In a story inexplicably buried on page B2, the Wall Street Journal reports that a federal judge in Maryland has ruled that the state legislature there may not run Wal-Mart's budgeting process:
The Maryland law sought to require employers with more than 10,000 workers in the state to pay a penalty to the state's health-insurance program if they fell short of spending a specific amount on health-care coverage for their employees. That threshold was an amount equal to 8% of the employer's payroll in the state.Only eight nongovernment entities in Maryland employ more than 10,000 workers. Of those, only Wal-Mart fell short of the 8% threshold for for-profit businesses.
In February, the Retail Industry Leaders Association, a group of 400 large retailers, sued Maryland's secretary of labor, licensing and regulation in U.S. District Court, arguing that the Maryland law encroaches on the purview of the federal Employee Retirement Income Security Act of 1974. Yesterday, U.S. District Judge J. Frederick Motz agreed with the trade group and granted its request for summary judgment.
In his ruling, Judge Motz found that the law sought not to generate revenue for the state but to force employers to provide a specific level of health-care coverage for their workers, an area governed by Erisa. "The act violates Erisa's fundamental purpose of permitting multistate employers to maintain nationwide health and welfare plans, providing uniform nationwide benefits and permitting uniform national administration," the judge wrote in his opinion.
The unions are pushing similar bills in 23 other states, and this ruling is going to make it tough sledding for those should they become law.
On the other hand, the fact that the judge ruled that spending other peoples' money this way is the exclusive province of the Federal government is less than comforting.
Once again: how do they know 8% is "right?" And if it isn't, why are they so sure it's not too low?
