two requires or exams plans that pay out of employer's general assets and employees normal compensation during periods of to wages rather than on the amount of wages and this distinction is absolutely critical because two equally important congressional policies and purposes are at work here and both must begin in effect first congress has determined that federal law will not preempt state laws pertaining to reach compensation and and  circuit in california hospital association versus hanging acknowledged and observed that congress wishes to encourage rather than preempt state regulation of compensation the other policy that is at issue here as well is congress's intent that federal law arista preempt state laws regulating benefit compensation and congress enacted a wris exposes employees to the risk of losing benefits for which they have worked particularly retirement benefits so it's that type of funded views and mismanagement that congress sought to i understand the policies driving the wage benefit distinction and the distinction between funded and unfunded plans and given these two congressional policies the critical question when determining whether certain types of payments such as the payments i do show in this case are covered by arista is whether the payments are more closely analogous to wage compensation or benefits compensation be under wrists and i think most employees in most insurance in this country would say the same thing when they find out what it's like to be to have your claim governed by arista assets and you say we don't know but certainly find out first well that is an issue that their ex did raise in the motion for a certification of the district court's order so that i think th he's covered for that particular and was the resistance to telling him the source of funding now do you i mean are you but do you think that that is the the critical path and other words if it turns out that the payment is not from the general assets of the corporation booklet is distributed it tells the employees quite clearly in there and it's in the record here that the benefits are paid out of the general assets of the company and there was no question fund that has approximately fourteen million dollars out of which all benefits are paid to collectively bargained employee eased the salaried employees are paid out of the general assets it's one unified plane and there are numerous courts that say that you you don't think that matters corrected stipulate that hey that's all you can stipulate is paid out of the general assets i consider like his will pay out of the general assets and i can stipulate further that there is a trust fund out of which all union collectively bargain ploys are paid out plan it's of ministered by one person and some of the source of the funding differs depending on the type of an employee's right she says it matters you say that's right and there's a first circuit case called mcmahon vs digital equipment which it says that has to be one planned it either is a risk or it is not a risk and i don't think you can divide it the other part and this is why we think this whole case is premature as she will acknowledge also there is twenty four months paid by xerox and after that it's it's insured it's all one plan it just has different funding mechanisms and i think the fact that it's insured by credential for the post twenty nine months is also an extremely important factor which also compels that  paris what i'd like to do if i can though i'd like to break my argument into two parts first of all i'd like to talk about the policy reasons why this is in should be interests of plan and then i'd like to talk about the statute the regulation and the opinion letters when you read the congressional history and the supreme court cases addressing the rest that you find that this was a given faith in congress and that the supreme court acknowledged on numerous occasions including in the merton's case that it was a intended to address the funding issue that's in part true but it's not the whole story and when you look at only one of those reasons you miss all of the other reasons why erosive was adopted and why it's important here if we take all self funded the planned and hold the terrorists will no longer applies to them then we have and we do expose many of the employees to many of the risks that ariston was intended to avoid and i'd like to talk about that difficult position for you i realize that that is not a it's not a formal regulation it's due less deference but they've taken a position well but the thing is the formal position of the department of labor is exactly in support of our position because it says that if it is normal compensation ours is not normal compensation the only way under the department of labor's regulation is that you fall outside of a recess and into the payroll practice is it says if you pay normal compensation now we pay sixty percent of normal compensation so the only way that you can get there is to say that point six x x equals  in your honour's when you look at those opinion letters by the department of labor even they can't really do that there's no analysis there now but they do say that all what they do is they change the regulation they say as long as it does not pay more than normal compensation well what they've done is modified in amended their own regulation and in christianson the supreme court made very clear that agency can't modify our change it's formally adopted regulation through the back and also the the in where they were inviting comments it's very clear that there were some employees who have short term disability plans where they pay one hundred percent of the compensation to the people and those people said geez we don't want to fall within a risk of because that means we have to file form fifty five hundreds we have to have formal donkey form or plan documents we have to file our summary plan descriptions with the department of labor we have to distribute them we have to have section five zero three administration procedures we don't want to do all that if somebody is out with the flu or with an appendectomy for a week or two weeks we want to pay him one hundred percent of their compensation and not fall w all of the resists