Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca2-13-03790/USCOURTS-ca2-13-03790-0/pdf.json

Nature of Suit Code: 950
Nature of Suit: Constitutionality of State Statutes
Cause of Action: 

---

13-3790-cv

Concerned Home Care Providers, Inc. v. Cuomo

1 United States Court of Appeals

2 FOR THE SECOND CIRCUIT

3

4 August Term 2014

5

6 (Argued: August 20, 2014 Decided: March 27, 2015)

7

8 No. 13-3790-cv

9 _____________________________________

10

11 CONCERNED HOME CARE PROVIDERS, INC., AMERICAN CHORE SERVICES, INC.,

12 DBA CITY CHOICE HOME CARE SERVICES, COMMUNITY HOME CARE REFERRAL

13 SERVICE, INC., EAGLE HOME CARE, LLC, PELLA CARE, LLC, AND PLATINUM

14 HOME HEALTH CARE, INC.,

15 Plaintiffs-Appellants,

16

17 ST. MARY’S HEALTHCARE SYSTEM FOR CHILDREN,

18 Plaintiff,

19

20 -v.-

21

22 ANDREW M. CUOMO, AND NIRAV R. SHAH,

23 Defendants-Appellees.

24

25 _____________________________________

26

27 Before: WALKER, WESLEY, and LIVINGSTON, Circuit Judges.

28

29 Plaintiffs appeal from a judgment of the United States District Court for the

30 Northern District of New York (Mordue, J.), entered on September 25, 2013.

31 Plaintiffs sought to enjoin Defendants Andrew M. Cuomo and Nirav R. Shah from

32 enforcing the New York Wage Parity Law, N.Y. Pub. Health Law § 3614‐c, on the

33 grounds that it is preempted by the National Labor Relations Act (“NLRA”), 29

34 U.S.C. § 151 et seq., or the Employee Retirement Income Security Act of 1974

35 (“ERISA”), 29 U.S.C. § 1001 et seq., oris unconstitutional underthe Due Process and

1

Case 13-3790, Document 97-1, 03/27/2015, 1470865, Page1 of 32
1 Equal Protection Clauses of the Fourteenth Amendment.  The district court granted

2 Defendants’ motion to dismiss in part, denied it in part, and entered final judgment,

3 deciding that ERISA preempts subdivision four of the Wage Parity Law but that the

4 remainder of the statute is neither preempted nor unconstitutional.  Setting aside

5 subdivision four (which is not before us) we conclude that the Wage Parity Law is

6 not preempted by ERISA.  In addition, the Law as a whole is not preempted by the

7 NLRA, and does not violate Plaintiffs’ rights under the Equal Protection and Due

8 Process Clauses of the Fourteenth Amendment.  Accordingly, the judgment of the

9 district court is AFFIRMED.

10

11 PHILIP E.ROSENBERG, Nixon Peabody LLP, Albany,

12 NY; Benjamin F. Neidl, Wilson Elser Moskowitz

13 Edelman & Dicker LLP, Albany, NY, for Plaintiffs‐

14 Appellants.

15

16 JEFFREY W. LANG, Assistant Solicitor General,

17 Andrew D. Bing, Deputy Solicitor General, Barbara

18 D. Underwood, Solicitor General, for Eric T.

19 Schneiderman, Attorney General of the State of

20 New York, Albany, NY, for Defendants‐Appellees.

21

22 David M. Slutsky, Levy Ratner, P.C., New York,

23 NY, for Amicus Curiae 1199 SEIU United Healthcare

24 Workers East in support of Defendants‐Appellees.

25

26 DEBRA ANN LIVINGSTON:

27 A section of the New York Public Health Law known as the “Wage Parity

28 Law” sets the minimum amount of total compensation that employers must pay

29 home care aides in orderto receive Medicaid reimbursements forreimbursable care

30 provided in New York City and Westchester, Suffolk, and Nassau Counties (the

2

Case 13-3790, Document 97-1, 03/27/2015, 1470865, Page2 of 32
1 “surrounding Counties”).  N.Y. Pub. Health Law § 3614‐c.  The questions presented

2 on appeal are whether the Wage Parity Law is preempted by the National Labor

3 Relations Act (“NLRA”), or the Employee Retirement Income Security Act of 1974

4 (“ERISA”), or is unconstitutional under the Fourteenth Amendment’s Due Process

5 and Equal Protection Clauses.  We conclude that the Wage Parity Law is neither

6 preemptednorunconstitutional, and we therefore affirm the judgment ofthedistrict

court.1 7

8 BACKGROUND

9 A. The Wage Parity Law

10 “[T]he provision of high quality home care services to residents of New York

11 state is a priority concern” of the New York Legislature.  N.Y. Pub. Health Law

12 § 3600.   To that end, the State’s Public Health Law establishes a procedure for

13 licensing “home care services agencies” (“LHCSAs”), which employ home care

14 aides.  Id. § 3605.  Home care aides fall into two main categories: “home health”

15 aides (“HHAs”) and “personal care” aides (“PCAs”).  See id.; see also id. § 3614‐

1 As set forth herein, the district concluded that subdivision four of the Wage Parity

Law is  preempted by ERISA.  That judgment is not before us.  As to the present ERISA

preemption claim, we conclude that the Wage Parity Law, excepting subdivision four, is

not preempted.

3

Case 13-3790, Document 97-1, 03/27/2015, 1470865, Page3 of 32
1 c(1)(d).   Both are qualified to assist patients in daily activities like maintaining

2 personal hygiene and completing household tasks.  See id. § 3602(4)‐(5).  But HHAs

3 must undergo more extensive training than PCAs, which allows them to perform

4 “other related supportive services essential to the patient’s health.”  10 N.Y. Code

5 Rules & Regs. § 700.2(c)(15); see also id. § 700.2(b)(9), (14).

6 Notwithstanding the additional training, by 2010, HHAs in New York City

7 and the surrounding Counties received a lower starting hourly wage than PCAs.

