482 U. S. 1
June 1, 1987
Maine had a law that required companies to give employees enormous severance pay in the event of mass layoffs. After making such a mass layoff, Fort Halifax Packing argued that this law was preempted by the Employee Retirement Income Security Act (ERISA), which superseded all state laws relating to “employee benefit plans.”
The Court ruled 5-4 that the Maine law was not preempted. Brennan, writing for the Court, argued that requiring severance pay for mass layoffs did not affect “employee benefit plans.” The Maine law did not force companies to change their standard plans – it only imposed an easy to calculate requirement that would only accrue in rare situations. He tried to show through legislative history that the main purpose of ERISA was to make the law respecting the actual written retirement policies of companies more uniform. Brennan also turned back a claim that the National Labor Relations Act (NLRA) prohibited states from imposing laws that upset the balance between employee and employer, finding the minimal regulation of Maine’s law not troubling on that front
White, joined by Rehnquist, O’Connor, and Scalia, dissented. His argument was short and too the point – Maine’s law directly regulated and controlled the employee benefits that companies had to provide, and these companies would have to take administrative steps to do so. He found nothing in ERISA to suggest that only laws affecting a company’s formal written policies would be preempted. And I absolutely agree. This strikes me as very much a results-oriented judgment – had the Maine law favored employers rather than employees, I have no doubt the case would have gone the other way.