Ninth Circuit Declines to Reconsider Ruling on SF Health Care Ordinance
Back in October 2008, the Ninth Circuit Court of Appeals upheld a San Francisco city ordinance that requires many employers to either contribute a specified amount toward their employees' health care costs on a regular basis or pay into a city health care fund for San Francisco residents. Earlier this week, the Ninth Circuit denied a petition for rehearing en banc, meaning that the law will continue to be in effect--until or unless the Supreme Court decides to hear an appeal.
The San Francisco Health Care Security Ordinance went into effect on January 9, 2008. It is a "pay or play" health care plan, as it requires employers either to "pay" for health care or "play" by the rules of the city health care fund. The ordinance applies to for-profit employers with at least 20 employees and non-profit employers with at least 50 employees. For more information on the ordinance, including compliance information, click here.
In the underlying lawsuit, Golden Gate Restaurant Association v. San Francisco, a group of employers brought a lawsuit seeking the federal court to declare that the San Francisco ordinance is preempted by the federal Employee Retirement Income Security Act of 1974 (ERISA). The Ninth Circuit disagreed, and the ordinance will continue to be in effect. This decision may pave the way for other state and local governments to pass similar "pay or play" health care laws, knowing that they will likely withstand a legal challenge.
Ninth Circuit Upholds San Francisco Health Care Ordinance
The Ninth Circuit Court of Appeals recently upheld a San Francisco city ordinance that requires many employers to either contribute a specified amount toward their employees' health care costs on a regular basis or pay into a city health care fund for San Francisco residents.
The San Francisco Health Care Security Ordinance went into effect on January 9, 2008. It is a "pay or play" health care plan, as it requires employers either to "pay" for health care or "play" by the rules of the city health care fund. The ordinance applies to for-profit employers with at least 20 employees and non-profit employers with at least 50 employees. For more information on the ordinance, including compliance information, click here.
In Golden Gate Restaurant Association v. San Francisco, a group of employers brought a lawsuit seeking the federal court to declare that the San Francisco ordinance is preempted by the federal Employee Retirement Income Security Act of 1974 (ERISA). The Ninth Circuit disagreed, and the ordinance will continue to be in effect. This decision may pave the way for other state and local governments to pass similar "pay or play" health care laws, knowing that they will likely withstand a legal challenge.
U.S. Supreme Court to Hear Six L&E Cases This Term
The U.S. Supreme Court opened its 2008-2009 term on October 6 with six labor and employment law cases on its docket. (For docket information and questions presented, click on the name of the case).
- Locke v. Karass: may a public employee union may charge nonmembers for representational costs for litigation expenses incurred by the international union on behalf of other bargaining units?
- Kennedy v. Plan Administrator for DuPont Savings & Investment Plan: is a qualified domestic relations order (QDRO) is the only valid way under ERISA for a divorcing spouse to waive his or her right to the other spouse's pension benefits?
- Crawford v. Metro. Gov't of Nashville & Davidson County: Is an employee who cooperates with an employer-initiated investigation into alleged unlawful discrimination protected by Title VII's anti-retaliation provisions?
- Ysursa v. Pocatello Education Ass'n: does an Idaho law that prohibits local government employers from allowing employee payroll deductions for political activities violate the First Amendment free speech rights of unions and their members?
- 14 Penn Plaza LLC v. Pyett: do employees covered by a collective bargaining agreement which providies that statutory employment discrimination claims must be pursued through the contractual grievance and arbitration procedures have a right for a court to decide their discrimination claims?
- AT&T Corp. v. Hulteen: must an employer give full service credit for purposes of calculating retirement benefits for pregnancy leaves taken before the Pregnancy Discrimination Act of 1978 if the plan gave full credit for other types of temporary disability leaves?
Some of these cases (such as the Penn Plaza and Crawford cases) have the potential to make significant changes in existing law. Stay tuned to the World of Work for developments as they occur!
Big Day at the Supreme Court: Four New L&E Decisions
Today the U.S. Supreme Court issued four labor and employment-related decisions; none, however, were big surprises or substantial changes in the law.First, in Meacham v. Knolls Atomic Power Laboratory, the Court held 8-0 that an employer defending an Age Discrimination in Employment Act case bears the burden of proving a "reasonable factors other than age" or "RFOA" affirmative defense. Truth be told, most defense lawyers have assumed that it was the employer's burden to prove the affirmative defense; this decision simply confirms that assumption. Second, in Chamber of Commerce v. Brown, the Court ruled 7-2 that federal labor law preempts California Gov't Code Section 16645.2, which prohibits private employers who are "recipient[s] of a grant of state funds" from "us[ing] the funds to assist, promote, or deter union organizing." Again, not a big surprise.
Next, in Kentucky Retirement Systems v. EEOC, the Court held 5-4 that a disability-retirement-benefits plan for public employees did not violate the Age Discrimination in Employment Act (ADEA). The plan disqualifies employees who are still working from receiving benefits if they reach normal retirement age when they become disabled, and calculates disability retirement benefits so that older employees who is eligible for disability benefits receive fewer benefits than younger employees. The Court held that any differential treatment was not based on age, but rather on pension status.
Finally, in Metropolitan Life Insurance v. Glenn, the Court held 7-2 that an ERISA plan administrator's dual role of both evaluating and paying benefits claims creates a conflict of interest, and courts reviewing claims denials can properly consider that conflict in deciding to set aside the administrator's discretionary decision.
