation and Opposition Clauses, 85 N.C. L. Rev. 1224 (2007).
- Emily White, "Not Our Problem:" Construction Trade Unions and Hostile Environment Discrimination, 10 N.Y.C. L. Rev. 245 (2006).
Top-5 Employment SSRN Downloads
- Benjamin Barton, Do Judges Systematically Favor the Interests of the Legal Profession? (414).
- Edward A. Zelinsky, The New Massachusetts Health Law: Preemption and Experimentation (132).
- Richard Moberly, Unfulfilled Expectations: An Empirical Analysis of Why Sarbanes-Oxley Whistleblowers Rarely Win (116).
- Richard A. Bales, Beyond the Protocol: Recent Trends in Employment Arbitration (84).
- Martha Chamallas, Discrimination and Outrage: The Migration from Civil Rights to Tort Law (78).
Top-5 Labor SSRN Downloads
- Orly Lobel, Big-Box Benefits: The Targeting of Giants in a National Campaign to Raise Work Conditions (39).
- Mitchell H. Rubinstein (photo above), Assignment of Labor Arbiration (38).
- Ronald McCallum, In Defense of Labour Law (29).
- Kristen Anderson, Shelley D. Marshall, & Ian Ramsay, Do Australian Institutional Investors Aim to Influence the Human Resource Practices of Investee Companies? (20).
- Mitchell H. Rubinstein (photo above), Is a Labor Relations Evidentiary Privilege Developing? (19).
Top-5 Benefits/Compensation/Pension SSRN Downloads
- Edward A. Zelinsky, The New Massachusetts Health Law: Preemption and Experimentation (132).
- Pamela J. Perun, Towards a Sensible System for Saving (87).
- Lisa Mensah & Pamela J. Perun, Savings for Life: A Pathway to Financial Security for All Americans (70).
- Wei-Yin Hu & Jason S. Scott, Behavioral Obstacles to the Annuity Market (66).
- Craig Copeland (photo above), Employee Tenure, 2006 (46).
Top-5 International Employment & Labor Law SSRN Downloads
- Judy Fudge, The New Discourse of Labour Rights: From Social to Fundamental Rights? (67).
- Orly Lobel, Big-Box Benefits: The Targeting of Giants in a National Campaign to Raise Work Conditions (39).
- Kirsten Anderson, Shelley D. Marshall, & Ian Malcolm Ramsey, Do Australian Institutional Investors Aim to Influence the Human Resource Practices of Investee Companies? (20).
- Michael J. Rawling (photo above), A Generic Model of Regulating Supply Chain Outsourcing (17).
- Dae Yong Jeong & Ruth V. Aguilera, The Evolution of Enterprise Unionism in Japan: A Socio-Political Perspective (15).
June 7, 2007
Something on a lighter note: the National Law Journal's recent top-ten employment situations of 2006. They include these gems:
10. The California superior court in Los Angeles has certified an arbitrator's decision that Hustler magazine publisher Larry Flynt must pay $1.1 million to a former secretary who alleged that having to comply with Flynt's trysts with prostitutes in his private office created a hostile work environment. Elizabeth Rene Raymond alleged that she had to participate in an "early warning system" when Flynt's wife was approaching the executive offices during one of these trysts. It seems that Flynt didn't understand that what is portrayed in his magazines isn't quite appropriate office behavior.
9. Two employees of a Boise, Idaho, ice skating rink were fired for making a midnight fast-food run with two Zambonis. An anonymous tipster reported seeing the two big ice-surfacing machines chug through a Burger King drive-through and return to the rink at about 12:30 a.m. The squat vehicles, which have a top speed of about 5 miles an hour, drove 1.5 miles in all. To date, the two have not challenged their discharge in court. A few experienced lawyers say that, if they do, they'll be skating on thin ice.
