AURORA MED. GRP. v. DEPT. OF WORKFORCE DEVELOPMENT, 98-1546.
| Decision Date | 07 September 1999 |
| Docket Number | No. 98-1546.,98-1546. |
| Citation | 602 N.W.2d 111,230 Wis.2d 399 |
| Parties | AURORA MEDICAL GROUP, Petitioner-Appellant, v. DEPARTMENT OF WORKFORCE DEVELOPMENT, Equal Rights Division and Kristine E. Meyers, Respondents-Respondents. |
| Court | Wisconsin Court of Appeals |
On behalf of the petitioner-appellant, the cause was submitted on the briefs of Mary Pat Ninneman and Carmella A. Huser of Quarles & Brady, of Milwaukee.
On behalf of the respondent-respondent Department of Workforce Development, Equal Rights Division, the cause was submitted on the brief of Richard Briles Moriarty, assistant attorney general, with whom on the briefs was James E. Doyle, attorney general. On behalf of the respondent-respondent Kristine E. Meyers, the cause was submitted on the brief of Jeffrey P. Sweetland of Shneidman, Myers, Dowling, Blumenfield, Ehlke, Hawks & Domer, of Milwaukee.
Before Wedemeyer, P.J., Schudson and Curley, JJ.
¶ 1.
Aurora Medical Group appeals from the circuit court order affirming the Department of Workforce Development's decision regarding Kristine E. Meyers' complaint that her employer, Aurora, refused to honor her request to substitute paid sick time for unpaid statutory family leave. The Department concluded that even though Meyers was not eligible to take sick leave under the terms of Aurora's sick pay plan, Aurora discriminated against Meyers by "interfering with, restraining, or denying the exercise of a right provided under [the Wisconsin Family and Medical Leave Act]" when it refused to allow her to substitute 96.9 hours of paid sick time for unpaid statutory leave.
¶ 2. Aurora contends that Meyers' state law claim under the Wisconsin Family and Medical Leave Act (WFMLA) is preempted by the federal Employee Retirement Income Security Act (ERISA). In support of this contention, Aurora argues that the federal Family and Medical Leave Act (FFMLA) "did not nullify the scope of ERISA preemption" and that Congress did not intend to protect the substitution provision of WFMLA from ERISA preemption. We reject Aurora's theory and affirm.
¶ 3. Aurora's employee sick pay benefits are funded through a tax-exempt voluntary employees' beneficiary association, and paid through a sick pay plan that qualifies as an employee welfare benefit plan under ERISA. The terms of the sick pay plan authorize payment of sick time benefits to an employee only when the employee is ill.
¶ 4. Meyers, a registered nurse, began working for Aurora on July 20, 1995. In January 1997, she requested family leave from January 24 to March 10 for the adoption of a child. She asked that paid sick, holiday/personal, and vacation time be substituted for unpaid statutory leave. Aurora granted Meyers' request for family leave, but notified her that because she was not ill, she would not be allowed to substitute paid sick time for unpaid family leave. Thus, Aurora allowed Meyers to substitute 12.0 hours of paid holiday/personal time and 40.4 hours of paid vacation time for unpaid family leave. If Aurora had allowed Meyers to substitute paid sick time as she had requested, 96.9 hours of paid sick time, 12.0 hours of paid holiday/personal time, and 11.1 hours of paid vacation time would have been substituted for her unpaid family leave. Meyers then would have had 29.3 hours of unused accrued vacation time upon her return from leave.
¶ 5. Based on the parties' briefs and stipulation of facts, an administrative law judge (ALJ) concluded that Aurora discriminated against Meyers, in violation of § 103.10, STATS. The ALJ ordered that Aurora make Meyers whole by: (1) paying her $1,039.01, the amount she would have received as additional compensation during her leave if the sick pay substitution had been allowed; (2) crediting her vacation time accrual bank with 29.3 hours, the amount she would not have used if Aurora had permitted the sick pay substitution; (3) reducing her sick leave accrual by 96.9 hours, the amount of time she would have used if the sick pay substitution had been allowed; and (4) reimbursing her for interest on the damages at the rate of 12% annually, simple interest. The ALJ also ordered Aurora to pay Meyers $5,296.25 for attorney's fees and costs.
¶ 6. Aurora petitioned the circuit court for judicial review, claiming the Department had no jurisdiction over Meyers' claim because it was preempted by ERISA. Meyers requested that Aurora's petition be dismissed and that the Department's decision and order be affirmed. On April 17, 1998, the circuit court affirmed the Department's decision. Aurora appeals.