8 See Carol Rodat, New York’s Home Care Aide Workforce: A Framing Paper 17 (2010)

9 available at http://www.phinational.org/sites/phinational.org/files/clearinghouse/

10 PHI‐486%20NY%20Framing.pdf.  Known as “wage inversion,” this pay gap arose

11 because many PCAs serve LHCSAs contracting directly with New York City and

12 therefore benefit from the City’s Living Wage Law, and because PCAs unionized in

13 greater numbers than HHAs.  Id. at 18.  A committee created by Governor Andrew

14 Cuomo to recommend changes to New York’s Medicaid program proposed that

15 LHCSAs and other home care aide employers should be required to compensate all

16 of their employees at a level commensurate with local living wage laws in order to

17 receive Medicaid reimbursements.    See New York State Department of Health,

18 Proposals Approved by the NYS Medicaid Redesign Team Feb. 24, 2011, available at

4

Case 13-3790, Document 97-1, 03/27/2015, 1470865, Page4 of 32
1 http://www.health.ny.gov/health_care/medicaid/redesign/

2 docs/approved_proposals.pdf (last visited Feb. 3, 2015).  Although ultimately not

3 endorsed by the full committee, the proposal was “intended to address the

4 inconsistency in wages among home care workers” and thereby improve the

5 recruitment and retention of high‐quality home care aides.  See New York State

6 Department of Health, Proposal Number 61, Proposals Being Rated, available at

7 http://www.health.ny.gov/health_care/medicaid/redesign

8 /docs/proposals_being_rated.pdf (last visited Feb. 3, 2015).

9 In 2011, the New York Legislature enacted the “Wage Parity Law” as part of

10 a Medicaid reform package.  N.Y. Pub. Health Law § 3614‐c.  This addition to the

11 New York Public Health Law requires LHCSAs and other employers in New York

12 City and the surrounding Counties to pay all home care aides providing Medicaid‐

13 covered care an “applicable minimum rate of home care aide total compensation”

14 in orderto receive Medicaid reimbursements forthat care.  Id. § 3614‐c(2);see also id.

15 § 3614‐c(1)(d) (defining “[h]ome care aide” to include “home health aide[s]” and

16 “personal care aide[s]”).  “Total compensation” consists of “all wages and other

17 direct compensation paid to or provided on behalf of the employee,” including

5

Case 13-3790, Document 97-1, 03/27/2015, 1470865, Page5 of 32
1 “health, education or pension benefits, supplements in lieu of benefits and

2 compensated time off.”  Id. § 3614‐c(1)(b).

3 Subdivision three of the Wage Parity Law establishes two “applicable

4 minimum rate[s] of home care aide total compensation” — one for care furnished

in New York City,2 5 and the other for care furnished in the surrounding Counties.

6 Each “applicableminimum rate” increases gradually overthe course ofthree orfour

7 years.   In New York City, employers must pay home care aides at least ninety

8 percent of the rate mandated by the City’s Living Wage Law for services performed

9 between March 2012 and February 2013.   Id. § 3614‐c(3)(a)(i).   That proportion

10 increases to ninety‐five percent for services furnished between March 2013 and

11 February 2014.  Id. § 3614‐c(3)(a)(ii).  From March 2014 onward, employers must pay

12 the greater of the rate set by the City’s Living Wage Law or the “prevailing rate of

13 total compensation as of January [1, 2011],” id. § 3614‐c(3)(a)(iii).  The “[p]revailing

14 rate of total compensation” is the “average hourly amount of total compensation

15 paid to all home care aides covered by whatever collectively bargained agreement

16 covers the greatest number of home care aides in [New York City].” Id. § 3614‐

2 The Wage Parity Law refers to cities “with a population of one million or more”

instead of New York City, but New York City is the only city that meets that population

threshold.  

6

Case 13-3790, Document 97-1, 03/27/2015, 1470865, Page6 of 32
1 c(1)(c).  On January 1, 2011, the collective bargaining agreement that covered the

2 greatest number of home care aides in New York City was the agreement negotiated

3 by Service Employees International Union (“SEIU”) Local 1199.  The Wage Parity

4 Law thus references SEIU 1199‘s collective bargaining agreement as of January 1,

5 2011 to define the “prevailing rate of total compensation,” but does not reference

6 any subsequent changes to that agreement.  Id. § 3614‐c(3)(a)(iii).

7 The “applicable minimum rate of home care aide total compensation” for

8 services furnished in the surrounding Counties follows a different schedule.  Id.

9 § 3614‐c(3)(b).  Beginning in March 2013, employers must pay home care aides in the

10 surrounding Counties at least ninety percent of the rate set by New York City’s

11 Living Wage Law.  Id. § 3614‐c(3)(b)(i). That rate continues until March 2014, when

12 it rises to ninety‐five percent of the New York City Living Wage rate.  Id. § 3614‐

13 c(3)(b)(ii).  The statute then requires two additional increases: first to one‐hundred

14 percent of the New York City Living Wage rate in March 2015, id. § 3614‐c(3)(b)(iii),

15 and then, in March 2016, to the lesser of one hundred‐fifteen percent of the rate set

16 by the New York City Living Wage Law or the living wage law of the county in

17 which the care is provided, id. § 3614‐c(3)(b)(iv).

7

Case 13-3790, Document 97-1, 03/27/2015, 1470865, Page7 of 32
1 Subdivision four of the Wage Parity Law, in relevant part, provides that

2 “[a]ny portion of the minimum rate of home care aide total compensation

3 attributable to health benefit costs or payments in lieu of health benefits, and paid

4 time off, . . . shall be superseded by the terms of any employer bona fide collective

5 bargaining agreement in effect as of January [1, 2011], or a successor to such

6 agreement, which provides for home care aides’ health benefits through payments

7 to jointly administered labor‐management funds.”    Id. § 3614‐c(4).    A “jointly

8 administered labor‐management fund” is also known as a “Taft‐Hartley” plan. As

9 the district court noted, it is undisputed that by incorporating New York City’s

10 living wage rate, the “total compensation” referred to in subdivision four includes

11 a specific hourly amount attributed to health benefit costs ($1.35 at the time of the

12 district court’s opinion).  Concerned Home Care Providers v. Cuomo, 979 F. Supp. 2d

13 288, 300 (N.D.N.Y. 2013).  Subdivision four thus provides that, for the purposes of

14 the Wage Parity Law, any portion of the “minimum rate of home care aide total

15 compensation” attributable to such benefits or wage supplements will be

16 superceded in the case of an applicable Taft‐Hartley plan by its relevant terms, and

17 such employers can accordingly compensate their home care aides at a rate below

18 the minimum prescribed in the Wage Parity Law.

