Fort Halifax Packing Company, Inc v. Coyne

• Citation: 96 L.Ed.2d 1,482 U.S. 1,107 S.Ct. 2211
• Decision Date: 01 June 1987
• Docket Number: No. 86-341,86-341
• Parties: FORT HALIFAX PACKING COMPANY, INC., Appellant v. P. Daniel COYNE, Director, Bureau of Labor Standards of Maine, et al
• Court: United States Supreme Court

482 U.S. 1

107 S.Ct. 2211

96 L.Ed.2d 1

FORT HALIFAX PACKING COMPANY, INC., Appellant

v P. Daniel COYNE, Director, Bureau of Labor Standards of Maine, et al.

No. 86-341.

Argued March 24, 1987.

Decided June 1, 1987.

Syllabus

After appellant closed its poultry packaging and processing plant and laid off most of the employees who worked there, the Director of Maine's Bureau of Labor Standards filed suit to enforce the provisions of a state statute requiring employers, in the event of a plant closing, to provide a one-time severance payment to employees not covered by an express contract providing for severance pay. The State Superior Court granted the Director summary judgment, holding appellant liable under the statute, and the State Supreme Court affirmed, rejecting appellant's contentions that the state statute was pre-empted by the Employee Retirement Income Security Act of 1974 (ERISA) and by the National Labor Relations Act (NLRA).

Held:

1. The Maine severance pay statute is not pre-empted by ERISA, since it does not "relate to any employee benefit plan" under that statute's pre-emption provision, 29 U.S.C. § 1144(a). Appellant's contention that any state law pertaining to a type of employee benefit listed in ERISA, such as severance pay, necessarily regulates an employee benefit plan, and is therefore pre-empted, fails in light of the plain meaning and underlying purpose of § 1144(a) and the overall objectives of ERISA itself. Pp. 7-19.

(a) Section 1144(a) does not refer to state laws relating simply to "employee benefits," but expressly states that state laws are superseded insofar as they "relate to any employee benefit plan " (emphasis added). In fact, ERISA uses the words "benefit" and "plan" separately throughout the statute, and nowhere treats them as equivalent. Given the basic difference between the two concepts, Congress' choice of language is significant in its pre-emption of only the latter, which cannot be read out of ERISA. In order to be pre-empted, a state statute must have some connection with, or reference to, a plan. Pp. 7-8.

(b) Pre-emption of the Maine statute would not further the purpose of ERISA pre-emption, which is to allow plans to adopt a uniform scheme for coordinating complex administrative activities, unaffected by conflicting regulatory requirements in differing States. The Maine statute neither establishes, nor requires an employer to maintain, a plan that would embody a set of administrative practices vulnerable to the burden imposed by a patchwork, multistate regulatory scheme. In fact, the theoretical possibility of a one-time, lump-sum severance payment triggered by a single event requires no administrative scheme whatsoever to meet the employer's statutory obligation. Pp. 8-15.

(c) Similarly, the Maine statute does not implicate the regulatory concerns of ERISA itself, which was enacted to ensure administrative integrity in the operation of plans by preventing potential fiduciary abuse. The Maine statute neither establishes a plan nor generates any administrative activity capable of being abused. Pp. 15-16.

(d) Appellant's contention that failure to pre-empt the Maine statute will allow employers to circumvent ERISA, by persuading States to require types of plans the employers would otherwise have established on their own, has no force with respect to a state statute that, as here, does not establish a plan, generates no ERISA-covered program activity, presents no risk that otherwise applicable federal requirements will be evaded by an employer or dislodged by a State, and creates no prospect that an employer will face difficulty in operating a unified administrative benefit payment scheme. Holland v. Burlington Industries, Inc., 772 F.2d 1140 (CA4 1985), summarily aff'd, 477 U.S. 901, 106 S.Ct. 3267, 91 L.Ed.2d 559 (1986), and Gilbert v. Burlington Industries, Inc., 765 F.2d 320 (CA2 1985), summarily aff'd, 477 U.S. 901, 106 S.Ct. 3267, 91 L.Ed.2d 558 (1986), distinguished. Pp. 16-19.

(e) Where, as here, a state statute creates no danger of conflict with a federal statute, there is no reason to disable it from attempting to address uniquely local social and economic problems. P. 19.

2. The Maine severance pay statute is not pre-empted by the NLRA. Appellant's argument that the statute's establishment of a minimum labor standard impermissibly intrudes upon the collective-bargaining process was rejected in Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724, 105 S.Ct. 2380, 85 L.Ed.2d 728, and is without merit here. Although the statute does give employees something for which they might otherwise have had to bargain, that is true of any state law that substantively regulates employment conditions. Moreover, appellant's argument that this case is distinguishable from Metropolitan Life because the statutory obligation at issue here is optional, in that it applies only in the absence of an agreement between employer and employees, is not persuasive, since, in fact, the parties' freedom to devise their own severance pay arrangements strengthens the case that the statute works no intrusion on collective bargaining. Thus, the statute is a valid and unexceptional exercise of the State's police power, and is compatible with the NLRA. Pp. 19-22.

