Delta Air Lines, Inc. v. Kramarsky
| Decision Date | 28 January 1980 |
| Docket Number | No. 77 Civ. 3358 (MEL).,77 Civ. 3358 (MEL). |
| Citation | 485 F. Supp. 300 |
| Parties | DELTA AIR LINES, INC., Allegheny Airlines, Inc., National Airlines, Inc., Piedmont Aviation, Inc., Braniff Airways, Inc., North Central Airlines, Inc., Southern Airways, Inc., Eastern Air Lines, Inc., Northwest Airlines, Inc., Trans World Airlines, Inc., Ozark Air Lines, Inc., American Airlines, Inc., Pan American World Airways, Inc., and United Air Lines, Inc., Plaintiffs, v. Werner J. KRAMARSKY, Individually and in his capacity as Commissioner of the New York State Division of Human Rights; Ann Thacher Anderson, Individually and in her capacity as General Counsel of the New York State Division of Human Rights; the New York State Division of Human Rights, an agency of the Executive Department of the State of New York; Arthur Cooperman, Individually and in his capacity as Chairman of the New York State Workmen's Compensation Board; and the New York State Workmen's Compensation Board, Defendants. |
| Court | U.S. District Court — Southern District of New York |
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Seward & Kissel, New York City and Atlanta, Ga., for plaintiffs; Dean Booth, J. Stanley Hawkins, Atlanta, Ga., of counsel.
Robert Abrams, Atty. Gen. of the State of New York, State Division of Human Rights, New York City, for defendants; Judith T. Kramer, Arnold D. Fleischer, Asst. Attys. Gen., New York City, Ann Thacher Anderson, New York City, of counsel.
Fourteen airlines operating in New York State seek declaratory and injunctive relief from the application of two New York statutes which would require them to provide complete coverage in their employee benefit plans for disabilities related to pregnancy.
The statutes in question are the Human Rights Law (HRL), N.Y.Exec.Law §§ 290-301 (McKinney 1976), and the Disability Benefits Law (DBL), N.Y.Work.Comp.Law §§ 200-242 (art. 9) (McKinney Supp.1972-1978). In December of 1976, the New York Court of Appeals held in Brooklyn Union Gas Co. v. New York State Human Rights Appeal Board, 41 N.Y.2d 84, 390 N.Y.S.2d 884, 359 N.E.2d 393 (1976), that the prohibition against sex discrimination contained in § 296.1(a) of the HRL bars private employers from treating pregnancy and childbirth differently from any other physical disability. On August 3, 1977, the New York Disability Benefits Law was amended to expand the definition of disability to include disabilities related to pregnancy. See N.Y.Work.Comp.Law §§ 201(9)(B) and 205(3). The statutes therefore require inclusion of pregnancy benefits in any employee benefit plan of general coverage maintained for employees in New York.
The airlines contend that the two statutes are preempted from regulating the employee plans in question by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001-1381 (1976 & Supp. I, 1977), and by the Railway Labor Act (RLA), 45 U.S.C. §§ 151-188 (1976). They also argue that the effect of including complete pregnancy coverage in their plans would be to increase the compensation of their female employees beyond that paid to their male employees in violation of the "equal pay for equal work" doctrine of Title VII of the 1964 Civil Rights Act, 42 U.S.C. §§ 2000e to 2000e-17 (1976), the Equal Pay Act, 29 U.S.C. § 206(d) (1976), and Executive Order No. 11246, 3 C.F.R. 339 (1964-1965 Comp.) (Sept. 24, 1965), Executive Order No. 11375, 3 C.F.R. 684 (1966-1970 Comp.) (Oct. 13, 1967).
The State moves under Rule 12(b)(6), Fed.R.Civ.P., to dismiss for failure to state a claim upon which relief can be granted.
The stakes involved in this case were considerably narrowed when, in October of 1978, § 701 of Title VII was amended to provide that:
"women affected by pregnancy, childbirth, or related medical conditions shall be treated the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons not so affected but similar in their ability or inability to work . . .."
