Aurora Medical Group v. DWD

• Court: United States State Supreme Court of Wisconsin
• Citation: 2000 WI 70,612 N.W.2d 646,236 Wis.2d 1
• Docket Number: No. 98-1546.,98-1546.
• Parties: AURORA MEDICAL GROUP, Petitioner-Appellant-Petitioner, v. DEPARTMENT OF WORKFORCE DEVELOPMENT, Equal Rights Division and Kristine E. Meyers, Respondents-Respondents.
• Decision Date: 27 June 2000

236 Wis.2d 1
2000 WI 70
612 N.W.2d 646

AURORA MEDICAL GROUP, Petitioner-Appellant-Petitioner,
v.
DEPARTMENT OF WORKFORCE DEVELOPMENT, Equal Rights Division and Kristine E. Meyers, Respondents-Respondents

No. 98-1546.

Supreme Court of Wisconsin.

Oral argument May 3, 2000.

Decided June 27, 2000.

236 Wis.2d 3

For the petitioner-appellant-petitioner there were briefs by Mary Pat Ninneman, Carmella A. Huser and Quarles & Brady, LLP, Milwaukee, and oral argument by Carmella A. Huser.

For the respondent-respondent, Department of Workforce Development, Equal Rights Division, the cause was argued by Richard Briles Moriarty, assistant attorney general, with whom on the brief was James E. Doyle, attorney general.

For the respondent-respondent, Kristine E. Meyers, there was a brief by Jeffrey P. Sweetland and Shneidman, Myers, Dowling, Blumenfield, Ehlke, Hawks & Domer, Milwaukee, and oral argument by Jeffrey P. Sweetland.

An amicus curiae brief was filed by Scott C. Beightol, Amy Schmidt Jones and Michael Best & Friedrich LLP, Milwaukee, on behalf of Wisconsin Manufacturers and Commerce.

An amicus curiae brief was filed by Marianne Goldstein Robbins and Previant, Goldberg, Uelmen, Gratz, Miller & Brueggeman, S.C., Milwaukee, on behalf of the Wisconsin State AFL-CIO.

An amicus curiae brief was filed by Henry L. Solano, Nathaniel I. Spiller, Jeffrey S. Goldberg and Ellen L. Beard, Washington, D.C., on behalf of the U.S.

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Department of Labor, and oral argument by Ellen L. Beard.

An amicus curiae brief was filed by Louise G. Trubek, Madison, and Judith L. Lichtman, Washington, D.C., on behalf of the National Partnership for Women and Families; Center for Public Representation, Inc.; 9to5, National Association of Working Women; Milwaukee 9to5; and 9to5 Poverty Network Initiative.

¶ 1. N. PATRICK CROOKS, J.

Aurora Medical Group (Aurora) seeks review of a published decision of the court of appeals¹ that affirmed a judgment of the Circuit Court for Milwaukee County, Victor Manian, Judge. The court of appeals held that § 514(a) of the federal Employment Retirement Income Security Act (ERISA)² does not pre-empt Kristine E. Meyers' (Meyers) claim under the Wisconsin Family and Medical Leave Act (Wisconsin FMLA).³ We agree that Meyers'

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state law claim is not pre-empted by federal law, and therefore affirm the decision of the court of appeals

I.

¶ 2. The relevant facts are not in dispute.⁴ Aurora has employed Meyers as a part-time registered nurse since July 20, 1995. During the relevant time period, Aurora employed 50 or more employees and Meyers worked more than 1000 hours.⁵ On January 30, 1997, Meyers requested family leave to adopt a child, covering January 24 to March 10, 1997. Meyers also requested to substitute paid sick time, as well as vacation and holiday/personal time, for the unpaid family leave.

¶ 3. On February 4, 1997, Aurora granted Meyers' leave request. However, Aurora informed Meyers that she could not substitute her paid sick time for the unpaid family leave because she was not ill. Aurora pays sick time from a separate fund, a Sick Pay Plan, and, according to the terms of Aurora's plan, sick time is not paid unless the employee is ill. Aurora's plan is a welfare benefit plan under ERISA.⁶

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¶ 4. Meyers substituted paid vacation and holiday/personal time for her unpaid leave. Had Aurora allowed her to substitute paid sick leave, Meyers would have had 29.3 hours of unused vacation time when she returned to work on March 10, 1997

¶ 5. On February 20, 1997, Meyers filed a complaint with the Department of Workforce Development (DWD), Equal Rights Division (ERD). Meyers' complaint alleged that Aurora violated her rights under the Wisconsin FMLA, Wis. Stat. § 103.10(5)(b). To prove a violation of § 103.10(5)(b), Meyers had to establish that (1) at the time she requested leave, she was covered by the Wisconsin FMLA; (2) she asked to substitute other leave for family leave; (3) Aurora provided leave that could be substituted;⁷ (4) she had accrued the leave to be substituted; and (5) Aurora denied the substitution request. Miller Brewing Co. v. DILHR, 210 Wis. 2d 26, 31, 563 N.W.2d 460 (1997) (citing Leher v. Consolidated Papers, Inc., 786 F. Supp. 1480, 1485 (W.D. Wis. 1992)).