8

Case 13-3790, Document 97-1, 03/27/2015, 1470865, Page8 of 32
1 B. Procedural History

2 Plaintiffs‐Appellants are five LHCSAs and a not‐for‐profit trade association

3 of home care agencies (“Plaintiffs”).  They filed suit on February 28, 2012 in the

4 United States District Court for the Northern District of New York (Mordue, J.),

5 seeking to prevent Defendant‐Appellee Nirav R. Shah, the Commissioner of the

New York State Department of Health, from enforcing the Wage Parity Law.3 6   The

7 complaint alleges that the Law is either preempted by the National Labor Relations

8 Act (“NLRA”), 29 U.S.C. § 151 et seq., or the Employee Retirement Income Security

9 Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., or is unconstitutional under the Due

Process and Equal Protection Clauses of the Fourteenth Amendment.4 10

11 Defendants moved to dismiss the complaint and, on September 25, 2013, the

12 district court granted the motion in part, denied it in part, and entered final

13 judgment.  See Concerned Home Care Providers, 979 F. Supp. 2d at 312.  The court

3 Plaintiffs also named Governor Andrew M. Cuomo as a defendant, but the district

court concluded that he is not a proper party and dismissed all claims against him.

Plaintiffs have not appealed that decision.

4 In tandem with their federal action, Plaintiffs filed suit in the New York Supreme

Court for Albany County, arguing that the Wage Parity Law violates the New York

Constitution.  The Supreme Court granted summary judgment for Defendants, and the

Third Department of the New York Appellate Division affirmed.  See Concerned Home Care

Providers, Inc. v. New York, 969 N.Y.S.2d 210 (3d Dep’t 2013).

9

Case 13-3790, Document 97-1, 03/27/2015, 1470865, Page9 of 32
1 concluded that the NLRA does not preempt the Wage Parity Law, and that the Law

2 does not violate Plaintiffs’ Fourteenth Amendment rights.    See id. at 305‐10.

3 However, the court determined that subdivision four — which excuses

4 grandfatheredcollective bargaining agreements thatincludeTaft‐Hartleyplans from

5 complying with certain aspects of the Wage Parity Law — runs afoul of ERISA’s

6 express preemption provision because it “‘singles out’ . . . only one type of ERISA

7 plan” for unique treatment.  Id. at 302 (quoting Mackey v. Lanier Collection Agency &

8 Serv., Inc., 486 U.S. 825, 830 (1988)).    The court then turned to the severability

9 provisions enacted contemporaneously with the Wage Parity Law, as well as those

10 in the Public Health Law, and decided that subdivision four could be excised from

11 the Wage Parity Law.  See id. at 311‐12.  Because Plaintiffs did not argue that ERISA

12 preempts other portions of the Law, and because the parties did not request

13 discovery, the district court granted Plaintiffs’ requested relief as to subdivision

14 four, dismissed the remainder of their claims, and entered final judgment.  Seeid. at

15 312‐13.

10

Case 13-3790, Document 97-1, 03/27/2015, 1470865, Page10 of 32
1 DISCUSSION

2 Plaintiffs now ask this Court to decide whether the Wage Parity Law is

preempted by the NLRA or ERISA, or violates their Fourteenth Amendmentrights.5 3

4 We review the district court’s dismissal of their claim de novo, accepting the

5 complaint’s factual allegations as true and drawing all reasonable inferences in

6 Plaintiffs’ favor.  Starr Int’l Co. v. Fed. Reserve Bank of N.Y., 742 F.3d 37, 40 (2d Cir.

7 2014).  We conclude that neither the NLRA nor ERISA (excepting subdivision four)

8 preempts the Wage Parity Law and that the Law does not violate Plaintiffs’

constitutional rights.  The judgment of the district court is therefore affirmed.6 9

5 Defendants have not appealed the district court’s decision that ERISA preempts

subdivision four of the Wage Parity Law.  Nor have they asserted waiver with regard to

Plaintiffs’ ERISA preemption challenge with regard to the rest of the Law.  We conclude

that Plaintiffs’ ERISA preemption challenge to the balance of the Wage Parity Law, which

presents a pure question of law, is properly before us.  See Sniado v. Bank Austria AG, 378

F.3d 210, 213 (2d Cir. 2004) (per curiam).

6 Defendants argue that Plaintiffs’ claims are barred by res judicata and collateral

estoppel.  We have doubts about whether Defendants properly presented this argument

in the district court, because they raised the issue in a letter submitted after their motion

to dismiss and did not seek leave to amend that motion.  See O’Connor v. Pierson, 426 F.3d

187, 194‐95 (2d Cir. 2005).  Since we rule for Defendants on the merits, we need not, and do

not, resolve their preclusion arguments.

11

Case 13-3790, Document 97-1, 03/27/2015, 1470865, Page11 of 32
1 A. NLRA Preemption

2 The NLRA does not contain an express preemption provision.  Instead, “[t]he

3 doctrine of laborlaw pre‐emption concerns the extent to which Congress has placed

4 implicit limits on the permissible scope of state regulation of activity touching upon

5 labor‐management relations.”  N.Y. Tel. Co. v. N.Y. Dep’t of Labor, 440 U.S. 519, 527

6 (1979) (emphasis added and internal quotation marks omitted).  

