Federal Preemption of State and Local Paid Sick Leave Laws

I relish preemption arguments.  I am not referring to the state preemption laws which preclude municipalities from enacting local labor legislation (and which you can find by clicking on “Preemption States” on my menu bar above).  I am referring to an argument by an entity that a claim under a state or local law cannot be brought against it, i.e., is preempted, because the law interferes with federal purposes and objectives.

My appreciation for preemption arguments began with a lecture when I was in law school on the importance of procedural arguments.  At the end of the lecture, the professor asked provocatively: what kind of lawyer are you if you need to get to the merits of an argument?  In my decades of employment law practice, I have tried in every case to avoid the merits. With some success. The tools available for doing so include conflict preemption, obstacle preemption, field preemption, express and implied preemption, and more.

A federal preemption defense is only worth considering in a very narrow range of cases. There have been very few preemption cases dealing with paid sick leave laws. In July 2016, a railroad argued that the Massachusetts Earned Sick Time Law was preempted by the Railroad Unemployment Insurance Act (RUIA), hammer-1707721_640-1the Railway Labor Act and ERISA.  The parties agreed that the court would address the RUIA argument initially. The federal district court judge noted that federal regulation of railroad labor standards has been “longstanding and pervasive,” dating back to 1938. The court concluded that the RUIA “reflects clear congressional intent that the RUIA preempt all state laws, including the [Earned Sick Time Law] that relate to sickness benefits for railroad workers.” CSX Transportation, Inc. v. Healey (D. MA, July 13, 2016).

A year earlier, a group of construction contractors whose employees were represented by labor unions argued that the Massachusetts Earned Sick Time Law was preempted by Section 301 of the Labor Management Relations Act because resolution of claims under the state paid sick law depended upon an interpretation of their collective bargaining agreements.  The federal district court judge rejected the contractors’ claim.  Labor Relations Division of Construction Industries of Massachusetts v. Healey (D.MA, July 9, 2015). The contractors appealed to the Court of Appeals for the First Circuit. That court heard oral argument on the appeal in mid-September, 2016 but has not yet issued an opinion.

Another employee leave preemption decision, though not specifically a paid sick leave law case, is the Sixth Circuit’s decision is Sherfel v. Newsom, 768 F.3d (6th Cir. 2014). There, Nationwide had an ERISA plan that provided STD, LTD and Your Time benefits for absences from work. Enforcing the Wisconsin Family and Medical Leave Act, the state required Nationwide to pay STD benefits to employees who did not meet the definition of “disabled” under its STD plan. Nationwide sued in federal court,  arguing that the Wisconsin FMLA was preempted by ERISA to the extent it required Nationwide to pay STD benefits to employees who were not STD-disabled under the terms of its plan. The district court judge agreed and the Sixth Circuit affirmed, holding that the state FMLA was “preempted in no less than five different ways: three of them express, two of them implied—and each of them an independent reason that compels us to hold the Act invalid as applied here.”

I anticipate we will see more federal preemption arguments made. For those seeking to avoid the merits of a claim, it is a handy tool to have available for the right situation.