Federal Court Upholds Invalidation of "Wal-Mart Law"

Mike Simon

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The Fourth Circuit Court of Appeals has upheld the invalidation of a Maryland law that would have required Wal-Mart to spend more money on employee health care.

The law would have required Wal-Mart and all other non-governmental employers with more than 10,000 workers to spend 8% of their payroll on healthcare or pay the difference in taxes to the state.

The Retail Industry Leaders Association, of which Wal-Mart is a member, filed suit in February against the law, contending it unfairly targeted Wal-Mart. The federal district court ruled that the Maryland law was preempted by the Employee Retirement Income Security Act, commonly known as "ERISA," finding that ERISA pre-empts state laws relating to any employee benefit plan. The Fourth Circuit agreed, affirming the decision.

The Maryland law was aimed toward cutting the state's $4.6 billion annual Medicaid tab by encouraging employers to keep their employees off public health care rolls.