7 One form of implied preemption under the NLRA, known as Machinists

8 preemption, forbids states and localities from intruding upon “the [labor‐

9 management] bargaining process.”  Lodge 76 Int’l Ass’n of Machinists & Aerospace

10 Workers, AFL‐CIO v. Wis. Emp’t Relations Comm’n, 427 U.S. 132, 149 (1976).  This

11 doctrine “rel[ies] on the understanding that in providing in the NLRA a framework

12 for self‐organization and collective bargaining, Congress determined both how

13 much the conduct of unions and employers should be regulated, and how much it

14 should be left unregulated.”  Metro. Life Ins. Co. v. Massachusetts, 471 U.S. 724, 751

15 (1985).  Sections 7 and 8 of the NLRA guarantee employees the right to organize and

16 engage in other forms of protected concerted action, and identify forms of unfair

17 labor practices.  29 U.S.C. §§ 157, 158(a)‐(b).  The remaining aspects ofthe bargaining

18 process are left “to be controlled by the free play of economic forces.”  Machinists,

12

Case 13-3790, Document 97-1, 03/27/2015, 1470865, Page12 of 32
1 427 U.S. at 140 (internal quotation marks omitted).  For a state to “define what

2 economic sanctions might be permitted negotiating parties in an ideal or balanced

3 state of collective bargaining” is therefore “denying one party to an economic

4 contest a weapon that Congress meant him to have available.”  Id. at 150 (internal

5 quotation marks omitted).

6 As the Supreme Court made clear in Metropolitan Life, “[t]he framework

7 established in the NLRA was merely a means to allow the parties to reach . . .

8 agreement fairly.”  471 U.S. at 752; see 29 U.S.C. § 151.  The statute’s concern with

9 “establishing an equitable process for determining terms and conditions of

10 employment” does not extend to the “particularsubstantiveterms of the bargain that

11 is struck.”  Metro. Life, 471 U.S. at 753 (emphasis added) (citing Archibald Cox,

12 Recent Developments in Federal Labor Law Preemption, 41 Ohio St. L.J. 277, 297 (1980)).

13 In contrast to their inability to regulate the bargaining process, states have

14 traditionally possessed “broad authority under their police powers to regulate the

15 employment relationship,” and the substantive labor standards that they enact set

16 a baseline for employment negotiations.  DeCanas v. Bica, 424 U.S. 351, 356 (1976);see

17 also Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 21 (1987) (“[P]re‐emption should not

18 be lightly inferred . . . , since the establishment of labor standards falls within the

13

Case 13-3790, Document 97-1, 03/27/2015, 1470865, Page13 of 32
1 traditional police power of the State.”).  Such “[m]inimum state labor standards

2 affect union and nonunion employees equally, and neither encourage nor

3 discourage the collective bargaining processes that are the subject of the NLRA.”

4 Metro. Life, 471 U.S. at 755.  Instead, they simply “give specific minimum protections

5 to individual workers.”  Id.

6 The Wage Parity Law is a valid exercise of New York’s authority to set

7 minimum labor standards.  States have traditionally sought to remedy the problem

8 of depressed wages by regulating payment rates, and those efforts are “not

9 incompatible” with the “general goals of the NLRA.”  Id. at 754‐55.  TheWage Parity

10 Law, which stabilizes minimum wages forthe hundreds of thousands of home care

11 aides in New York City and the surrounding Counties, is an unexceptional exercise

12 of that traditional power.    “Unlike the NLRA,” the Law is not “designed to

13 encourage or discourage employees in the promotion oftheirinterests collectively.”

14 Id. at 755.  All home care aides in New York City and the surrounding Counties

15 benefit from the statute’s minimum rate of compensation — it neither distinguishes

16 betweenunionizedandnon‐unionizedaides, nortreats employersdifferently based

14

Case 13-3790, Document 97-1, 03/27/2015, 1470865, Page14 of 32
on whether they employ unionized workers.7 1     By applying only to Medicaid‐

2 reimbursed care, moreover, the Wage Parity Law is limited to funds over which

3 Congress has granted the state a special “measure of discretion” to craft “programs

4 that are responsive to the needs of [its] communities.”  Cmty. Health Care Ass’n of

5 N.Y. v. Shah, 770 F.3d 129, 134‐35 (2d Cir. 2014); see also Metro. Life, 471 U.S. at 749

6 n.27 (“An appreciation of the State’s interest in regulating a certain kind of conduct

7 may still be relevant in determining whether Congress in fact intended the conduct

8 to be unregulated.”).  

9 Although fixing a minimum rate of compensation restricts the terms over

10 which employers and employees may negotiate, “the mere fact that a state statute

11 pertains to matters over which the parties are free to bargain cannot support a claim

12 of pre‐emption.”  Fort Halifax, 482 U.S. at 21.  After all, these parties traditionally

13 “come to the bargaining table with rights under state law that form a backdrop for

14 their negotiations.”   Id. (internal quotation marks omitted).   For that reason, in

15 Rondout Electric, Inc. v. New York Department of Labor, 335 F.3d 162 (2d Cir. 2003), we

7By singling outTaft‐Hartleyplans, subdivisionfour arguably treats union andnon‐

union employees differently.  But the district court enjoined enforcement of that section

and severed it from the remainder of the statute.  Defendants did not appeal that order.

The remainder of the Wage Parity Law treats union and non‐union employees the same.

15

Case 13-3790, Document 97-1, 03/27/2015, 1470865, Page15 of 32
1 uphelda regulation implementing § 220 ofthe New YorkLaborLaw, which requires

2 employers on public works projects to pay employees an amount equal to the

3 “prevailing rate of similarly employed workers in the locality,” eitherin the form of

4 benefits or wages.  Id. at 164 (internal quotation marks omitted).  Although setting

5 a minimum wage indirectly affects how employers and employees bargain, we

6 concluded that the law is not preempted under the Machinists doctrine because it

7 does not favor or disfavor collective bargaining, “eliminate particular bargaining

8 tools,” or dictate the details of particular contract negotiations.  Id. at 169.  

9 TheWageParity Law’s mandate that home care aides bepaida minimum rate

10 of total compensation is no different.  By setting a total compensation floor, the Law

11 may affect the package of benefits over which employers and employees can

12 negotiate, but “it does not limit the rights of self‐organization or collective

13 bargaining protected by the NLRA, and is not preempted by that Act.”  Metro. Life,

14 471 U.S. at 758.

