Appeals Court Upholds Wal-Mart Health Benefits Decision

The U.S. Court of Appeals for the 4th Circuit today upheld a lower court's decision to strike down Maryland's Fair Share Health Care legislation, which would have required Wal-Mart to spend at least 8 percent of its payroll on health benefits or contribute to a state insurance plan for the poor.

Judge Paul V. Niemeyer, the opinion's author, concluded that the bill conflicted with the federal Employment Retirement Income Security Act, which allows companies to create a uniform system of benefits across several states. The Maryland law would have forced Wal-Mart to make special accommodations for employees in that state, Niemeyer wrote.

"This is precisely the regulatory balkanization that Congress sought to avoid by enacting ERISA's preemption provision," he wrote.

Judge William B. Traxler Jr. joined Niemeyer in his decision, while Judge M. Blane Michael dissented.

Wal-Mart has been assailed by labor groups, which say the giant retailer does not provide adequate health-care benefits for its workers. The Maryland legislation, which had union support, was passed by the General Assembly last year and quickly became a model for states and counties considering similar action.

The Retail Industry Leaders Association, which counts Wal-Mart among its members, filed suit in U.S. District Court in Baltimore shortly after the bill was passed. Judge J. Frederick Motz ruled in favor of the group in July, striking down the law.

RILA President Sandy Kennedy today praised the appeals court decision, saying it "sends a strong message that similar bills under consideration in other states and municipalities also violate federal law."

Christine Hansen, a spokeswoman for the Maryland attorney general's office, said it was reviewing the ruling and had no comment. The state has 14 days to file a petition for a rehearing, she said.