2. A Drug Enforcement Administration agent who accidentally shot himself in the foot while demonstrating gun safety to school children is suing the agency, saying that a video of the incident has made him the laughing stock of the Internet. Moments before the shooting, Lee Paige, a 14-year agency veteran, told the students he was the only one in the room professional enough to handle a gun. His suit alleges that the agency leaked the video to the public and that he has become the "target of jokes, derision, ridicule and disparaging comments."
Follow the link above to see all ten.
Hat Tip: Barry Hirsch
Colorado Bans Sexual Orientation and Religious Discrimination in the Workplace
Colorado Governor Bill Ritter on May 25 signed legislation that modifies the Colorado Antidiscrimination Act to prohibit discrimination in employment on the basis of religion or sexual orientation. The legislation (Senate Bill 25) becomes effective August 8, 2007.
Under the law, it is a discriminatory or unfair employment practice for an employer to "refuse to hire, to discharge, to promote or demote, to harass during the course of employment, or to discriminate in matters of compensation against any person otherwise qualified" because of that person's sexual orientation or religion. The legislation defines "sexual orientation" as "a person's orientation toward heterosexuality, homosexuality, bisexuality, or transgender status or an employer's perception thereof."
It is good to see that the bill also covers gender identity. The point is drawing nigh where the federal government is looking ridiculous as the states are seen as more progressive in protecting LGBT individuals in the workplace. In short: Congress pass ENDA now.
It is good to see that the bill also covers gender identity. The point is drawing nigh where the federal government is looking ridiculous as the states are seen as more progressive in protecting LGBT individuals in the workplace.
In short: Congress pass ENDA now.PS
It's Not Good To Be A SOX Whisteblower
Recently, Richard Moberly (Nebraska) documented in an empirical study how difficult it is to succeed as a corporate whistleblower under the Sarbanes-Oxley Act (SOX). One of the difficulties is proving that you have engaged in protected activity in reporting the corporate fraud.
Now, comes word of another whistleblower under SOX, who won at the ALJ level, that lost on the merits because of his inability to convince the Adminstrative Review Board that protected activity was involved.
Michael Fox at Jottings of An Employer's Lawyer has the details:
What turned into an extended procedural battle over the power under Sarbanes Oxley to re-instate whistleblowers based on an interim determination took on another dimension last week when the Administrative Review Board reversed the ALJ determination which reinstated former CFO David Welch and held against him on the merits. Welch v. Cardinal Bankshares Corp., ARB No. 05-064, ALJ No. 2003-SOX-15 (ARB 5/31/07) . . . .
The ARB concluded:
We reverse the ALJ's conclusion that Cardinal violated the SOX because, as a matter of law, he erred in concluding that Welch engaged in SOX-protected activity. Welch's concerns that Cardinal misclassified the loan recoveries and consequently misled investors do not constitute protected activity because Welch could not have reasonably believed that Cardinal misstated its financial condition. Likewise, Welch's complaints about access to Larrowe & Co. and about Cardinal's internal accounting controls are not SOX-protected activity because they do not relate to the federal securities laws. Therefore, since Welch has not demonstrated that he engaged in protected activity, an essential element of his case, we DENY his complaint.
As Michael pointed out, the case can still be appealed to the Fourth Circuit, but the case does not provide the best set of facts given SOX's enforcement scheme.
It looks like the SOX whistleblowing scheme will be just as ineffective as many federal and state whistleblower laws now on the books. All the more reason that we need to find constitutional and better statutory schemes to protect these individuals.
Richard Mueller (University of Lethbridge Department of Economics) has found that, in Canada, homosexual men are paid considerably less than their heterosexual counterparts, but that the same is not true for women. He found an earnings disparity of about 20% for men in same-sex couples compared to men in different-sex couples, and a disparity of about 30% for men in same-sex couples compared to married men (though Canada recognizes gay marriage, Mueller says the vast majoirty of marriages are heterosexual). For women, however, there is no statistically significant disparity between women in same-sex couples and the other two groups.
