A Collaboration with the University of Pittsburgh

Federal judge strikes down Maryland Wal-Mart health care law

[JURIST] A federal district court judge in Maryland on Wednesday struck down Maryland's Fair Share Health Care Fund Act [PDF text], aimed at forcing Wal-Mart to adequately support the health care needs of its employees. The law would have required companies with more than 10,000 employees to spend at least eight percent on employee health care, or pay the difference of that amount into the state Medicaid fund. The Retail Industry Leaders Association (RILA) [trade website], of which Wal-Mart is a member, filed a challenge to the health care law [JURIST report] in January, arguing that the law is preempted by the federal Employee Retirement Income Security Act (ERISA) [text], and that the law violates the equal protection clause of the constitution.

In his opinion [PDF text] granting summary judgment to the plaintiffs, Judge Frederick Motz wrote:

the Act imposes legally cognizable injury upon Wal-Mart by requiring it to make a report to the [Maryland] Secretary [of Labor] about the amount of its payroll and health care contributions and by requiring it to track and allocate benefits for its Maryland employees in a manner different from that in which it tracks and allocates benefits for its employees in other states.
Motz agreed that the Maryland law is preempted by ERISA, but held that the Act would survive rational basis review under equal protection analysis. Maryland is the first state to attempt to force Wal-Mart to pay for the health care of their employees, though other states have considered doing so. Critics of Wal-Mart cite a now-infamous Wal-Mart memo [PDF text] as evidence that the nation's largest private employer has intentionally evaded their responsibilities to their employees by attempting to shift health care responsibilities to state and federal governments. AP has more.

About Paper Chase

Paper Chase is JURIST's real-time legal news service, powered by a team of 30 law student reporters and editors led by law professor Bernard Hibbitts at the University of Pittsburgh School of Law. As an educational service, Paper Chase is dedicated to presenting important legal news and materials rapidly, objectively and intelligibly in an accessible format.

© Copyright JURIST Legal News and Research Services, Inc., 2013.