15 Plaintiffs contend that the Wage Parity Law is unique because it applies only

16 to home care aides in New York City and the surrounding Counties.  Machinists

17 preemption does not, however, eliminate state authority to craft minimum labor

18 standards for particular regions or areas of the labor market.  For instance, § 220 of

16

Case 13-3790, Document 97-1, 03/27/2015, 1470865, Page16 of 32
1 the New York Labor Law, which we addressed in Rondout, applies only to

2 employees on public works projects and sets the minimum wage based on the

3 “prevailing [compensation]rate . . . in the locality.”  Rondout, 335 F.3d at 164 (internal

4 quotation marks omitted) (emphasis added).  Other Circuits have also upheld local

5 ordinances establishing substantive workerprotections inparticularindustries.  See,

6 e.g., R.I. Hospitality Ass’n v. City of Providence, 667 F.3d 17, 32‐33 (1st Cir. 2011)

7 (upholding local regulation that requires new hospitality employers to retain

8 employees); Wash. Serv. Contractors Coal. v. Dist. of Columbia, 54 F.3d 811, 817‐18

9 (D.C. Cir. 1995) (upholding local regulation that applies to employees performing

10 food, janitorial, maintenance, or nonprofessional health care services).  And the

11 Supreme Court has never applied Machinists preemption to a state law that does not

12 regulate the mechanics of labor dispute resolution.  Compare, e.g., Fort Halifax, 482

13 U.S. at 19‐22 (upholding severance law that applies only to businesses with 100 or

14 more employees), with Machinists, 427 U.S. at 140 (striking down state law that

15 penalizedconcertedrefusals to work overtime).  Even assuming, arguendo,thatthere

16 may be labor standards that are so finely targeted that they impermissibly intrude

17

Case 13-3790, Document 97-1, 03/27/2015, 1470865, Page17 of 32
upon the collective‐bargaining process,8 1 the Wage Parity Law, which simply sets a

2 minimum rate of compensation for the hundreds of thousands of home care aides

3 who provide Medicaid‐covered care in New York City and the surrounding

4 Counties, is no such law.

5 Plaintiffs also raise two objections to the mechanisms by which the Wage

6 Parity Law calculates the “minimum rate of home care aide total compensation.”

7 Neither argument alters our conclusion.  First, Plaintiffs contend that, because the

8 minimum rate of total compensation is pegged to New York City’s Living Wage

8 Plaintiffs’ reliance on Chamber of Commerce v. Bragdon, 64 F.3d 497 (9th Cir. 1995),

and 520 South Michigan Avenue Associates v. Shannon, 549 F.3d 1119 (7th Cir. 2008), is

misplaced.  Even assuming, arguendo, that these cases were correctly decided, they are

readily distinguishable.  The ordinance in Bragdon not only prescribed a particularlevel of

total compensation, but also dictated “the division of the total package that is paid in

hourly wages directly to the worker and the amount paid by the employer in health,

pension, and welfare benefits for the worker” — a “much more invasive and detailed”

interference with the collective‐bargaining process than the Wage Parity Law’s minimum

total compensation requirement.  64 F.3d at 502.  And unlike the ordinance in Bragdon,

which applied to all private industrial construction, the Wage Parity Law applies only to

Medicaid‐reimbursed care.   See Rondout, 335 F.3d at 169; see also Associated Builders &

Contractors of S. Cal., Inc. v. Nunn, 356 F.3d 979, 990 (9th Cir. 2004).  As for Shannon, the law

at issue in that decision “establish[ed] terms of employment that would be very difficult

for any union to bargain for,” including detailed break requirements and changes to the

burden of proof and to damages calculations in retaliation lawsuits.  549 F.3d at 1134.  Such

provisions represent a substantially more targeted invasion of the bargaining process than

the Wage Parity Law’s minimum compensation requirement.  Moreover, by switching the

burden of proofin retaliation cases,the ordinance in Shannon arguably interfered with both

the NLRB’s jurisdiction and the parties’ grievance and arbitration procedures.  In this way,

the ordinance went beyond prescribing minimum labor standards and arguably interfered

with the collective‐bargaining process.  See Metro. Life, 471 U.S. at 753.

18

Case 13-3790, Document 97-1, 03/27/2015, 1470865, Page18 of 32
1 Law, employees can lobby the City government for higher wages.  But the ability to

2 lobby is present “with regard to any state law that substantively regulates

3 employment conditions.”  Fort Halifax, 482 U.S. at 21.  Machinists preemption is not

4 a license for courts to close politicalroutes to workplace protections simply because

5 those protections may also be the subject of collective bargaining.  Id. at 21‐22.  

6 The second objection — that calculating the “prevailing rate of total

7 compensation” based on the largest collective bargaining agreement covering home

8 care aides in New York City reduces incentives to bargain in the future — is

9 similarly unpersuasive.  The Wage Parity Law uses the “prevailing rate of total

10 compensation as of January [1, 2011],” and that prevailing rate cannot be used to set

11 the minimum rate of total compensation until March 2014 at the earliest.  N.Y. Pub.

12 Health Law § 3614‐c(3)(a)(iii) (emphasis added).    Any changes to the largest

13 collective bargaining agreement that might occur afterJanuary 1, 2011 have no effect

14 on the rate mandated by the Wage Parity Law.  Unions, individual employees, and

15 employers therefore remain free to bargain about how to allocate total compensation

16 between wages and other benefits and whether a compensation rate above the

17 January 1, 2011 level is appropriate.   The Wage Parity Law’s use of the largest

18 collective bargaining agreement to set the “prevailing rate of total compensation”

19

Case 13-3790, Document 97-1, 03/27/2015, 1470865, Page19 of 32
1 has no more of an effect on incentives to bargain collectively than if the Legislature

2 wrote a rate directly into the statute.

