Retail Industry Leaders Association Challenges 'Wal-Mart Law'

ARLINGTON, Va. -- The Retail Industry Leaders Association (RILA), a retail trade group here representing companies that operate more than 100,000 stores, yesterday filed suits challenging the so-called "Wal-Mart law" and another health care law, arguing that they "unlawfully mandate a specific health care expenditure, single out the retail industry, and threaten to eliminate the flexibility that businesses require to meet the needs of their diverse workforce." The lawsuits were filed in U.S. District Courts in Baltimore and Brooklyn, N.Y.

"We all agree that access to health care is vital, but these spending mandates will drive away business and discourage job creation," said Brad Anderson, RILA chairman and vice chairman and c.e.o. of Best Buy Co., Inc., in a statement. "They're simply unlawful and unwise."

The Wal-Mart law was enacted Jan. 12 when the Democratic-controlled legislature overrode a veto. The law requires companies with more than 10,000 employees in Maryland to spend at least 8 percent of payroll on health care or contribute the difference to the state Medicaid fund. State officials said Wal-Mart is the only company of that size that doesn't meet the 8 percent threshold.

The other health care law that the trade group is opposing was passed in Suffolk County, N.Y. last fall. The law would require large grocery retailers to give workers a health care benefit worth at least $3 an hour. The law applies to companies with at least $1 billion in annual revenue and at least 25,000 square feet of sales space for groceries. Companies are exempt from the rule if they have a collective bargaining agreement, which Wal-Mart doesn't.

"The health care system cannot be fixed with a patchwork of state and local mandates that require individual industries to play by different rules," said James M. Myers, c.e.o. of PETCO Animal Supplies, Inc., a RILA member. "It's a national issue that requires a national approach."

In the lawsuits RILA asserts that state and local laws regulating employee health benefit plans are invalidated by federal law, specifically the Employee Retirement Income Security Act (ERISA).

"Over the past three decades the Supreme Court of the United States has held repeatedly that ERISA, not state and local laws, regulates employer health plans," said Steve Cannon of the law firm of Constantine Cannon, outside General Counsel to RILA. "Now that the legislative process has played out in Maryland and Suffolk County, it is time to challenge these newly enacted health plan mandates in the courts."

RILA also asserts that the statutes violate the Equal Protection Clause of the U.S. Constitution because they were written to single out specific companies for arbitrary treatment.

In response issued the following statement, attributed to Paul Blank, campaign director:

"Today's lawsuit is just another attempt by Wal-Mart and its allies not to pay its fair share for health care in the state of Maryland and elsewhere. The Maryland Attorney General has already said Fair Share Health Care legislation is in compliance with the law. Wal-Mart would be better off changing its behavior and living up to its responsibilities. States should be applauded, not sued, for trying to address the fact that in every state where we have data, Wal-Mart is costing taxpayers millions by having more employees on taxpayer-funded health care than any other employer."
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