Court Opinion

ID: 9431000
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:31:05.892191+00
Date Added: 2024-06-11T17:23:26.646742
License: Public Domain

Justice White,
with whom The Chief Justice, Justice O’Connor, and Justice Scalia join, dissenting.
The Court rejects appellant’s pre-emption challenge to Maine’s severance pay statute by reasoning that the statute does not create a “plan” under ERISA because it does not require an “administrative scheme” to administer the payment of severance benefits. By making pre-emption turn on the existence of an “administrative scheme,” the Court creates a loophole in ERISA’s pre-emption statute, 29 U. S. C. § 1144, which will undermine Congress’ decision to make employee-benefit plans a matter of exclusive federal regulation. The Court’s rule requiring an established “administrative scheme” as a prerequisite for ERISA pre-emption will allow' States to effectively dictate a wide array of employee benefits that must be provided by employers by simply characterizing them as non-“administrative.” The Court has also chosen to ignore completely what precedent exists as to what constitutes a “plan” under ERISA. I dissent because it is incredible to believe that Congress intended that the broad preemption provision contained in ERISA would depend upon the extent to which an employer exercised administrative foresight in preparing for the eventual payment of employee benefits.
*24ERISA pre-empts “any and all State laws insofar as they may now or hereafter relate to any employee benefit plan . . . 29 U. S. C. §1144. Congress defined an “employee welfare benefit plan” as “any plan, fund, or program which was'heretofore or is hereafter established or maintained by an employer or an employee organization” and which provides certain benefits, including severance pay. 29 U. S. C. §1002(1). See Gilbert v. Burlington Industries, Inc., 765 F. 2d 320, 325 (CA2 1985), summarily aff’d, 477 U. S. 901 (1986). A state law “which requires employers to pay em-_ ployees specific benefits clearly ‘relate[s] to’ benefit plans” as contemplated by ERISA’s pre-emption provision. Shaw v. Delta Air Lines, Inc., 463 U. S. 85, 97 (1983). I would have thought this to be the end of the pre-emption inquiry. Here, the Maine statute clearly creates an employee benefit plan, and having created an ERISA plan, the statute plainly “relates to” such a plan. The Maine Supreme Judicial Court, in effect, acknowledged as much, but held that Maine’s statute was not pre-empted by ERISA because it was created by the state legislature instead of by a private employer. Apparently recognizing the flaw inherent in this reasoning, the majority nevertheless struggles to achieve its desired result by asserting that the statute does not create a “plan” because it does not require an employer to establish an administrative scheme. I cannot accept this conclusion.
First, § 1002(1) establishes no requirement that a “plan” meet any specific formalities or that there be some policy manual or employee handbook to effectuate it. Cf. ante, at 14-15, n. 9. In reading such a requirement into § 1002(1), the majority ignores the obvious: when a Maine employer is called upon to discharge its legislatively mandated duty under the severance pay statute, the funds from which it pays the benefits do not materialize out of thin air. The Maine Legislature has presumed, as it is so entitled, that employers will comply with the dictates of the statute’s requirements. That an employer’s liability is contingent upon an *25event that may never happen does not make the plan that the legislature has imposed upon employers any less of a plan. And that there may be imprudent employers who either are unaware of the severance pay statute or order their business affairs as if the statute’s obligations do not exist — and it is upon the behavior of this class of employers that the majority seemingly relies in concluding that the severance pay statute does not embody an “administrative scheme” — in no way supports the remarkable conclusion that the statutory obligations do not constitute a plan for the payment of severance benefits.
Second, in concluding that Maine’s statute does not establish a “plan” as contemplated by ERISA, the Court overrules, sub silentio, recent decisions of this Court. Gilbert v. Burlington Industries, Inc., supra, involved an employer’s policy to pay severance benefits to employees who were involuntarily terminated. The employer had no separate fund from which to make severance pay payments, and, of particular note, there was virtually no “administrative scheme” to effectuate the program: “The granting or denial of severance pay was automatic upon termination. Plaintiffs [employees] allege that Burlington never sought to comply with ERISA respecting its severance pay policy. That is, they claim that: it never published or filed an annual report, a financial statement, a plan description or a statement of plan modifications; it did not designate a fiduciary for the plan or inform employees of their rights under ERISA and the plan; there was no established claims procedure; and, apart from the company’s ‘open door’ grievance policy, there was no established appeals procedure.” Gilbert, 765 F. 2d, at 323. The employees and numerous amici claimed that “a promise or agreement to pay severance benefits, without more, does not constitute a welfare benefit plan within the meaning of ERISA.” Id., at 324. The Second Circuit rejected this contention, id., at 325, and we summarily affirmed, 477 U. S. 901 (1986). See *26also Holland v. Burlington Industries, Inc., 772 F. 2d 1140 (CA4 1985), summarily aff’d, 477 U. S. 901 (1986).
The Court characterizes Standard Oil Co. of California v. Agsalud, 633 F. 2d 760, 766 (CA9 1980), summarily aff’d, 454 U. S. 801 (1981), as holding that ERISA pre-empted Hawaii’s health care statute because it impaired employers’ ability to “structure] [their] administrative practices according to a set of uniform guidelines.” Ante, at 13. But that case involved more than administrative uniformity. Indeed, in Agsalud, the Ninth Circuit expressly rejected the argument that ERISA was concerned only with the administration of benefit plans, not state statutes which require employers to provide particular employee benefits: “Appellants in the district court argued that since ERISA was concerned primarily with the administration of benefit plans, its provisions were not intended to prevent the operation of laws like the Hawaii Act pertaining principally to benefits rather than administration. There is, however, nothing in the statute to support such a distinction between the state laws relating to benefits as opposed to administration.” 633 F. 2d, at 765. The Ninth Circuit held that the Hawaii Act “directly and expressly regulates employers and the type of benefits they provide employees. It must ‘relate to’ employee benefit plans within the meaning of ERISA’s broad pre-emption provision . . . .” Id., at 766. Representatives of the State of Hawaii appealed to this Court, No. 80-1841, claiming, inter alia, that the State’s police power permits it to require employers to provide certain employee benefits, and that Hawaii’s statute “in no way conflicts with any substantive provision in ERISA, since that statute requires no benefits at all.” Juris. Statement, O. T. 1981, No. 80-1841, p. 7. We disagreed and summarily affirmed. 454 U. S. 801 (1981).
The Court’s “administrative-scheme” rationale provides States with a means of circumventing congressional intent, clearly expressed in § 1144, to pre-empt all state laws that relate to employee benefit plans. For that reason, I dissent.