July 21, 2006


Court voids 'Wal-Mart law': U.S. district judge says Md. violated federal authority (Matthew Dolan, Stephanie Desmon and Andrea Walker, July 19, 2006, Baltimore Sun)

Republican Gov. Robert L. Ehrlich Jr.] told reporters Wednesday that he felt vindicated by the court's decision and accused Senate President Thomas V. Mike Miller and House Speaker Michael E. Busch of endorsing an anti-business bill that threatened to harm one of the state's largest employers. [...]

The Maryland Fair Share Health Care Fund Act requires that companies with more than 10,000 workers spend at least 8 percent of their payroll for employee health care or make up the difference in an equivalent payment to the state.

Of the four companies that size operating in the state, only Wal- Mart matched the criteria set out in the law, leading the company to charge that it had been singled out unfairly. The law was due to take effect in January 2007.

Lawyers for the state argued that Wal-Mart had options under the new law to pay a tax to the state, estimated at $6 million a year, in lieu of additional health care payments for employees.

That alternative meant the Maryland statute would not conflict with federal law, the state's lawyers claimed.

But in February, a trade group filed suit in federal court on behalf of the Wal-Mart to strike down the law as passed, saying federal rules don't allow states to spell out how companies allocate benefits.

In the 32-page decision released Wednesday, U.S. District Court Judge J. Frederick Motz largely agreed, writing that his ruling adhered to "long established Supreme Court law that state laws which impose employee health or welfare mandates on employers are invalid under" the federal Employment Retirement Income Security Act of 1974, known as ERISA.

Motz, who was nominated to the bench by President Ronald Reagan in 1985, further ruled that the law harmed Wal-Mart by requiring the company to make reports to the state about its payroll and health care contributions, a requirement that was not imposed on other employers in the state.

Those problems were enough to doom the law, the judge ruled.

Posted by Orrin Judd at July 21, 2006 2:16 PM
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