The article, just posted on SSRN, is Straight Pay for the Queer Guy? Earnings Differentials of Males and Females in Same-Sex Couples in Canada.
June 6, 2007
One Management-Side Response to Ledbetter
Well, as written about last week, the Supreme Court's decision in Ledbetter was extremely unfortunate for all plaintiffs, especially women, seeking to bring pay discrimination claims under Title VII.
How unfortunate? This labor and employer lawflash from the eminent law firm of Morgan Lewis (disclosure: my former employer), shows just how employer-friendly this decision is:
On May 29, 2007, the United States Supreme Court issued its decision in Ledbetter v. Goodyear Tire & Rubber Co., Inc., 2007 WL 1528298 (U.S. May 29, 2007), affording employers relief from untimely pay discrimination claims . . . .
Ledbetter affords employers additional defenses against pay discrimination claims, including pattern or practice pay discrimination claims . . . .
Employers facing pattern or practice pay discrimination allegations in a class action should use Ledbetter to force the plaintiffs to focus their statistical analysis on pay decisions made within the 180/300 day charge filing period. Typically, the central evidence used by plaintiffs in pattern or practice pay discrimination cases is a multiple regression analysis of compensation and personnel data as of a particular snapshot date. There are several methods for modifying this type of analysis to focus only on pay disparities that emerged during the charge period.
Employers should consider using Ledbetter to defend against pay discrimination claims brought under state and local antidiscrimination laws because many of those laws were modeled after Title VII, and state and federal courts interpreting those laws frequently look to Title VII interpretations for guidance.
I'm sure the Court foresaw none of these consequences. Fortunately, the cavalry appears to be on the way. Whether the cavalry meets its own Waterloo is anyone's guess.
Hat Tip: Hank Leland
Good News/Bad News for Union Elections
BNA has just released data for union elections in 2006 (subscription required). Some highlights, or lowlights depending on your view, quoted from the BNA's report:
- The number of representation elections held in 2006 decreased to 1,648 from 2,142 in 2005, continuing an annual decline in NLRB elections since 1996 when about 3,300 elections were conducted by the agency. The number of elections won by unions also decreased to 1,014 in 2006, from 1,315 in 2005.
- The union win rate, however, increased slightly to 61.5 percent of all representation elections in 2006, from 61.4 percent in 2005. Unions have won more than half of all representation elections in each of the past 10 years.
- The union win rate in decertification elections improved slightly last year. Unions prevailed in 125 of 368 resolved decertification elections, or 34 percent, compared with 114 of 338 decertification elections, or 33.7 percent in 2005.
- Unions affiliated with the AFL-CIO won 457 of 762 representation elections in 2006, or 60 percent, compared with 59.7 percent in 2005, when they won 1,021 of 1,709 elections.
- Unions in the Change to Win federation, which was formed in mid-2005, won 415 elections, or 56.9 percent of the 729 elections they participated in last year. In 2005, they won 53.7 percent of the 257 elections they were involved in during the portion of the year that they were CTW, not AFL-CIO, affiliates.
- SEIU was the most successful of the top 10 unions, winning 72.9 percent of the NLRB elections in which it participated. The Machinists ranked second, winning 70.1 percent of its elections, followed by IBEW (67.3 percent), IUOE (63.9 percent), and the Laborers (60.3 percent).
- Of the top 10 unions, SEIU also organized the most workers--15,130--followed by the Teamsters with 8,146.
As we've posted on before, some of the representation election numbers this year may be skewed by a unique event; however, the decline is still significant.
The contrast between the decline in elections and the increase (albeit small) is interesting. I don't know whether this reflects a trend of unions going to the NLRB-run process when they have more support and preferring non-NLRB options otherwise. I also find it interesting that the Change to Win's success rate was a bit lower than the AFL-CIO's. One year isn't enough to make a trend, but given that a major part of CTW's objectives was to emphasize organizing, this raises the question whether they're succeeding (although the SEIU's success is notable). Perhaps the CTW unions are more willing than the AFL-CIO to take risks, which would obviously lower their success rate. I don't really know, and I'd be curious if anyone has any insights into this.