3 Thedistrict court correctlydecidedthatthe NLRAdoes notpreempttheWage

4 Parity Law.  Because weuphold the Law as a minimum labor standard, we need not,

5 and do not, address Defendants’ argument that the Law can also be upheld on the

6 ground that the State’s actions are proprietary, rather than regulatory.

7 B. ERISA Preemption

8 Before the district court, Plaintiffs argued that ERISA preempts the Wage

9 Parity Law because subdivision four singles out Taft‐Hartley plans for special

10 treatment.  Thedistrict court agreed(andDefendantsdidnot appealthatruling), but

11 severed subdivision four from the statute rather than invalidating the entire Law.

12 See Concerned Home Care Providers, 979 F. Supp. 2d at 311‐12.  Plaintiffs now urge us

13 to findthe remainder oftheWageParityLaw preempted, either because subdivision

14 four is not severable or because ERISA separately preempts the Law’s other

15 provisions.  We disagree with both arguments.

16 To begin with,the district court was correctto sever subdivision fourfrom the

17 Wage Parity Law.  Severability is a question of state law and, in New York, turns on

18 “whether the Legislature would have wished the statute to be enforced with the

20

Case 13-3790, Document 97-1, 03/27/2015, 1470865, Page20 of 32
1 invalid part exscinded, orrejected altogether.”  Greater N.Y. Metro. Food Council, Inc.

2 v. Giuliani, 195 F.3d 100, 110 (2d Cir. 1999) (internal quotation marks omitted).  Here,

3 the New York Legislature’s intentis clear.  TheWage Parity Law was enacted in Part

4 H of chapter 59 of the 2011 Session Laws of New York State.  Section 110 of that

5 same Part states that, if any subdivision of the act “shall be adjudged” invalid, the

6 judgment “shall not . . . invalidate the remainderthereof, but shall be confined in its

7 operation to the . . . subdivision . . . directly involved.”  By severing subdivision four,

8 the district court properly followed this clear statutory command.  Moreover, we

9 agree with thedistrict courtthat, without subdivisionfour,theWageParityLaw will

10 still accomplish the legislative purpose of aligning home care aide compensation in

11 the New York City metropolitan area.

12 With subdivision four severed, ERISA does not preempt the remainder of the

13 Wage Parity Law.  Unlike the NLRA, ERISA contains an express provision that

14 preempts “any and all State laws insofar as they may now or hereafter relate to any

15 employee benefit plan.”  29 U.S.C. § 1144(a) (emphasis added).  The Supreme Court

16 has fashioned this expansive language into a test: “a state law is preempted if ‘it

17 (1) has a connection with or (2) reference to [an ERISA] plan.’”  Liberty Mut. Ins. Co.

21

Case 13-3790, Document 97-1, 03/27/2015, 1470865, Page21 of 32
1 v. Donegan, 746 F.3d 497, 504 (2d Cir. 2014) (quoting Shaw v. Delta Air Lines, Inc., 463

2 U.S. 85, 96‐97 (1983)) (emphasis omitted).  

3 The language of ERISA’s preemption clause is broadly worded.  Nonetheless,

4 the Supreme Court has cautioned against preempting “state action in fields of

5 traditional state regulation,” and has assumed“thatthe historic police powers ofthe

6 States were not to be superseded by the Federal Act unless that was the clear and

7 manifest purpose of Congress.”  N.Y. State Conf. of Blue Cross & Blue Shield Plans v.

8 TravelersIns. Co., 514 U.S. 645, 655 (1995) (internal quotation marks omitted).  ERISA

9 is designed to regulate employee welfare and pension benefit plans.  It does this not

10 by “requiring employers to provide any given set of minimum benefits,” butinstead

11 by “control[ling] the administration of benefits plans” through “reporting and

12 disclosure mandates.”    Id. at 651.    As a result, while its preemption provision

13 “sweep[s] more broadly than state laws dealing with . . . reporting, disclosure,

14 fiduciary responsibility, and the like,” its “basic thrust . . . [is] to avoid a multiplicity

15 of regulation in order to permit the nationally uniform administration of employee

16 benefit plans.” Id. at 657, 661 (internal quotation marks omitted); see also Liberty

17 Mut., 746 F.3d at 506‐07.  The statute does not preempt state laws that have “only an

22

Case 13-3790, Document 97-1, 03/27/2015, 1470865, Page22 of 32
1 indirect economic effect on ERISA plans.”  Liberty Mut., 746 F.3d at 507 (internal

2 quotation marks omitted).

3 Plaintiffs first contend that the Wage Parity Law has a “connection with”

4 ERISA plans because employers will have to reevaluate, and possibly enhance, their

5 benefits packages in orderto pay employees the “applicable minimum rate of home

6 care aide total compensation.”  Both the Supreme Court and this Court have held

7 that such an indirect effect on ERISA plans does not trigger preemption.  Instead,

8 only statutes that “mandate[] employee benefit structures or their administration”

9 have impermissible “connection[s] with” ERISA plans.  Travelers, 514 U.S. at 658;see

10 also Cal. Div. of Labor Standards Enf. v. Dillingham Constr., N.A., 519 U.S. 316, 328

11 (1997).  The Supreme Court has,forinstance, upheldstate laws thatrequirepayment

12 of a prevailing wage to certain apprentices on public works projects, see Dillingham,

13 519 U.S. at 319, and that impose surcharges on hospital bills for patients not covered

14 by Blue Cross/Blue Shield plans, Travelers, 514 U.S. at 649.   Both laws have an

15 “indirect economic influence” on how plan administrators structure plans, but do

16 not “bind plan administrators to any particular choice and thus function as a

17 regulation of an ERISA plan itself.”  Dillingham, 519 U.S. at 329‐31; see also Travelers,

18 514 U.S. at 659‐60.

