Lukus v. Westinghouse Elec. Corp.

Decision Date04 January 1980
Citation276 Pa.Super. 232,419 A.2d 431
Parties, 30 Fair Empl.Prac.Cas. (BNA) 317, 23 Empl. Prac. Dec. P 31,174 Lois E. LUKUS, on behalf of herself and all others similarly situated, v. WESTINGHOUSE ELECTRIC CORPORATION, a corporation; International Union of Electrical, Radio and Machine Workers,, an unincorporated association; and International Union of Electrical, Radio and Machine Workers,, Local 601, an unincorporated association. Appeal of WESTINGHOUSE ELECTRIC CORPORATION.
CourtPennsylvania Superior Court

Martha Hartle Munsch, Pittsburgh, for Westinghouse, appellant.

Michael D. Buchwach, Pittsburgh, for Lukus, appellee.

Michael B. Trister, Washington, D. C., for union, appellees.

Before CERCONE, President Judge, and VAN der VOORT, SPAETH, WIEAND and HOFFMAN, JJ.

SPAETH, Judge:

This is an appeal from an order dismissing preliminary objections by Westinghouse Electric Corporation to a complaint filed by Lois E. Lukus as a class action 1 against Westinghouse, alleging the violation of rights of female Westinghouse employees under the Pennsylvania Human Relations Act, Act of Oct. 27, 1955, P.L. 744, as amended, 43 P.S. § 951 et seq. (hereinafter the PHRA). 2

In her complaint Lukus alleges that while she was employed by Westinghouse, from September 1972 to June 30, 1976, Westinghouse provided its employees "with weekly sickness and accident payments, for a maximum period of twenty-six (26) weeks, for all absences from work due to all disabling non-occupational sicknesses and accidents, except absences from work by female employees disabled by pregnancy or childbirth or complications therefrom." Record at 4a. Lukus further alleges in her complaint that she "was absent from work from approximately October 1975 to March 26, 1976 because of disability due to pregnancy, complications of pregnancy and childbirth," id., and that because of Westinghouse's policy, she did not receive sickness and accident benefits for this period of disability. The theory of the complaint is that Westinghouse's refusal to pay Lukus benefits during her absence due to pregnancy and childbirth constituted sex discrimination prohibited by the PHRA. The complaint prays that Westinghouse be enjoined from "pursuing, using, implementing, adhering to, or agreeing to" any employee sickness or accident plan that excepts from its otherwise all-inclusive coverage pregnancy-related disabilities. The complaint also prays that Westinghouse's plan be declared unlawful, and that monetary damages be awarded.

On September 1, 1977, Westinghouse filed preliminary objections to the complaint, including objections that

1. the federal Employee Retirement Income Security Act, Act of Sept. 2, 1974, P.L. 93-406, 88 Stat. 832, 29 U.S.C. §§ 1001, et seq. (hereinafter ERISA), has preempted PHRA's regulation of Westinghouse's employee disability plan;

2. PHRA, by its own terms, does not apply to Westinghouse's plan;

3. Lukus has failed to exhaust her administrative remedies under PHRA; and

4. Lukus is barred by § 962(b) of PHRA from maintaining her action because she previously filed a complaint in federal court based upon the same grievance. 3

In response, Lukus filed preliminary objections to Westinghouse's preliminary objections, and ultimately an answer to Westinghouse's factual averments. Record at 74a. On April 20, 1978, the lower court dismissed both Westinghouse's and Lukus's preliminary objections. On May 8, 1978, pursuant to 42 Pa.C.S.A. § 702(b) (1979 Pamphlet) and Pa.R.A.P. 1311, the lower court amended its April 20 order to certify that it believed that its dismissal of Westinghouse's preliminary objections involved "controlling questions of law as to which there is substantial ground for difference of opinion and that an immediate appeal therefrom may materially advance the ultimate termination of this litigation." Record at 2a. On June 5, 1978, Westinghouse petitioned this court for permission to appeal from the lower court's order, stating that if permission were granted, the appeal would challenge only the lower court's dismissal of the four objections listed above. On July 26, 1978, we granted the petition. 4 On October 26, 1978, argument was heard on the appeal by a three-judge panel of this court, but because of the considerable importance of the issues, argument was rescheduled and heard before the court en banc on April 12, 1979. For the reasons below, we now affirm in part and vacate in part the lower court's order, and remand for further proceedings in accordance with this opinion.