requirements and the department of labor said well that makes sense that's really not what we're intending to do here if you go ahead and pay people their normal compensation for a period of time there we're not going to make you comply with all of our wrist requirements and that's what the regulation said and that's what the preamble says it's intended to do in fact the preamble says that very clearly if your program is one that doesn't pay normal compensation but only pays a percentage of normal compensation then you're going to be within a risk and i think because as a practical matter your honor what you will find is just like in your resume and in the xerox plan for five months we don't have a risk of plan with a short term disability we've pay your hundred percent of your normal compensation we pay it as a part of your salary but once you get beyond five months then we pay you monthly instead of by weekly and we pay you only sixty percent of your compensation and we then do comply with all of our business requirements and so i think that's what the department of labor was getting at and when i think you read month by week yes we don't get your paycheck every other week when ever you disability you get one disability check on the first of each month ok so let me let me get back i mean if you had written the department of labor and said here's the xerox plan here's what we did w do is say we don't have to make certain filings with the department of labor it would not take away a single right mr to siri had under arrest and the other thing that's important about those letters is they express adopt the they expressly state that they are not binding they used arista procedure seventy six point one and i don't stand of that procedure says that these opinions are not binding on and cannot be relied upon by any third party and then me the supreme court said that's an extremely important factor which or no i understand is not it's not the this isn't a vine in least in my view it's not binding on us but we do over some deference i think under our in other cases we you know it's we've we've been around with us on the supreme court and they urged us to take a more careful deferential approach to agency to say and i respectfully disagree with you for two reasons our you're under it with respect it doesn't they don't come out and say here's what normal compensation means they change and say that the regulation we're going to say that it means as long as you don't pay more than normal compensation and that's exactly what kristiansen supreme court said no we're not going to let you back door change the regulation and i don't see how anybody could say that those opinion letters have not changed that regulation and the other thing is your honor you only have to follow it to the extent it has the power to persuade you i can't understand what is in those opinion letters and what analysis what logic what thought process is set out in those opinion letters that says well i'm now that normal compensation and that regulation really means as long as it's not more than normal competency and that's exactly what the district court said is i don't think the term normal compensation in here is ambig and i certainly don't see how these opinion letters in any way persuade me and the other thing around and when you talk about what the supreme court has said as we noted in our brief and i think it's significant in nord versus black and decker which came out of this court it's a plan identical to ours from what i can tell it paid sixty percent and there this youth you the ninth circuit decided that case on the basis of a recess and so did two to the supreme court and neither one of you said whoops we don't even have jurisdiction over this case because it's a payroll practice it's not in the risk of playing now that in all fairness so that issue wasn't on the case well your honor it wasn't it wasn't because every court's first responsibility is to make certain that it has subject that fact is that judge stevens who wrote them a rash decision and talks all about what is a payroll practice and are not a payroll practice there was vacationing pay but what falls within this regulation and what doesn't was uniform federal law so you don't have to worry about your plan be interpreted one way by an alabama court in a different way by a wyoming court and we're not going to do a whole bunch of other different things that preempted state law in five fourteen we've complied with that we've incurred substantial expense in complying with the rest and it is important to us that we know how this plan is going to be enforced across the country that there's a uniform  what this law does what if mr purcey he's opinion is followed that means that we no longer apply with the risk at all and now we find ourselves in fifty's different state courts and jury trials extra contractual damages and so probably makes this rethink whether we want to do a disability plan at all and the thing about it also your honor is as we've noted in our case even though it hasn't been addressed expressly every district court in every federal court to address this l that it was an arrest of plan so we have gone through the considerable expense and effort to make certain that we comply with the rest of most particularly the section five zero three full and fair review provisions and now we're going to find where you guys were silly to do that you don't have to incur any of these expenses you should have just thrown it all out i don't think that's good for employees and i don't think it's good for xerox and i don't think it's what congress then if i may talk for a moment about the policy reasons because i think what we've done here is we're not the throw the baby out with the bathwater if we follow what mr to siri said well what congress did in the wrist it says we want these plans to have one uniform written plan and we want the participants to have a discernible way to get those planes and that's what part one of a rissa does that's what section  one o four and five o three see do it said sue that we want to make certain that there is a uniform federal law and that's why they preempted and section five fourteen all of the state laws it's said that it's not that section