Fourth Circuit Rejects State's Attempt to Control Employer-Sponsored Benefits in Retail Industry Leaders Association v. Fielder

Ogletree Deakins Filed Amicus Brief on Behalf of Three Leading National Associations

WASHINGTON, DC – January 19, 2007 – On Wednesday, the U.S. Court of Appeals for the Fourth Circuit handed down its decision in Retail Industry Leaders Association v. Fielder, a case that challenged Maryland’s ability to enact employee benefit mandates.  The Fourth Circuit ruled that Maryland’s Fair Share Health Care Fund Act cannot be enforced because it is preempted by a federal law, the Employee Retirement Income Security Act (ERISA).  The Maryland law purported to impose a “payroll tax” on selected employers that failed to spend a state-determined percentage of  payroll on employee health coverage. 

The Maryland statute was part of a recent explosion of state and local legislative efforts to mandate employer-provided fringe benefits.  Unless these efforts are determined to be preempted by ERISA, they threaten to impose a patchwork of potentially conflicting benefit plan requirements on employers across the country.

With such high stakes, The Society for Human Resource Management, the HR Policy Association, and the American Benefits Council asked Tom Christina, a shareholder and employee benefits lawyer at the law firm of Ogletree Deakins, to file an amicus brief on their behalf with the U.S Court of Appeals for the Fourth Circuit.   The amicus brief noted that ERISA generally preempts state laws that relate to employer-sponsored benefit plans in the private sector, such as health plans for employees and their families.  By preempting state and local laws that mandate benefits coverage, ERISA leaves employers generally free to design their benefit plan offerings within their budgets in response to their perception of their employees’ preferences.

Christina, who is one of the small number of benefits lawyers nationwide who maintains a plan design and regulatory compliance practice, but also regularly litigates employee benefits issues in trial and appellate courts throughout the country, said “The Fair Share Act is the most significant challenge to federal control over employer-sponsored health, welfare and pension plans in the last ten years.”

“Industry groups, employers, and state and local governments have been watching the case closely because the Fourth Circuit’s ruling likely will influence other courts when they consider similar legislation across the country,” Christina continued.

“This is a very important ruling,” said Gray Geddie, Chairman of Ogletree Deakins’ Board of Directors.  “We were honored to have represented the Society for Human Resource Management, the HR Policy Association, and the American Benefits Council in this case.  Tom was the right lawyer to present their views in a landmark ERISA case.  When the stakes in employee benefits litigation are high, clients appreciate having an advocate like Tom who knows ERISA from the ground up.”

The Society for Human Resource Management (SHRM) is the world’s largest association devoted to human resource management.  Representing more than 205,000 individual members, the Society’s mission is to serve the needs of HR professionals by providing the most essential and comprehensive resources available.  The HR Policy Association brings together the chief human resource officers of more than 250 of the largest corporations in the United States.  The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system.  The Council’s members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.

To view a copy of the amicus brief filed by Ogletree Deakins challenging Maryland’s Fair Share Health Care Fund Act, click here.

About Ogletree Deakins

Ogletree Deakins is the nation’s third largest labor and employment law firm, representing management in all types of employment-related legal matters.  The firm has 350 lawyers located in 28 offices from Miami to Los Angeles.  In addition to handling labor and employment law matters, the firm has thriving practices focused on business immigration, employee benefits, and workplace safety and health law.  Ogletree Deakins represents a diverse range of clients, including more than half of the Fortune 50 corporations in the U.S.

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