A federal judge in Baltimore has overturned Maryland’s “Wal-Mart” health care law, ruling in favor of the Retail Industry Leaders Association in a lawsuit.
Judge J. Frederick Motz of the U.S. District Court in Baltimore overturned the law, finding that it is pre-empted by the federal Employee Retirement Income Security Act and violates the equal protection clause of the U.S. Constitution.
The law, enacted by the state legislature over the veto of Governor Robert Ehrlich, required non-governmental employers with more than 10,000 employees to spend 8% of their payroll on employee health care, or pay a similar amount into a state managed fund.
In determining the ERISA pre-emption, Judge Motz writes that the law, which also was known as the “fair share” law, would have created a separate system for administering Wal-Mart’s employee benefit plans in Maryland than in other states.
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“The Fair Share Act creates health care spending requirements that are not applicable in most other jurisdictions,” Judge Motz writes. “Moreover, its requirements directly conflict with the requirements of at least two other jurisdictions,” including New York City and Suffolk County, N.Y., and he adds it also conflicts with similar pending “fair share” legislation in Oklahoma and Minnesota. Additionally, the judge writes the intent of the law was to affect Wal-Mart’s contribution to its benefit plan, which is also pre-empted by ERISA.
“My finding that the act is pre-empted is in accordance with long-established Supreme Court law that holds that state laws which impose employee health or welfare mandates on employers are invalid under ERISA,” Judge Motz writes in the ruling.