Document: 451 U.S. 504 101 S.Ct. 1895 68 L.Ed.2d 402 Joseph ALESSI et al., Appellants,v.RAYBESTOS-MANHATTAN, INC., al. Henry BUCZYNSKI Petitioners, v. The GENERAL MOTORS CORPORATION Nos. 79-1943, 80-193. Argued March 4, 1981. Decided May 18, Syllabus In two suits initiated in New Jersey state court, retired employees who had received workers' compensation awards subsequent to retirement challenged the validity of provisions their employers' pension plans reducing a retiree's benefits by an amount equal award for which retiree is eligible. These private are subject federal regulation under Employee Retirement Income Security Act 1974 (ERISA). employers independently removed Federal District Court, where judges each suit held that offset were invalid provision Workers' Compensation prohibiting such offsets; Congress not intended ERISA pre-empt laws; offsets prohibited ERISA's provision, 29 U.S.C. § 1053(a), forfeitures rights except specified conditions inapplicable these cases; and Treasury Regulation authorizing based on was invalid. Court Appeals consolidated appeals from decisions reversed. Held : 1. contemplated approved kind here. Pp. 509-521. (a) Pension plan do contravene nonforfeiture provisions. While 1053(a) prohibits vested rights, with exceptions include offsets, nevertheless other make it clear leaves parties creating determination content or that, once vested, cannot be forfeited. statutory definition "nonforfeitable" benefits, 1002(19), assures employee's claim protected benefit legally enforceable, but does guarantee particular method calculating benefit. Cf. Nachman Corp. Benefit Guaranty Corp., 446 359, 100 1723, 64 354. It particularly pertinent did prohibit "integration," calculation practice levels determined combining funds public income streams available employee. Rather, accepted expressly preserving option fund integration both Social Railroad Act. Offsets against work much like payments, thus has no more applicability former than latter. 510-517. (b) Although neither nor its legislative history mentions compensation, forbid permitting reductions laws, Internal Revenue Service rulings same effect. There merit argument awards, work-related injuries, lacks rationale behind permission supply payments wages lost due retirement. Both Acts also provide disability, permits as well Moreover, when enacted ERISA, knew IRS left them 517-521. 2. statute question pre-empted law insofar eliminates governed ERISA. 1144(a), stating Act's shall supersede any laws "relate [covered] employee plan," demonstrates meant establish exclusively concern. Regardless whether purpose might have been protect right disability rather regulate plans, "relate[s] plans" because one benefits—integration—that permitted law, impermissible intrusion regulatory scheme. moment intrudes indirectly, through directly, called "pension regulation," since makes even indirect action bearing pensions may encroach upon area exclusive where, here, emerge collective bargaining, additional interest precluding interference labor-management negotiations calls pre-emption efforts terms. 521-526. 616 F.2d 1238, affirmed. Theodore Sachs, Detroit, Mich., appellants No. 79-1943. Marc C. Gettis, Roselle Park, N. J., petitioners Laurence Reich, Newark, respondent Warren J. Casey, Morristown, appellees Justice MARSHALL delivered opinion Court. 1 Some reduce cases we consider lawful (ERISA), 88 Stat. 829, amended, 1001 seq. (1976 ed. Supp. III), they law. 2 * Raybestos-Manhattan, Inc., General Motors maintain reduced, offset, individual eligible.1 1977, Legislature amended offsets. amendment states "[t]he granted this chapter set off employees' payments." N.J.Stat.Ann. 34:15-29 (West 1980-1981) (as 1977 N.J.Laws, ch. 156). 3 Alleging violations court. plaintiffs obtained plans.2 defendant companies United States Jersey. There, Judges ruled concluded sort. 203(a) 1053(a). This section four specific cases.3 would forbidden forfeitures, struck down contrary offsets.4 4 Third Circuit 1238 (1980). rejected Judges' view caused forfeiture 1053. Instead, reasoned, merely fashion receiving benefits. Accordingly, found conflict between approving Finally, court forbidding could withstand general 1144(a). We noted probable jurisdiction appeal taken certiorari petition 449 949 950, 351 352, 66 213 For convenience, refer retirees. affirm judgment Appeals. II 5 Retirees inconsistent claims require examination relevant sections 6 As recently observed, "comprehensive reticulated statute," adopted after careful study plans. 