Source: http://www.chanrobles.com/usa/us_supremecourt/490/107/case.php
Timestamp: 2018-01-16 11:43:09
Document Index: 682110875

Matched Legal Cases: ['§ 514', '§ 3', '§ 1002', '§ 3', '§ 505', '§ 1135']

Under the Massachusetts law, an employer is required to pay a discharged employee his full wages, including holiday or vacation payments, on the date of discharge. Similar wage payment statutes have been enacted by 47 other States, [Footnote 2] the chanroblesvirtualawlibrary
Respondent moved to dismiss the criminal complaints on the ground that the Massachusetts statute, insofar as it applied to these complaints, had been preempted by ERISA. He argued that the Bank's vacation policy constituted an "employee welfare benefit plan" under the Act, and that the State's prosecution of him for failure to comply with the policy therefore ran afoul of § 514(a) of the Act, 29 U.S.C. chanroblesvirtualawlibrary
The Supreme Judicial Court held that the policy constituted an employee welfare benefit plan, and that the prosecution was preempted by ERISA. 402 Mass. 287, 522 N.E.2d 409 (1988). The court found that, under the plain language of the statute and its earlier decision in Barry v. Dymo Graphic Systems, Inc., 394 Mass. 830, 478 N.E.2d 707 (1985), the Bank's policy constituted a plan, fund, or program for the purpose of providing its participants vacation benefits. It rejected the Commonwealth's argument that a regulation promulgated by the Secretary of Labor (Secretary), [Footnote 6] chanroblesvirtualawlibrary
ERISA was passed by Congress in 1974 to safeguard employees from the abuse and mismanagement of funds that had been accumulated to finance various types of employee benefits. Fort Halifax Packing Co. v. Coyne, 482 U. S. 1, 482 U. S. 15 chanroblesvirtualawlibrary
ERISA § 3(1), as codified, 29 U.S.C. § 1002(1). [Footnote 8] chanroblesvirtualawlibrary
The interpretation of § 3(1) is governed by the familiar principles that "words grouped in a list should be given related meaning,'" chanroblesvirtualawlibrary
This conclusion is supported by viewing the reference to vacation benefits not in isolation, but in light of the words that accompany it and give the provision meaning. Section 3(1) subjects to ERISA regulation plans to provide medical, sickness, accident, disability, and death benefits, training programs, day care centers, scholarship funds, and legal services. The distinguishing feature of most of these benefits is chanroblesvirtualawlibrary
The Secretary, who is specifically authorized to define ERISA's "accounting, technical, and trade terms," ERISA § 505, 29 U.S.C. § 1135, [Footnote 11] and to whose reasonable views we give deference, 467 U. S. 843 (1984); Watt v. Alaska, 451 U. S. 259, 451 U. S. 272-273 (1981); Udall v. Tallman,@ 380 U. S. 1, 380 U. S. 16 (1965), has also so understood the statute. In a Notice of Proposed Rulemaking published shortly after the effective date of the Act, the Secretary identified a basic chanroblesvirtualawlibrary
The proposed regulations promulgated by the Secretary were adopted without significant modification. They provide that numerous "payroll practices," including the payment of vacation benefits "out of [an] employer's general assets" rather than from a trust fund, are not employee chanroblesvirtualawlibrary
A contrary interpretation, including routine vacation pay policies within ERISA, would have profound consequences. Most employers in the United States provide some type of vacation benefit to their employees. [Footnote 15] ERISA coverage would put all these employers to the choice of complying with the statute's detailed requirements for reporting and disclosure or discontinuing the practice of compensating employees for unused vacation time. In addition, the extension of ERISA to claims for vacation benefits would vastly expand the jurisdiction of the federal courts, providing a federal chanroblesvirtualawlibrary
Respondent argues that, even if the Department of Labor regulation exempting vacation payments from ERISA constitutes a reasonable construction of the Act, the Bank's policy did not constitute a payroll practice under the regulation because employees were allowed, at their option, to accumulate vacation time and defer payment for such time until termination. See Brief for Respondent 11. We do not agree. Although neither of the Secretary's regulations explicitly covers the precise practice at issue in this case, the reasons for treating holiday and weekend premiums and payments of compensation while an employee is on vacation as "payroll chanroblesvirtualawlibrary
In reaching this conclusion, we emphasize that the case before us -- and the Secretary's regulations on which we rely -- concern payments by a single employer out of its general assets. An entirely different situation would be presented if a separate fund had been created by a group of employers to guarantee the payment of vacation benefits to laborers who regularly shift their jobs from one employer to another. Employees who are beneficiaries of such a trust face far different risks and have far greater need for the reporting and disclosure requirements that the federal law imposes than those whose vacation benefits come from the same fund from which they receive their paychecks. It is sufficient for this case that the Secretary's determination that a single employer's chanroblesvirtualawlibrary