[1]
¶ 7. The preemptive effect of a federal law on WFMLA presents a question of law. See Miller Brewing Co. v. DILHR, Equal Rights Division, 210 Wis. 2d 26, 33, 563 N.W.2d 460, 463 (1997). Aurora argues that because the supreme court, in Miller, concluded that the Department had no special expertise in determining whether ERISA preempted WFMLA, we should review the Department's decision de novo. The Department responds:
Since judicial review in Miller commenced in 1990, only two years after the enactment of [WFMLA], the preceding agency record, unsurprisingly, displayed "no real evidence of any special agency expertise or experience" on the interplay between federal preemption and [WFMLA]. By 1997, when the decision issued [in the instant case], the Department had several occasions to examine that interplay and, monitoring ongoing developments, had become familiar with the nuances of that interplay.
(citations and record references omitted). Thus, the Department requests that its decision be granted due weight deference. Additionally, the Department contends that its determination should be affirmed regardless of the standard of review we apply. We need not resolve the parties' dispute over the standard of review because, even applying the de novo standard, we conclude that the Department's decision was correct.
¶ 8. As the parties acknowledge, ERISA Subchapter I (addressing protection of employee benefit rights) indicates that its provisions supersede state laws regarding sick pay plans such as the one at issue in this case. See 29 U.S.C. § 1144(a) (1998). The same subchapter, however, also states that "[n]othing in this subchapter shall be construed to alter, amend, modify, invalidate, impair, or supersede any law of the United States . . . or any rule or regulation issued under any such law." See 29 U.S.C. § 1144(d) (1998). ERISA, therefore, does not supersede FFMLA.
¶ 9. FFMLA states: "Nothing in this Act or any amendment made by this Act shall be construed to supersede any provision of any State or local law that provides greater family or medical leave rights than the rights established under this Act or any amendment made by this Act." 29 U.S.C. § 2651(b) (1998) (emphasis added). FFMLA also states that "[t]he rights established for employees under this Act or any amendment made by this Act shall not be diminished by any . . . employment benefit program or plan." 29 U.S.C. § 2652(b) (1998) (emphasis added). Therefore, to the extent to which ERISA is amended by FFMLA, ERISA must yield to any provisions of WFMLA providing greater family leave rights than those provided by FFMLA.
¶ 10. Under FFMLA, an employee is allowed to substitute accrued paid vacation, personal, or family leave for unpaid family leave for the adoption of a child. See 29 U.S.C. § 2612(d)(2)(A) (1998). Under WFMLA, "[a]n employe[e] may substitute, for portions of family leave or medical leave, paid or unpaid leave of any other type provided by the employer." Section 103.10(5)(b), STATS. (emphasis added). Because the substitution rights provided under WFMLA are greater than those provided under FFMLA, they are not preempted by FFMLA.
¶ 11. This conclusion, however, does not resolve the issue of whether ERISA preempts the substitution rights provided by WFMLA. As the supreme court noted in Miller:
The pre-emption doctrine is rooted in article VI of the United States Constitution, which is commonly referred to as the Supremacy Clause. The question of whether federal law pre-empts state law is one of congressional intent. Federal law preempts state law in three situations: (1) where Congress explicitly mandates pre-emption of state law; (2) where Congress implicitly indicates an intent to occupy an entire field of regulation to the exclusion of state law; or, (3) where state law actually conflicts with federal law. The [party seeking the benefit of preemption] bears the burden of establishing pre-emption.
Miller, 210 Wis. 2d at 34-35, 563 N.W.2d at 464 (citations omitted). Aurora has failed to meet its "burden of establishing pre-emption." See id. at 35, 563 N.W.2d at 464.
¶ 12. In interpreting the scope of the preemptive effect of ERISA, we are bound by the presumption that federal statutory law does not supersede the police powers of the State unless that is "`the clear and manifest purpose of Congress.'" See id. (quoted source omitted). Aurora notes that the Department of Labor (DOL) has the authority to issue regulations related to both ERISA and FFMLA and contends that the DOL "made no mention of ERISA pre-emption of state laws under § 2651(b)" in FFMLA regulations because it lacked authorization from Congress "to expand § 2651(b) beyond [FFMLA] itself." Aurora argues that "[t]he only conclusion that reasonably can be drawn from the absence of such language in either the text of [FFMLA] or the implementing regulations drafted by the DOL is that Congress did not intend to eliminate well-established principles of federal pre-emption, except as explicitly provided in the statute." Aurora also contends that it would be inappropriate to examine FFMLA's legislative history because there is no ambiguity in the statute's preemption language. We are not persuaded by Aurora's arguments.
¶ 13. As the United States Supreme Court declared well over a century ago:
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