23

Case 13-3790, Document 97-1, 03/27/2015, 1470865, Page23 of 32
1 We rejected an ERISA preemption challenge to § 220 of the New York Labor

2 Law for similarreasons in Burgio & Campofelice, Inc. v. New York Department of Labor,

3 107 F.3d 1000 (2d Cir. 1997).    Section 220 requires employers on public works

4 projects to pay employees a “prevailing rate” of compensation.  Id. at 1003.  The

5 prevailing rate must equal the combined value of wages and benefits guaranteed to

6 workers on private projects through “collective bargaining agreements” that cover

7 “workers in the same trade or occupation in the locality where the work is to be

8 performed.” Id. (citing N.Y. Lab. Law § 220(5)(a), (3)).  In upholding the law, we

9 observed that the statute may require employers to change their compensation

10 packages to comply with the prevailing rate requirement, but that it permits them

11 to do so “exclusively through ERISA plans, exclusively through non‐ERISA plans,

12 through additional cash wages, or through some combination of the three.”  Id. at

13 1009.    Because the law leaves administrators free to comply through means

14 unconnected to ERISA plans, we concluded that it lacked a sufficient “connection

15 with” such plans to require preemption.  Id.; accord WSB Elec., Inc. v. Curry, 88 F.3d

16 788, 796 (9th Cir. 1996); Keystone Chapter, Associated Builders & Contractors, Inc. v.

17 Foley, 37 F.3d 945, 958 (3d Cir. 1994).

24

Case 13-3790, Document 97-1, 03/27/2015, 1470865, Page24 of 32
1 The Wage Parity Law gives employers similar freedom to select the manner

2 in which they pay the “minimum rate of home care aide total compensation.”

3 Under the Law, “[t]otal compensation” may consist of “wages and other direct

4 compensation paid to or provided on behalf of the employee,” including “health,

5 education, or pension benefits, supplements in lieu of benefits and compensated

6 time off.”  N.Y. Pub. Health Law § 3614‐c(1)(b).  The statute is agnostic as to the mix

7 of wages and benefits that employers provide, so long as the total amount equals or

8 exceeds the applicable minimum rate.  Where, as here, “a legalrequirement may be

9 easily satisfied through means unconnected to ERISA plans . . . it‘affect[s] employee

10 benefit plans in too tenuous, remote, or peripheral a manner to warrant a finding

11 that the law ‘relates to’ the plan.’”  Burgio, 107 F.3d at 1009 (quoting Shaw, 463 U.S.

12 at 100 n.21).

13 In the alternative, Plaintiffs argue that the Wage Parity Law makes an

14 impermissible “reference to” an ERISA plan.  The Wage Parity Law, they note, sets

15 the “minimum rate” of compensation in New York City based on the “prevailing

16 rate of total compensation as of January [1, 2011],” if that amount is greaterthan the

17 rate required by the City’s Living Wage Law.    N.Y. Pub. Health Law § 3614‐

18 c(3)(a)(iii).  The “prevailing rate of total compensation” is the rate from the largest

25

Case 13-3790, Document 97-1, 03/27/2015, 1470865, Page25 of 32
1 collective bargaining agreement covering home care aides in New York City, id.

2 § 3614‐c(1)(c), which as of January 1, 2011 was SEIU 1199’s collective bargaining

3 agreement.  This agreement establishes and governs several ERISA plans.

4 Even assuming that such a tenuous link to ERISA plans constitutes a

5 “reference,” itdoes not warrantpreemption.  “In orderto triggerERISApreemption,

6 a statute must not merely mention or allude to an ERISA plan, but must also have

7 some relationship to ERISA plans or affect ERISA plans in some manner.”  Romney

8 v. Lin, 94 F.3d 74, 79 (2d Cir. 1996) (internal quotation marks and brackets omitted).

9 The Supreme Court has therefore “never found a statute to be preempted simply

10 because the word ERISA (or its equivalent) appears in the text.”  NYS Health Maint.

11 Org. Conf. v. Curiale, 64 F.3d 794, 800 (2d Cir. 1995).  Instead, the Court has reserved

12 preemption based on “reference[s] to” ERISA plans for situations where “a State’s

13 law acts immediately and exclusively upon ERISA plans . . . , or where the existence

14 of ERISA plans is essential to the law’s operation.”  Dillingham, 519 U.S. at 324‐25

15 (citing Mackey v. Lanier Collection Agency & Serv., Inc., 486 U.S. 825 (1988); Dist. of

16 Columbia v. Greater Wash. Bd. of Trade, 506 U.S. 125 (1992); and Ingersoll‐Rand Co. v.

17 McClendon, 498 U.S. 133 (1990)).  

26

Case 13-3790, Document 97-1, 03/27/2015, 1470865, Page26 of 32
1 The creation of ERISA plans by SEIU 1199’s collective bargaining agreement

2 has no more than a remote bearing on the Wage Parity Law’s operation.  Employers

3 are not required to match the benefits in SEIU 1199’s collective bargaining

4 agreement, or to provide benefits at all.  Indeed, employers need not even calculate

5 the benefits in SEIU 1199’s plan.    Instead, the Wage Parity Law requires the

6 Commissioner of the New York State Department of Health to calculate an “hourly

7 amount of total compensation” and promulgate that rate to employers.  See N.Y.

8 Pub. Health Law § 3614‐c(1)(c), (8).  This calculation converts all of the benefits from

9 SEIU 1199’s collective bargaining agreement — including those contained in its

10 ERISA plans — into a single hourly figure.    It is that final rate, and not its

11 component parts, that constitutes the “applicable minimum rate of home care aide

12 total compensation.”    Id. § 3614‐c(2).    The Wage Parity Law would operate in

13 precisely the same way even if SEIU 1199‘s collective bargaining agreement did not

14 cover ERISA plans at all.  The Wage Parity Law, then, “functions irrespective of . . .

15 the existence of an ERISA plan.”  Dillingham, 519 U.S. at 328 (internal quotation

16 marks omitted).  Accordingly, the statute’s attenuated allusion to such plans does

17 not warrant preemption.

27

Case 13-3790, Document 97-1, 03/27/2015, 1470865, Page27 of 32
1 C. Fourteenth Amendment Claims

2 Finally,thedistrict court concludedthattheWageParity Law does not violate

3 Plaintiffs’ rights under the Equal Protection and Due Process Clauses of the

4 Fourteenth Amendment.  We agree.

5 “[E]qual protection is not a license for courts to judge the wisdom, fairness,

6 orlogic of legislative choices.”  FCC v. Beach Commc’ns, Inc., 508 U.S. 307, 313 (1993).