Pub.L. No. 95-555, § 1, 92 Stat. 2076 (codified at 42 U.S.C. § 2000e(k)) (the "Pregnancy Disability Act"). The effect of the amendment is to require employers, such as those suing here, to include pregnancy disabilities in their employee benefit plans. Thus the airlines' claims for relief are rendered moot from the effective date of the statute. Accordingly, what remains for decision is the question whether the New York statutes may validly be applied to the airlines' plans from the date upon which state law was first interpreted in Brooklyn Union Gas to require such plans to provide benefits for pregnancy related disabilities (December 20, 1976) until the effective date of the new federal law (April 29, 1979).
The State contends that the airlines lack standing to assert that the rights of their male employees are violated by the two state statutes. It relies on Gilbert v. General Electric Co., 59 F.R.D. 267 (E.D.Va. 1973), which, according to the State, stands for the proposition that an employer who has approved an allegedly discriminatory bargaining agreement cannot seek to represent employees who are aggrieved by the discrimination.
Even assuming that the State has properly interpreted Gilbert, that case appears to have no bearing on the issue here. The airlines are not attacking the terms of the collective bargaining agreement in any way; rather, they are defending them from allegedly unconstitutional interference by the State.
A number of recent decisions dealing with the right of an employer to sue on behalf of his employees appear to establish clearly the standing of the airlines here. The two state statutes impose significant obligations on the airlines themselves. Compliance with the statutes will subject them to substantial economic burdens; failure to comply could lead to sanctions from the State. Accordingly, the airlines face a sufficient risk of "injury in fact" to permit them to contest the state law. Carey v. Population Services International, 431 U.S. 678, 682-84, 97 S.Ct. 2010, 2014-15, 52 L.Ed.2d 675 (1977); Craig v. Boren, 429 U.S. 190, 192-97, 97 S.Ct. 451, 454-56, 50 L.Ed.2d 397 (1976). Moreover, the resources which the airlines command — as well as their stake in the result — assure that they will be effective advocates on behalf of their male employees. See Singleton v. Wulff, 428 U.S. 106, 112-17, 96 S.Ct. 2868, 2873-75, 49 L.Ed.2d 826 (1976).
The statutory language, legislative history and controlling case law all indicate that the HRL is preempted by ERISA.
Section 514(a) of ERISA provides that the federal statute "shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan described in section 1003(a) of this title." 29 U.S.C. § 1144(a) (emphasis added). Section 514(c)(2) defines "State" to include "a State, any political subdivisions thereof, or any agency or instrumentality of either, which purports to regulate, directly or indirectly, the terms and conditions of employee benefit plans covered by this subchapter." 29 U.S.C. § 1144(c)(2) (emphasis added). The only state statutes excluded from the operation of the preemption clause are those regulating insurance, banking, or securities, or generally applicable state criminal law. See 29 U.S.C. § 1144(b).
The legislative history of ERISA strengthens the conclusion that the scope of the preemption clause is fully as broad as its language suggests. Both the House and Senate Conference Committees rejected earlier versions of the clause which would have limited preemption to areas of specific conflict between state and federal law. Thus, the House version originally would have superseded state laws only "insofar as they may now or hereafter relate to the reporting and disclosure responsibilities, and fiduciary responsibilities, of persons acting on behalf of any employee benefit plan . . .," 120 Cong.Rec. 4742 (1974), while the Senate version would have superseded state laws only "insofar as they may now or hereafter relate to the subject matters regulated by this Act . . .," 120 Cong.Rec. 5002 (1974). Instead of adopting one of these narrow provisions, Congress opted for broad preemption language. According to Senator Javits, the ranking minority member of the Senate Committee on Labor and Public Welfare, this action was taken to avoid the possibility of:
"endless litigation over the validity of State action that might impinge on Federal regulation, as well as opening the door to multiple and potentially conflicting State laws hastily contrived to deal with some particular aspect of private welfare or pension benefit plans not clearly connected to the Federal regulatory scheme."
The sponsors of the bill in both the House and the Senate also described the scope of the clause in sweeping terms. Senator Harrison Williams, the Senate sponsor, stated during his presentation of the bill that, with the narrow exceptions specified in the bill, the preemption principle "is intended to apply in its broadest sense to all actions of State or local governments, or any instrumentality thereof, which have the force or effect of law." 120 Cong.Rec. 29933 (1974). Similarly, Congressman John Dent, the House sponsor, stated that the "crowning achievement" of ERISA was its reservation to the federal government of the sole power to regulate the field of employee benefit plans:
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