482 U.S. 1 (1987)
In 1972, Fort Halifax Packing Company purchased a poultry packaging and processing plant in Winslow, Maine, that had operated for almost two decades.1 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.2 At the time of closing, over 100 employees were on the payroll, forty-five of whom had worked in the plant for over 10 years, nineteen for over 20 years, and two for 29 years.3
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.4 While Fort Halifax initially suggested that reopening the plant might be feasible if the union agreed to concessions in the form of amendments to the collective-bargaining agreement, the company ultimately decided against resuming operations.5
On October 30, 1981, eleven employees filed suit in Superior Court seeking severance pay pursuant to Me. Rev. Stat. Ann., Tit. 26, §625-B (Supp. 1986-1987).6 The statute 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.7 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.8 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of the Bureau of Labor Standards also commenced an action to enforce the provisions of the state law, which action superseded the suit filed by the employees.9
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.10 The Maine Supreme Judicial Court affirmed that decision.11 The United States Supreme Court noted probable jurisdiction and now affirms the judgment.12
Whether the Maine statute requiring employers to provide a one-time severance payment to employees in the event of a plant closing is preempted by ERISA?13
ERISA's preemption provision supersedes state laws insofar as they relate to any employee benefit plan, 29 U.S.C. § 1144(a).14 The provision targets state laws that would subject an employer's administrative scheme to conflicting requirements across jurisdictions.15 A state statute requiring only a one-time lump-sum payment triggered by a single event does not establish or require maintenance of an employee benefit plan under ERISA.16 It creates no ongoing administrative program for processing claims or disbursing benefits on a regular basis.17
No. The Maine statute neither establishes nor requires an employer to maintain an employee benefit plan under ERISA.18 The requirement of a one-time lump-sum payment triggered by a single event requires no administrative scheme whatsoever to meet the employer's obligation.19 The employer assumes no responsibility to pay benefits on a regular basis and thus faces no periodic demands on its assets that create a need for financial coordination and control.20 Rather, the employer's obligation is predicated on the occurrence of a single contingency that may never materialize.21
To the extent that the obligation arises, satisfaction involves only making a single set of payments at the time the plant closes.22 To do little more than write a check hardly constitutes the operation of a benefit plan.23 Once this single event is over, the employer has no further responsibility.24 The theoretical possibility of a one-time obligation in the future simply creates no need for an ongoing administrative program for processing claims and paying benefits.25
Therefore, the statute does not relate to an employee benefit plan and is not preempted by ERISA.26
The Maine statute is not preempted by ERISA because it does not relate to an employee benefit plan.27
Related opinions on this issue
Joined by The Chief Justice, Justice O’connor, And Justice Scalia
Justice White, joined by The Chief Justice, Justice O’Connor, and Justice Scalia, dissented from the majority's conclusion on ERISA preemption.28 He argued that the Maine statute clearly creates an employee benefit plan as defined in 29 U.S.C. §1002(1).29 A state law which requires employers to pay employees specific benefits clearly relates to benefit plans as contemplated by ERISA's pre-emption provision.30
Justice White contended that the majority's focus on the existence of an administrative scheme creates a loophole that will allow States to dictate a wide array of employee benefits by characterizing them as non-administrative.31 He noted that the Court has chosen to ignore completely what precedent exists as to what constitutes a plan under ERISA.32 It is incredible to believe that Congress intended the broad preemption provision to depend upon the extent to which an employer exercised administrative foresight in preparing for the eventual payment of employee benefits.33 Justice White would have held that the statute is preempted by ERISA.34
Whether the Maine statute is preempted by the NLRA?35
The NLRA does not preempt state laws that establish minimum labor standards.36 Such laws do not intrude upon the collective-bargaining process.37 The NLRA is concerned with ensuring an equitable bargaining process, not with the substantive terms that may emerge from such bargaining.38 The establishment of labor standards falls within the traditional police power of the State.39
No. The Maine statute establishes a minimum labor standard that 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.40 The statute does not directly regulate any economic activity of either of the parties, nor does it seek directly to force a party to forgo the use of one of its economic weapons.41 Instead, it provides protections to individual workers and neither encourages nor discourages the collective-bargaining processes that are the subject of the NLRA.42 The fact that the statute permits the parties to negotiate their own severance pay arrangements further supports that it works no intrusion on collective bargaining.43
When a state law establishes a minimal employment standard not inconsistent with the general legislative goals of the NLRA, it conflicts with none of the purposes of the Act.44
The Maine statute is not preempted by the NLRA.45