361, 1726, 354 Nachman, observed wanted ensure "if worker promised defined retirement—and if he fulfilled whatever required obtain benefit—. . actually receives it." Id., at 375, S.Ct., 1733.5 reason, concepts nonforfeitable critical See id., 370, 378, 1730, 1734. prescribes vesting accrual schedules, assuring least portions normal leave positions prior retirement.6 Most critically, establishes "[e]ach his attainment age." 1053(a).7 7 rely sweeping assurance become claiming offsetting those violates argue first forfeited provided Second, retirees assert fall into none express exceptions. correct; 1053(a)(3), among section.8 8 Despite facial accuracy, retirees' overlooks threshold issue: what defines forfeited? largely plan. That parties, Government, control level language defining "a participant beneficiary part immediate deferred arises participant's service, unconditional, enforceable plan." 1002(19). construing last Term, observed: 9 "[T]he term 'forfeiture' normally connotes total loss consequence some event limit value person's rights. Each examples described causing listed [§ 1053(a)(3)] describes event—such death temporary re-employment—that otherwise construed entire therefore surely consistent describing quality collect." U.S., 372-373, 1731-1732. 10 Similarly, explained "it benefit, itself, must 'unconditional' 'legally plan.' " 371, 1731. 11 Rather imposing mandatory methods outer bounds permissible practices, 1054(b)(1), three alternative schedules 1053(a)(2). so doing, limited variation rates applicable across period participation plan.9 And disapproved practices unduly delaying acquisition enforce payment portion already accrued, without further employment.10 together assure minimum 100% created covered completed 15 years service aged 45 older service.11 Other restrictions, formulas determining before completion vary §§ 1002(22), (23) (benefits "under plan"). 12 our purposes employees. Through integration, stream contributes pool distributed all employees, nonpension only subgroup integrated maintenance programs, Security, basis funds. Under practice, eligibility advantage participants plan, addition anticipated permit higher average payout participant. group profit level, although reach combination source. addition, allows employer attain selected drawing resources, which, depend contributions. 13 Following extensive adoption preserved Act, 42 401 1974, 231 III); 1054(b)(1)(B)(iv), 1054(b)(1)(C), 1054(b)(1)(G). aware pooling cost employers. Indeed, considering option, House Ways Means Committee acknowledged tension primary goal benefiting subsidiary containing costs. Report proposed bill 14 "not affect ability use procedures pay individuals currently social security liberalized. Your committee, however, believes raise important issues. On hand, objective increasing considered frustrated extent low moderate incomes reduced result procedures. your committee very many present fully partly elimination substantially increase financing Employees, whole, injured aided increases resulted slowing growth perhaps eliminat[ing] plans." H.R.Rep.No.93-807, p. 69 (1974), reprinted Legislative History (Committee Print compiled Senate Labor Public Welfare) 3189 (1976) (Leg.Hist.)12 problem recommended impose restriction payments. recommendation forbade authorized took 1056(b). 1054(b)(1)(C); 69, Leg.Hist. 3189; U.S.Code Cong. & Admin.News 4639. 26 401(a)(15). 16 setting limitation it. find necessary add exemption stringent protections circumstances, unpersuaded own force awards. Such remains entitled established compensation. analogous reduction congressional promoting system giving avenues cutting obligations—underlies possibilities. 17 Nonetheless, mention equally silent point. An advanced mentioned A current issued Service, goes further, now itself B 18 Codified CFR 1.411(a)-(4)(a) (1980), provides "nonforfeitable forfeitable reason fact take account State benefits." interprets 411, Code replicates 1053(a).13 plainly encompasses laws. Rulings corresponding See, e. g., Rev.Rul. 69-421, Part 4(j), 1969-2 Cum.Bull. 72; 68-243, 1968-1 157.14 19 contend effect They object approval objection precluded conclusion procedure per se prescribed Retirees' remaining different rubric. 