EEOC Retiree Health Benefits Regulation Upheld
The Third Circuit, in AARP v. EEOC (3rd Cir June 4, 2007), has upheld an EEOC regulation which exempts certain employer-sponsored retiree health benefits programs from the requirements of the Age Discrimination in Employment Act (ADEA).
In July 2003, the Equal Employment Opportunity Commission (EEOC) published a notice of proposed rulemaking to exempt from the prohibitions of the Age Discrimination in Employment Act (ADEA) "the practice of altering, reducing or eliminating employer-sponsored retiree health benefits when retirees become eligible for Medicare or a State-sponsored retiree health benefits program." Age Discrimination in Employment Act; Retiree Health Benefits, 68 Fed. Reg. 41, 542, 41, 542 (EEOC July 14, 2003). The 3rd Circuit held that this proposed regulation is within the EEOC's authority under the ADEA and is valid according to the requirements of the Administrative Procedure Act (APA).
The decision sounds right and it might be the EEOC's way of protecting the complete elimination of retiree health plans by employers (a growing trend) by granting them this relief in this particular circumstances. Only time will tell if the rulemaking has the expected effect.
On the fiftieth anniversary of Brown, we heard much about the resegregation of students. Yet, the topic of desegregating teachers, a long standing school desegregation duty, received practically no attention. Are we ignoring the issue because teachers have been effectively desegregated, or because we think segregating teachers might have value? These two questions are the heart of this Article. To determine whether teachers have been effectively desegregated, I conducted a Teacher Distribution Study of fifty-three school districts that strongly indicates that teachers are segregated just as students are. Unfortunately, this resegregation is educationally harmful. While there are likely some benefits for having minority teachers for minority school children, the reality is that this segregation sharply limits the number of experienced teachers for minority schools. (The number of minority teachers is simply too small to staff adequately minority schools, and white teachers typically leave minority schools as soon as they can.) And if the educational research reveals anything it is this: experience matters. We need integration, in other words, for very practical reasons; our fates are not racially and ethnically separate, but inter-dependent. Unfortunately, the Supreme Court has said the bus ride to school desegregation is over, and has effectively taken the wheels off the school desegregation bus by limiting the availability of voluntary efforts to desegregate. Yet, current Equal Protection Clause jurisprudence continues to value what I describe as “togetherness.”
This is a great article on an important topic -- a must-read!
June 5, 2007
NLRB Changes Standard for Proving Damages in Salting Cases
The NLRB has changed the evidentiary standard for determining the duration of the backpay period when the discriminatee is a "salt." A salt, of course, is a union person who applies for a job with an employer for the purpose of initiating a union organizing campaign. An employer who fires a salt (or any other employee) violates Section 8(a)(3) of the NLRA by discriminating against that employee on the basis of union activity (NLRB v. Town & Country Electric, Inc., 516 U.S. 85 (1995)). The remedy for an unlawful discharge or refusal to hire includes the employer’s payment of back pay to the employee for the period from the unlawful act until the employer made a valid offer of reinstatement (or instatement, in the case of an unlawful refusal to hire).
Until now, the Board has applied a presumption in all discrimination cases that, if hired, the employee would have stayed on the job for an indefinite period. If the job was a construction job, the Board applied a further presumption that the employer would have transferred the employee to other jobsites when the job from which s/he was discharged (or for which s/he should have been hired) came to an end.
Now, however, the Board has changed the burden in salting cases. In salting cases, the burden now is on the union to prove how long the salt would have stayed on the job. Damages will be awarded for only the duration that the union proves the salt wold have remained on the job. The Board reasoned that most salts stay on the job until they either succeed in their organizational effort or they conclude that such efforts are unsuccessful, and that in either situation the union usually then sends the salt to seek to organize the employees of another nonunion employer. For this reason, the Board concluded that the burden of proof should be on the union.