Westinghouse's first preliminary objection is that "ERISA . . . has preempted PHRA's regulation of Westinghouse's employee disability plan." The premises of this objection may be stated as follows: Congress enacted ERISA to afford comprehensive federal protection of the interests of participants in employee benefit plans. 5 There is no dispute that Westinghouse's employee disability plan is an "employee welfare benefit plan" within 29 U.S.C. § 1002(1), 6 and is subject to the provisions of ERISA. 7 State regulation of the plan, by the PHRA, is therefore controlled by the preemption, or supersedure, provision in 29 U.S.C. § 1144, which provides:

(a) Except as provided in subsection (b) of this section, the provisions of this subchapter and subchapter III of this chapter shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan . . . .

(c) For purposes of this section:

(1) The term "State law" includes all laws, decisions, rules, regulations, or other State action having the effect of law, of any State. . . .

(2) The term "State" includes 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. 8

This preemption must be given effect, for it constitutes an exercise by Congress of its powers under article VI, clause 2, of the United States Constitution (the supremacy clause). 9

The general principles that we must apply in appraising Westinghouse's preliminary objection are settled. "(W)hen Congress has 'unmistakably . . . ordained,' . . . that its enactments alone are to regulate a part of commerce, state laws regulating that aspect of commerce must fall. This result is compelled whether Congress' command is explicitly stated in the statute's language or implicitly contained in its structure and purpose." Jones v. Rath Packing Co., 430 U.S. 519, 525, 97 S.Ct. 1305, 1309, 51 L.Ed.2d 604 (1977). Accord: Malone v. White Motor Corp., 435 U.S. 497, 98 S.Ct. 1185, 55 L.Ed.2d 443 (1978) (plurality opinion). However, in deciding whether Congress has "unmistakably . . . ordained" that its enactment supersedes a state's law, a court is to proceed with caution; it must "start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress." Ray v. Atlantic Richfield Co., 435 U.S. 151, 157, 98 S.Ct. 988, 994, 55 L.Ed.2d 179 (1978), quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230, 67 S.Ct. 1146, 1152, 91 L.Ed. 1447 (1947). "This assumption provides assurance that 'the federal-state balance,' . . . will not be disturbed unintentionally by Congress or unnecessarily by the courts." Jones v. Rath Packing Co., supra, 430 U.S. at 525, 97 S.Ct. at 1309. 10 "Unless the requisite pre-emptive intent is abundantly clear, we should hesitate to invalidate state and local legislation for the added reason that 'the state is powerless to remove the ill effects of our decision, while the national government, which has the ultimate power, remains free to remove the (state) burden." City of Burbank v. Lockheed Air Terminal, Inc., 411 U.S. 624, 643, 93 S.Ct. 1854, 1864, 36 L.Ed.2d 547 (1973) (REHNQUIST, J., joined by STEWART, WHITE and MARSHALL, JJ., dissenting) (citation omitted). Moreover, we are to bear in mind that "each case turns on the peculiarities and special features of the federal regulatory scheme in question." City of Burbank v. Lockheed Air Terminals, Inc., supra at 638, 93 S.Ct. at 1862.

Without doubt, the preemptive effect of section 1144 is quite broad. The United States Supreme Court has intimated as much in Malone v. White Motor Corp., (plurality opinion), supra, 435 U.S. at 512, 98 S.Ct. at 1193 (plurality opinion), and other federal courts have consistently so held, see e. g., Wadsworth v. Whaland, 562 F.2d 70, 76-77 (1st Cir.1977), cert. denied, 435 U.S. 980-81, 98 S.Ct. 1630, 56 L.Ed.2d 72 (1978); Bell v. Employee Security Benefit Ass'n, 437 F.Supp. 382 (D.Kan.1977); Wayne Chemical, Inc. v. Columbus Agency Service Corp., 426 F.Supp. 316 (N.D.Ind.), modified and affirmed, 567 F.2d 692 (7th Cir.1977). 11 This general conclusion, however, is not dispositive of the case before us. 12 We must still decide whether the preemptive effect of section 1144 is so broad that it "unmistakably" extends to the PHRA.

It will be recalled that the preemptive language of section 1144 is that ERISA "shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan . . . ." As one considers this language, it becomes evident that the question we must answer is, What do the words "relate to" mean?

Plainly, the words "relate to" are ambiguous. Do they mean, relate to in any, even the most indirect, way, or only in an intimate, very direct, way? In other words, are they to be read broadly, or narrowly? The gist of Westinghouse's argument is that they are to be read broadly.

Initially it may be noted that Westinghouse's argument is contrary to the general principle that we should "start with the assumption," Rice v. Santa Fe Elevator Corp., supra, that in enacting ERISA, Congress did not intend to preempt the PHRA. Given that...

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