five ten because one of them make certain that if employer yours fired people simply for filing benefit claims those people had a federal cause of action and that it then it one of the make sure that there was a uniform full and fair written the department of labor on a course of time you know it's i know there's slightly different circumstances but you know ok you're on i mean basically departments i appreciate your stash irregular terry argument and and i think that th participant such as mr persevere they were also listed by an employer who said we don't want to comply with the rest we don't think we need to and all the department of labor has said is all right you don't have to file your s p these with us you don't have to file fifty five hundred none of those never did they say and by the way that means that people like mr purcey or he can't sue you under arrest and in fact they went out of their way to say we're not nolan case if somebody had their participants that sued in the next day that opinion rather would have meant absolutely nothing and i think that's the significant factor mr for syria a month ago since you a bunch of other decisions which he thought was supportive of his position but i think the important thing in those those were all f l s eight cases in those opinion letters the agency said this is binding precedent that can be relied upon and in our case the department of labor has gone to exactly the opposite extreme and said nobody can rely upon these opinions and so i don't think that you can take that and said well that's an intent by the department of labor to modifying change its regulation which i don't think is  if you take normal compensation and switch to not more than normal compensation and say well that's the deciding factor in this case then you clearly have changed the regulation and that's what you  now i have something to say actually i do want to respond to a few points that mr potter made first of all he's forgetting how it's to be serious lost his disability pay to begin with the reason he lost his pay and he went he was still this able still medically unable to work but while he was on disability receiving these payments he was terminated xerox cut his employment and then he got a letter the next the letter was issued the very next day stating that he is no longer going to receive any disability payments because he's been terminated even though he's still disabled still unable to work so that is not a disability plan it's not a disability policy it does not cover what this ability plan is supposed to cover policy that will kick in for a person who's been disabled for more than twenty nine months it has nothing to do with the that part of the plan that we're talking about right now it is and it was a plan it's funded through insurance there's another important point here there the first five months of the disability is the same exact program that his theory was on only it pays one hundred percent for the first five months and sixty percent after five months that's before the credential insurance kicks in so the administrative scheme is the same the medical eligibility eligibility requirements are the same the paychecks are the same way but their paychecks are l five months now how that translates wage compensation which is iraq's agrees that the first part of the program is wage compensation not benefit compensation not regulated virus and as soon as they start paying less than full salary it transfers from wage compensation to benefit compensation doesn't make any sense so i think that position is much less reasonable than the department of labor's position that these funds are these which are akin to wages not benefits and the department of labor h to keep in mind that congress does not want federal law to preempt state regulations that have to do with wage compensation so that's an very important equally important congressional policy is that leverage compensation is not preempted by federal law and the the department of labor did not add anything to this regulation it's xerox is adding a word to it they were that's at issue here the department does use the word normal rate of compensation in our section he doesn't use the word rate he just says normal compensation so so your argument view it's a method of compensation the rate that's important that's correct then there's some ambiguity there as to what the department actually means by omitting the word rate in that case that the department has said that i its plan pays more and the regular rate for example if it adds a cost of living adjustment then it's not a payroll practice but if it pays less than the regular rate it is as long as it meets the other requirements so the focus is on the nature of the payments the character of the payments at a much more like wage compensation then then a benefit how do you dress the argument that if it's the you cannot provide a plan that if you have some employees  or through the collective bargaining agreement from whose identity are similarly situated that paid from the trust and your your clients pay from the dental assets that you can't have a receipt an anonymous actually the case in say that you can't take a payroll practice and combine it with interest a plan to make it into an aversive plan so we definitely have some disagreement on what the case  and i do i really also want to point out that the the difference and now isis is not this power to persuade tast that mr potter keeps referring to and that even and mentioned that the test for deference is because the department of labor is interpretating it's only regulation the test is going to be under our our pers bowls which is still the law and this court has recognized it time and time again that there's a difference in that and how to approach the deference question if it's in the agencies interpret its own regulation and deference analyzed under our which means that is if there is some ambiguity in the regulation the court mosques look to the way that the department is interpreted in it and if the department interpretation is permissible given the purposes of the regulation then it is binding and the court must defer to it that's the our rule and it's been repeated in this court several times in recent years