20 Developing argument, while solely Because distinction, conclude Retirement. presumes there identity But clearly share ascribed petitioners. retirement, distinguishing kinds 21 Furthermore, effect.15 draw line prefer to, instead within ambit integration. base allowance factors: contribute funds, designed use, correspond employed considerations E. 157. contrast, disallowed damages recovered common-law employer. 4(j)(4), 157-158.16 reimbursement medical expenses fixed sums made bodily impairment match up qualified 78-178, 1978-1 118.17 unemployment for, layoffs, too comparable 117-118. 22 Without speaking directly rationale, embraced rulings. H.R.Conf.Rep.No.93-1280, 277 4544 (approving existing antidiscrimination rules). thereby along lines specifically allowed Our judicial function second-guess policy legislature, matter how appealing rationales. 23 final should defer legislature. To turn. III 24 attempted outlaw clauses providing [the Act] Supp.1980) (emphasis added).18 resolve govern, determine analysis guided respect separate spheres governmental authority federalist system. Supremacy Clause invalidates "interfere with, .," Gibbons Ogden, Wheat. 1, 211, L.Ed. (1824), 'exercise supremacy lightly presumed,' York Dept. Services Dublino, 413 405, 413, 93 2507, 2513, 37 688 (1973), quoting Schwartz Texas, 344 199, 203, 73 232, 235, 97 (1952). reiterated "[p]re-emption favored 'in absence persuasive reasons either nature regulated conclusion, unmistakably ordained.' Chicago North Western Transp. Co. Kalo Brick Tile Co., 450 311, 317, 1124, 1130, 67 258 (1981), Florida Lime Avocado Growers Paul, 373 132, 142, 83 1210, 1217, 248 (1963). Jones Rath Packing 430 519, 525-526, 1305, 1309-1310, 51 604 (1977); Perez Campbell, 637, 649, 91 1704, 1711, 233 (1971); Rice Santa Fe Elevator 331 218, 230, 1146, 1152, 1447 (1947); Hines Davidowitz, 312 52, 61-62, 61 399, 401-402, 85 581 (1941). 25 instance, assisted explicit statement about pre-emptive action. scope protection "the subchapter hereafter relate 1003(a) title exempt 1003(b) title." 27 depart previous legislation "envisioned exercise power over funds," Malone White Motor 435 497, 512, 514, 98 1185, 1193, 1194, 55 443 (1978) (plurality opinion), concern.19 apply characterized "that relate[s] 1144(a).20 phrase gives rise confusion asserted ostensibly regulating quite governs State's obviously police power. result, below "is way concerned qua contrary, protecting worker's Buczynski 456 F.Supp. 867, 873 (NJ 1978). Judge reasoned "only collateral Alessi Civ. 78-0434 (NJ, Feb. 15, 1979). analyses grounds. read "its dictionary sense" indicating broad intent, [New Jersey] forth requirement plans," F.2d, 1250 original). 28 agree reached arrive route. Whatever statute, moneys interpretation approves exact addressed Jersey's effort ban applies technique. need scheme.21 regulation." "State" include: State, political subdivision thereof, agency instrumentality either, purports regulate, terms subchapter." 1144(c)(2) added). authors preclude avoiding form substance provision. 30 Another consideration bolsters bears techniques, discretion designers. supra, 514-516. Where, Teamsters Oliver, 358 283, 296, 79 297, 304, (1959); Railway Employees Hanson, 225, 76 714, 718, 1112 (1956). Coach Lockridge, 403 274, 1909, 473 San ¢s526¢s Building Trades Council Garmon, 359 236, 773, 775 (1959).22 themselves expressions requiring intrusive law.23 IV 31 decision 32 Affirmed. 33 BRENNAN cases. provides: "All Member eligible receive statutes pertaining workmen's occupational disease, cash sickness similar Presently time time, paid concurrently Income." clause "In monthly payable Plan, deduction unless equivalent Workmen's (including compromise redemption settlements) States, enacted, deductions premiums, taxes expense Corporation, following: "(a) allocated hospitalization expense, member, industrial vision. "(b) Compromise settlements date payable. "(c) filed later breaking seniority." sought permanently enjoin recover made. Similar relief pursued 80-193, several brought behalf others similarly situated. n. 8, infra. 