Shaw v. Delta Air Lines, Inc.

Supreme Court of the United States · 1983 · Federal Courts

Federal CourtsERISA preemptionFederal preemptionERISASection 514(a)Section 514(d)Section 4(b)(3)relate to

Facts

New York's Human Rights Law prohibited sex discrimination in employment, and the New York Court of Appeals had interpreted it to forbid private employers from treating pregnancy differently from other nonoccupational disabilities in employee benefit plans. New York's Disability Benefits Law required employers to provide specified benefits for employees unable to work because of pregnancy or other nonoccupational disabilities. The appellees maintained ERISA-covered welfare plans that, before the federal Pregnancy Discrimination Act took effect, did not provide pregnancy-related benefits required by these New York laws. They sued to block enforcement of the state laws on the ground that ERISA preempted them.

Issue

Whether New York's Human Rights Law and Disability Benefits Law are preempted by ERISA. If they relate to employee benefit plans under ERISA § 514(a), the further questions are whether § 514(d) saves the Human Rights Law to any extent and whether § 4(b)(3) exempts plans affected by the Disability Benefits Law from ERISA coverage.

Rule

Under ERISA § 514(a), a state law "relates to" an employee benefit plan if it has a connection with or reference to such a plan, and such laws are broadly preempted unless a statutory exception applies. Section 514(d) preserves state laws only insofar as preemption would impair or modify federal law, so state fair employment laws survive only to the extent they provide a means of enforcing Title VII's substantive commands. Section 4(b)(3) exempts from ERISA only a plan, as a separate administrative unit, maintained solely to comply with state disability insurance law; portions of a multibenefit ERISA plan are not exempt.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Ohio, a statute requires employers that offer any employee sickness plan to include at least 10 weeks of paid leave for recovery from fertility-treatment complications. Lakeside Fabrication, a Cleveland manufacturer, provides those benefits through an ERISA-covered welfare plan and argues the statute is not preempted because the law is part of the State's general labor code rather than a statute aimed specifically at benefit plans.

How should a court rule on whether ERISA preempts the Ohio statute as applied to Lakeside's plan?

Explanation. Under the majority's rule, a state law "relates to" an employee benefit plan if it has a connection with or reference to such a plan. The Court rejected the argument that § 514(a) reaches only laws specifically designed to regulate ERISA plans or only laws addressing subjects ERISA itself regulates. A state law requiring particular benefits in an employer's sickness plan therefore relates to the plan and is broadly preempted unless a statutory exception applies. (Derived from Shaw v. Delta Air Lines, Inc. (1983).)