¶ 6. After the ERD concluded that there was probable cause to believe that Aurora violated the Wisconsin FMLA, Meyers and Aurora stipulated, in effect, to facts establishing the above five elements. In lieu of a hearing and based upon the stipulation of facts, the

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administrative law judge (ALJ) concluded that ERISA did not pre-empt Wisconsin FMLA's substitution right, as Aurora contended, and that Aurora had thus interfered with, restrained, or denied Meyers' right of substitution under the Wisconsin FMLA. The ALJ relied upon the language of § 401(b) of the federal Family and Medical Leave Act (federal FMLA) that "[n]othing 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). According to the ALJ, § 514(d) of ERISA⁸ dictates that ERISA is subordinate to § 401(b) of the federal FMLA. Consequently, because § 401(b) of the federal FMLA allows the Wisconsin FMLA's substitution provision to apply to sick pay plans covered by ERISA, ERISA did not pre-empt the Wisconsin FMLA's leave substitution. The ALJ also found that the federal FMLA was sufficiently ambiguous to warrant reviewing the legislative history that supported the determination of no pre-emption

¶ 7. The ALJ ordered Aurora to credit Meyers 29.3 hours in the vacation time she used instead of her paid sick time and to reduce Meyers' sick leave by the time she would have used to substitute for the unpaid family leave. The ALJ also ordered Aurora to pay Meyers the amount she would have received in compensation had she been permitted to substitute her paid sick leave, plus interest, and attorney's fees and costs.

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¶ 8. Aurora petitioned the circuit court for judicial review of the ALJ's decision pursuant to Wis. Stat. § 227.53. The circuit court, on de novo review, relied upon the language of the federal FMLA and ERISA, as well as the federal FMLA's legislative history to affirm the ALJ's decision.

¶ 9. Aurora then appealed to the court of appeals, which affirmed the decision below, holding that Aurora "failed to meet its `burden of establishing pre-emption.'" Aurora Medical Group v. Department of Workforce Dev., 230 Wis. 2d 399, 405, 602 N.W.2d 111 (quoting Miller Brewing Co., 210 Wis. 2d at 35). The court of appeals relied upon the federal FMLA's legislative history as an indication that the federal FMLA was intended to insulate provisions of state medical and family leave statutes. Aurora, 230 Wis. 2d at 406-410.

¶ 10. We granted Aurora's petition for review of the court of appeals decision.

II.

[1, 2]

¶ 11. Whether § 514(a) of ERISA pre-empts the Wisconsin FMLA is a question of law. Miller Brewing Co., 210 Wis. 2d at 33 (citing International Ass'n of Machinists & Aerospace Workers, IAM Local 437 v. U.S. Can, 150 Wis. 2d 479, 487, 441 N.W.2d 710 (1989), cert. denied, 493 U.S. 1019 (1990)). The Court is not bound by an administrative agency's interpretation of the law, but may defer to it if the agency has experience, technical expertise and specialized knowledge that would aid in the interpretation. Jicha v. DILHR, 169 Wis. 2d 284, 290-91, 485 N.W.2d 256 (1992). However, if there is no evidence that the agency brings to the interpretation any special expertise or experience, and the question of law is one of first impression, the

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court will review the agency's interpretation of the law de novo. Coutts v. Wisconsin Retirement Bd., 209 Wis. 2d 655, 664, 562 N.W.2d 917 (1997).

[3]

¶ 12. This is a case of first impression, apparent from the fact that the ALJ did not rely on published precedent or promulgated rules.⁹ Kelley Co., Inc. v. Marquardt, 172 Wis. 2d 234, 245-46, 493 N.W.2d 68 (1992). In addition, there is no evidence here that the DWD brings any special expertise in determining the scope of federal pre-emption. Miller Brewing Co., 210 Wis. 2d at 34. Accordingly, while we benefit from the DWD's decision and the de novo reviews thereof by the circuit court and court of appeals, we, too, review the DWD's decision de novo. Id. at 33-34; Aurora Medical Group, 230 Wis. 2d at 403.

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III.

A. GENERAL PRINCIPLES OF FEDERAL PRE-EMPTION

¶ 13. According to the Supremacy Clause of the U.S. Constitution, federal law "shall be the supreme law of the land." U.S. Const. art. VI, cl. 2. Federal law may pre-empt state law in one of three ways: (1) expressly, (2) by implication, or (3) by a direct conflict between federal and state law. Miller Brewing Co., 210 Wis. 2d at 34; see also New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 654 (1995). Despite the Supremacy Clause and the varied types of pre-emption, the starting point for determining whether a state law is preempted is a presumption against pre-emption. Miller Brewing Co., 210 Wis. 2d at 35. "[W]e have never assumed lightly that Congress has derogated state regulation, but instead have addressed claims of preemption with the starting presumption that Congress does not intend to supplant state law." Travelers, 514 U.S. at 654.

¶ 14. Where federal law would bar a state action in an area which the state traditionally regulates— within "the historic police powers"—the presumption against pre-emption must be overcome by showing that it is "the clear and manifest purpose of Congress" that federal law supersedes state law. California Div. of Labor Standards Enforcement v. Dillingham Constr. N.A., Inc., 519 U.S. 316, 325 (1997) (quoting Travelers, 514 U.S. at 655); Gorton...