1.411(a)-4(a) findings declaration policy, "despite enormous long employment losing owing lack 1001(a). prescribe standards response problems. Ibid. expectations defeated, rules participation, 1051-1061; funding solvency 1081-1085; fiduciary managers, 1101-1114; insurance program case termination, 1341-1348 III). techniques 1054(b)(1). 9, Similarly schedules. age given length guaranteed 10, "normal benefit" greater early commencing 1002(22). exempts that: (1) contingent death, 1053(a)(3)(A); (2) occur takes job certain 1053(a)(3)(B); (3) retroactive amendments 1053(a)(3)(C); (4) withdrawals derived contributions, 1053(a)(3)(D). correctly point out categories. One percentage accrued year. 1054(b)(1)(A). formula rate year beyond 1054(b)(1)(B). third essentially pro rata rule year, proportionate number compared appropriate age. 1054(b)(1)(C). delay Thus, specifies hinged reaching lose continue working until can calculated formulas, gradual percentages time. Compare 1053(a)(2)(A) 1053(a)(2)(B), (C). Schiller, Proposed Vesting Regulations: Not What Seem Be, J.Corp.L. 263 (1981) (discussing implementation provisions). essence, qualifying tax treatment advantageous contributions 1053(a)(1), (2). results Alternatively, comply percent contributions." 1053(a)(2)(A). vesting, nonforfeiture, discussed H.R.Rep.No.93-807 identical ultimately reported Conference included restrict temporarily occurring December 31, 1971. 131 4405; Senator Harrison Williams deleted because: "We told will greatly costs something I am sure Senators see occur. true increased termination Certainly intent improve encourage expansion 120 Cong.Rec. 29928 4732. "legislative" regulation, restricted review applied "interpretive rules." 1242. Government here represents interpretive rule. Brief Amicus Curiae 19, n.12. empowered enact choose issue nonlegislative statements, scrutiny rules, deference practice. Batterton Francis, 432 416, 425, n.9, 2399, 2405, 53 464 Marshall, 208 U.S.App.D.C. 321, 332-333, 648 694, 705-706 (1980); K. Davis, Administrative Law Treatise 7.8 (2d despite agency, guarantees annuity, related thereto, employment, surviving beneficiary, Retirement, recipient." 2605.2 codification contemporaneous administrative developed IRS. 1.401-3(e) (1973); 70-74; 12, 1953-1 290. implemented Code, 401(a)(4), forbids favorable discriminating favor company officers, shareholders, highly compensated enactment discrimination differences "because law." 401(a)(5) ed., consistently interpreted making public. 69-4, 1969-1 118; 69-5, 125; 157; 61-75, 1961-1 140. reported: conferees intend areas schedule changed. coverage, remain effect." 4544; 5058. treated tort resembles judgments explain typically finding employer's fault injury. generally showing A. Larson, 2.10, 6.00 (1979). treating sources differently, program, responding wage loss, remuneration injury, group. 96.10, 97.10, 97.50. Richardson Belcher, 404 78, 83, 92 254, 258, (1971) (reductions comports process). light, proffered retirees—that systems integrated—and departed reasoning concluding replacing wages, cause. finds most compelling, position reasonable consonant note avoids ambiguity disallows impairment. n.1, supra. point, certainly regulation. Adopted reversed collectively bargained agreements. Appellee pp. 6-7. concern is, itself. explicitly preserves "insurance, banking, securities," 1144(b)(2)(A); "generally criminal law[s] State," 1144(6)(2)(B)(4). coverage 1144(b)(2)(B). 383 4650. relating exemptions conceivable relevance pertains governing "maintained complying laws." 1003(b)(3). 80-193 concede exception maintained Petitioners 44. 'comply [an] law' preempted then fortiori underlying escapes coverage." Reply Appellants 18. wreaks havoc plain language, pre-empts "State survive exempted scope. compliance laws—has involved broadly serve needs bargaining. not, cannot, free courts varying conclusions meaning contexts. American Telephone Telegraph Merry, 592 118 (CA2 1979); Stone Stone, 919 (N.D.Cal.1978); Gast 36 Or.App. 441, 585 P.2d (1978). views merits decisions. light reading declined National Relations 1250, 17. was, (N.J., labor extend far conduct touching deeply rooted local concerns. (citing Diego 244, 779. contexts, compelling direct clash keep legislation. context, themselves, new follows naturally plurality role pre-empting 513-514, 1194-1195. longer applies, eliminated

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