April 09, 2021
The Ninth Circuit Court of Appeals has ruled that the Employee Retirement Income Security Act (ERISA) does not preempt a Seattle ordinance that requires large hotels to provide full-time workers with health care benefits or to pay the equivalent directly to the employee.
The Seattle ordinance requires hotels with 100 or more guest rooms and ancillary hotel businesses to provide full-time workers with health benefits equal to a gold-level policy on the Washington state health exchange or pay the equivalent directly to the employee.
No ERISA preemption: The three-judge panel decision cited Golden Gate Restaurant Association v. San Francisco that "state and local laws enjoy a presumption against [ERISA] preemption" when they govern arenas traditionally ruled by states and cities, such as health care.
HR Policy and other business groups filed an amicus brief supporting the ERISA Industry Committee (ERIC) challenge to the Seattle ordinance. The brief noted the failure to preempt the Seattle law “is all but certain to result in the proliferation of laws like the Ordinance, with severe and adverse consequences for employees and the employer-sponsored benefit system.”
Outlook: It is unclear whether there will be an appeal to the full Ninth Circuit. ERIC's president, Annette Guarisco Fildes, said she is "evaluating next steps" and is in discussions with HR Policy and other employer groups.