510 A.2d 1054 (Me.1986), affirmed.

BRENNAN, J., delivered the opinion of the Court, in which MARSHALL, BLACKMUN, POWELL, and STEVENS, JJ., joined. WHITE, J., filed a dissenting opinion, in which REHNQUIST, C.J., and O'CONNOR and SCALIA, JJ., joined, post, p. 23.

John C. Yavis, Jr., Hartford, Conn., for appellant.

Thomas D. Warren, Brunswick, Me., for appellees.

Justice BRENNAN delivered the opinion of the Court.

In this case we must decide whether a Maine statute requiring employers to provide a one-time severance payment to employees in the event of a plant closing, Me.Rev.Stat Ann., Tit. 26, § 625-B (Supp.1986-1987),¹ is pre-empted by either the Employee Retirement Income Security Act of 1974, 88 Stat. 832, as amended, 29 U.S.C. §§ 1001-1381 (ERISA), or the National Labor Relations Act, 49 Stat. 452, as amended, 29 U.S.C. §§ 157-158 (NLRA). The statute was upheld by the Maine Superior Court, Civ. Action No. CV81-516 (Oct. 29, 1982), and by the Maine Supreme Judicial Court, 510 A.2d 1054 (1986). We noted probable jurisdiction, 479 U.S. 947, 107 S.Ct. 430, 93 L.Ed.2d 380 (1986), and now affirm.

I

In 1972, Fort Halifax Packing Company (Fort Halifax or Company) purchased a poultry packaging and processing plant that had operated in Winslow, Maine, for almost two decades. The Company continued to operate the plant for almost another decade, until, on May 23, 1981, it discontinued operations at the plant and laid off all its employees except several maintenance and clerical workers. At the time of closing, over 100 employees were on the payroll. Forty-five had worked in the plant for over 10 years, 19 for over 20 years, and 2 for 29 years. Plaintiff's Supplementary Response to Employee List, Exhibit A (June 3, 1983). Following the closing, the Company met with state officials and with representatives of Local 385 of the Amalgamated Meat Cutters & Butcher Workmen of North America, which represented many of the employees who had worked in the plant. While Fort Halifax initially suggested that reopening the plant might be feasible if the union agreed to certain concessions in the form of amendments to the collective-bargaining agreement, ultimately the Company decided against resuming operations and to close the plant.

On October 30, 1981, 11 employees filed suit in Superior Court seeking severance pay pursuant to Me.Rev.Stat.Ann., Tit. 26, § 625-B (Supp.1986-1987). This statute, which is set forth in n. 1, supra, provides that any employer that terminates operations at a plant with 100 or more employees, or relocates those operations more than 100 miles away, must provide one week's pay for each year of employment to all employees who have worked in the plant at least three years. The employer has no such liability if the employee accepts employment at the new location, or if the employee is covered by a contract that deals with the issue of severance pay. § 625-B(2), (3). Under authority granted by the statute, the Maine Director of the Bureau of Labor Standards also commenced an action to enforce the provisions of the state law, which action superseded the suit filed by the employees.²

The Superior Court, ruling on cross-motions for summary judgment, granted the Director's motion, holding that Fort Halifax is liable for severance pay under the statute. Civ. Action No. CV81-516 (Oct. 29, 1982). The Maine Supreme Judicial Court affirmed. 510 A.2d 1054 (1986). The court rejected the Company's contention that the plant-closing statute was pre-empted by ERISA, holding that ERISA pre-empted only benefit plans created by employers or employee organizations. Id., at 1059. It observed that the severance pay liability in this case results from the operation of the state statute, rather than from the operation of an employer-created benefit plan. Ibid. Therefore, reasoned the court, "[i]nasmuch as § 625-B does not implicate a plan created by an employer or employee organization, it cannot be said to be pre-empted by ERISA." Ibid. The court also rejected the argument that the state provision was pre-empted by the NLRA because it regulated conduct covered by either § 7 or § 8 of that statute. It found that the Maine statute applies equally to union and nonunion employees, and reflects "the state's substantial interest in protecting Maine citizens from the economic dislocation that accompanies large-scale plant closings." Id., at 1062. As a result, the court found that eligible employees were entitled to severance pay due to the closure of the plant at Winslow.³

We hold that the Maine statute is not pre-empted by ERISA, not for the reason offered by the Maine Supreme Judicial Court, but because the statute neither...