7 “Social and economic legislation,” like the Wage Parity Law, “that does not employ

8 suspect classifications or impinge on fundamental rights must be upheld against

9 equal protection attack when the legislative means are rationally related to a

10 legitimate governmental purpose.”   Hodel v. Indiana, 452 U.S. 314, 331 (1981).  Such

11 laws carry a “presumption of rationality that can only be overcome by a clear

12 showing of arbitrariness and irrationality.”  Id. at 331‐32.

13 The Wage Parity Law sets the “minimum rate of home care aide total

14 compensation” in both New York City and the surrounding Counties as a

15 percentage of New York City’s Living Wage Law.  This approach is consistent with

16 the Legislature’s goal of providing “high quality home care services to residents of

17 New York state.”  N.Y. Pub. Health Law § 3600.  As the Appellate Division, Third

18 Department, explained:

28

Case 13-3790, Document 97-1, 03/27/2015, 1470865, Page28 of 32
1 By referring to the New York City statute, the Wage Parity law aims to

2 bring total compensation for Medicaid‐reimbursed home care aides in

3 the metropolitan New York area into line with compensation paid to

4 aides who are under contract with New York City, thereby furthering

5 the legislative purpose of stabilizing the workforce,reducing turnover,

6 and enhancing recruitment and retention of home care workers.

7

8 Concerned Home Care Providers, 969 N.Y.S.2d at 213.  The Wage Parity Law therefore

9 easily passes muster under rational basis review.

10 Plaintiffs counterthat, by relying on a rate set by a legislative body outside the

11 surrounding Counties,theLaw infringes on the fundamentalrightto representation

12 in the legislative process and thus warrants strict judicial scrutiny.  The Supreme

13 Court has recognized that “citizens have an equal interest in representative

14 democracy, and that the concept of equal protection therefore requires that their

15 votes be given equal weight.”  Town of Lockport v. Citizensfor Cmty. Action at the Local

16 Level, Inc., 430 U.S. 259, 265 (1977); see also Reynolds v. Sims, 377 U.S. 533, 565 (1964).

17 But Plaintiffs — five corporations and a not‐for‐profit trade organization — are not

18 entitled to vote and have no rightto equalrepresentation in the legislature.  On these

19 facts, the district court correctly refused to subject the Wage Parity Law to strict

20 judicial scrutiny, and we reject Plaintiffs’ equal protection challenge.

29

Case 13-3790, Document 97-1, 03/27/2015, 1470865, Page29 of 32
1 The argument that the Wage Parity Law violates Plaintiffs’ rights under the

2 Fourteenth Amendment’s Due Process Clause by delegating authority to a private

3 entity — namely, SEIU 1199 — fares no better.    “Governmental action may be

4 challenged as a violation of due process only when it may be shown that it deprives

5 a litigant of a property or a liberty interest.”  Gen. Elec. Co. v. N.Y. State Dep’t of Labor,

6 936 F.2d 1448, 1453 (2d Cir. 1991).  If a party has a property interest, legislative

7 bodies “maynot constitutionallydelegate” toprivate actors “thepowertodetermine

8 the nature of rights to [that] property . . . without supplying standards to guide the

9 private parties’ discretion.”  Id. at 1455.  

10 The complaint does not allege that New York is withholding Medicaid funds

11 for services that Plaintiffs have already provided.    Instead, Plaintiffs claim a

12 property right in the future “revenues generated by their business.”  J.A. 24.  The

13 Wage Parity Law, however, applies only to the payment of state Medicaid funds,

14 and “[i]t is fundamental that a Medicaid provider has no property interest in or

15 contractright to reimbursement at any specific rate or, for that matter, to continued

16 participation in the Medicaid program at all.”  Rye Psych. Hosp. Ctr., Inc. v. New York,

17 576 N.Y.S.2d 449, 450 (3d Dep’t 1991) (citing Kaye v. Whalen, 44 N.Y.2d 754, 755

18 (1978)); see also Senape v. Constantino, 936 F.2d 687, 691 (2d Cir. 1991).  Accordingly,

30

Case 13-3790, Document 97-1, 03/27/2015, 1470865, Page30 of 32
1 Plaintiffs have not adequately pled a violation of their due process rights.    See

2 Oberlander v. Perales, 740 F.2d 116, 120 (2d Cir. 1984).

3 Moreover, theWage Parity Law does not delegate decision‐making authority

4 to SEIU 1199.  The New York Legislature approved the Wage Parity Law on March

5 31, 2011.  Although the statute defines the “prevailing rate of total compensation”

6 in terms of the largest collective bargaining agreement covering home care aides in

7 New York City, only the “prevailing rate of total compensation as of January [1,

8 2011],” sets the minimum rate of total compensation.  See N.Y. Pub. Health Law

9 § 3614‐c(1)(c), (3)(a)(iii).  The Legislature therefore selected a particular, preexisting

10 version of the largest collective bargaining agreement in the City.  SEIU 1199 has no

11 discretion to make post‐hoc alterations to that agreement, and its future collective

12 bargaining efforts have no bearing on the minimum rate of home care aide total

13 compensation.    As a result, even if Plaintiffs had a property interest in future

14 Medicaid reimbursements, their due process challenge would fail.

15 CONCLUSION

16 We have considered Plaintiffs’ remaining arguments and find them to be

17 without merit.  Because we conclude that the Wage Parity Law is not preempted by

31

Case 13-3790, Document 97-1, 03/27/2015, 1470865, Page31 of 32
1 the NLRA or by ERISA (setting aside subdivision four), and that the Law is not a

2 violation of Plaintiffs’rights underthe Equal Protection and Due Process Clauses of

3 the Fourteenth Amendment, the judgment of the district court is AFFIRMED.

32

Case 13-3790, Document 97-1, 03/27/2015, 1470865, Page32 of 32