The Board's decision does not affect the burden of proof in non-salting cases.
The Board's decision was 3-2. It should come as no surprise that Liebman and Walsh were the dissenters. They criticized the majority for overturning Board precedent endorsed by two appellate courts and rejected by none, without any party having raised the issue, without the benefit of briefing, and without any sound legal or empirical basis. The dissent would have continued to treat salts as the Board treats all other employees who are subjected to employment discrimination, reasoning that in back pay cases, it is appropriate to resolve factual uncertainties against the employer who already has been found to be a wrongdoer.
Here's my take: NLRB remedies already are of the slap-on-the-wrist variety. Even before this case, many employers were more than happy to pay a few years worth of back pay for the privilege of firing a union organizer. Even the possibility that the employer eventually would have to rehire the employee wasn't much of a deterrent, because by the time reinstatement occurred the union movement would probably fizzle, and in any event the employer would quickly find an excuse to fire the employee again. This case continues down the same path. Without a meaningful remedy, there's no meaningful right.
The case is Oil Capitol Sheet Metal, Inc., 349 NLRB No. 118 (May 31, 2007).
Recently Published Scholarship
Berkeley Journal of Employment and Labor Law
Volume 28, Number 1, 2007
- Ann O’Leary, How Family Leave Law Left Out Low-Income Workers, p. 1.
- Jim Hawkins, Papers, Petitions, and Parades: Free Expression’s Pivotal Function in the Early Labor Movement, p. 63.
- Laurel E. Fletcher, Phuong Pham, Eric Stover, & Patrick Vinck, Latino Workers and Human Rights in the Aftermath of Hurricane Katrina, p. 107.
- Richard Michael Fischl, Rethinking The Tripartite Division of American Work Law, p. 163.
- Jamie Darin Prenkert, Bizarro Statutory Stare Decisis, p. 217.
- Emily B. White, How We Treat Our Guests: Mobilizing Employment Discrimination Protections in a Guest Worker Program, p. 269.
- David C. Yamada, Dignity, “Rankism,” and Hierarchy in the Workplace: Creating a “Dignitarian” Agenda for American Employment Law, p. 305.
June 4, 2007
Exceptions to ERISA Preemption for State Health Care Reform Legislation?
It is by now well-known that Maryland's attempt to force Wal-Mart to pay a larger share of their employees health care costs ended up being preempted by ERISA. The fate of Massachusetts health care reform is still to be decided.
In the meantime, the House Health, Employment, Labor, and Pension Subcommittee heard testimony a couple weeks back about whether there should be an exception from ERISA preemption for state and local efforts at health care reform. Here is a summary from the HR Policy Association:
Last week, the House HELP Subcommittee held a hearing on the impact of ERISA preemption on state and local efforts to expand health insurance coverage. Chairman Rob Andrews (D-NJ) acknowledged that ERISA has encouraged employers to provide insurance but claimed that its broad preemption has "created an unintended consequence that prohibits states from regulating employer-sponsored health plans." Underscoring that this prohibition was in fact fully intended, Honeywell Vice President Kevin Covert emphasized the importance of preemption to enabling large multi-state employers to achieve uniformity in plan design and administration. HR Policy filed testimony acknowledging the valuable lessons the state efforts are contributing to the search for a national solution but cautioned that "any policy changes should do nothing to jeopardize the coverage of those who are already insured through the employment-based system." Nevertheless, several witnesses argued that ERISA "has become a major obstacle" to reform and pressed for changes to either allow waivers for certain states or to enact an amendment to ERISA stating that certain kinds of reforms are not preempted.
I have previously argued, along with others, that ERISA should be amended to allow for state experimentation with state health care reform measures. Needless to say, I would be a proponent of this type of amendment to ERISA.