Wednesday the 4th Circuit upheld a ruling that struck down a Maryland law passed last year that would have required Wal-Mart to spend at least 8% of its payroll on health care benefits for its employees. The 4th Circuit said the law was pre-empted by ERISA.
On its face, the Maryland law did not apply solely to Wal-Mart, but to all corporations with 10,000 or more employees. In reality, only four corporations fell within that category and three of the four were either exempt or had already met the law’s thresholds. Which left Wal-Mart the last corporation standing.
The 4th Circuits ruling, however, enables Wal-Mart to avoid Maryland’s efforts at regulating its benefits, while making it difficult for other states to follow Maryland’s lead. Indeed, after the law passed in Maryland, efforts began to replicate the law elsewhere. However, those efforts may have proved difficult even without the 4th Circuit’s ruling. The narrow focus of Maryland’s law not only assured its success in Maryland, but also underscored the difficulties it would face in other states. These kind of “Wal-Mart” only laws have a better chance of success simply because they may not get as much resistance from the business community. However, since many other states were seeking to cast a wider net, the resistance to legislative action likely would have increased.
On a broader note, this ruling is another round in our “Wal-Mart vs. the world” battle. On one side of the ledger is the problem of Wal-Mart as “target” and even “scapegoat.” Indeed, Wal-Mart’s spokesperson and its supporters claim that most of these laws are not aimed at preventing illegality on the part of Wal-Mart, but rather at seeking to hold Wal-Mart accountable for addressing societal problems. On the other side, of course, are the many groups that claim to be harmed by Wal-Mart’s actions. Maryland legislators got a lot of support from the public and unions who claimed that the law was necessary to ensure that large corporations pay their fair share of health care costs. Maryland also got support from businesses arguing that Wal-Mart’s policies put corporations in the difficult position of either downgrading their own health care benefits or facing a competitive disadvantage. I have to say it is hard to keep score in this battle because while Wal-Mart seems to be losing ground with respect to public opinion, rulings such as this one seem to be a big victory for the company many people love to hate.
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1. Posted by Jake on January 19, 2007 @ 20:22 | Permalink
I don't understand the statement that "Wal-Mart seems to be losing ground with respect to public opinion." Whose opinion? Is Wal-Mart losing ground with the millions of consumers who shop there? I fully appreciate that some in the intelligentsia would rather that the common folk shop at Costco, for example, which is reputed to have more employee-friendly practices than Wal-Mart. But why not let the common folk shop where they please? And why presume that anyone who wishes to buy a consumer good at a price they find acceptable should contemplate how the vendor runs its business? It is a pity the 4th Circuit's decision went off on ERISA preemption grounds. More refreshing would be a judicial reaffirmation of free enterprise.
2. Posted by M.E. Lopez on January 22, 2007 @ 8:25 | Permalink
I'm no Objectivist, but I'll be damned if stories like this don't sound like something out of the beginning of Atlas Shrugged.
The similarity is downright eerie.
3. Posted by Wildmonk on January 22, 2007 @ 8:28 | Permalink
This is the part that I love:
"necessary to ensure that large corporations pay their fair share of health care costs"
You know, I'm getting pretty tired of all these bills I have to pay when I use stuff. So when the hell are these "large corporations" going to do the right thing and pay their "fair share" of my grocery bill? I'd appreciate it if they'd get off their rich, fat behinds and pay up for my water bill, too. Can't live without water, you know.
And have you seen my heating bill? Do you know how much gas costs? What the hell is wrong with these people? Surely they know that they are falling damn short of their "fair share" when it comes to my household.
4. Posted by nbpundit on January 22, 2007 @ 8:49 | Permalink
The whole scenario is ridiculous. First,
there's not been a gun put to anyone's head
to either shop or work at or for Walmart.
Walmart owes nothing to her employees but a
safe and clean environment and the wages earned. All else is icing on the cake.
Walmart is big enough and rich enough to close the doors on every store she owns and never look back.
Socialism is barking at Walmarts heels because of her great success as free enterprise.
Now, isn't that just like life, unfair.
5. Posted by Chris Land on January 22, 2007 @ 8:54 | Permalink
I am an Objectivist, and I agree that it sounds like something out of Atlas Shrugged.
6. Posted by _Jon on January 22, 2007 @ 9:02 | Permalink
What is ERISA?
7. Posted by biff on January 22, 2007 @ 9:18 | Permalink
What is ERISA?
Try a google or wikipedia search.
8. Posted by Catherined35 on January 22, 2007 @ 9:21 | Permalink
Excellent post Wildmonk.
I have a liberal friend who is always ranting about "corporate" America. They are responsible for every problem including her aching back, her wrist problems...and she's attempting to sue workers comp.
When I saw what Wal-Mart offers it's employees, I thought it looked pretty good and fair. It benefits people who work hard and remain at Wal-Mart and gives them a choice of different plans. And the anti-corporate people do not seem to know that a place like Wal-Mart has high-turnover with seasonal/teenage/part-time workers who are either there to make a few bucks for a period or are the type of people who can not handle the responsibility of getting up and going to work on a schedule (due to drugs or other problems).
These activists have a fantasy that ALL people at the bottom employment rung are all extremely hard working and dedicated in the mold of Hollywood working class - you know, gets up rain or shine, sickness and health to work in the factory/coal mine etc. If anyone has ever worked or volunteered in employment services, you know that's not true. In fact, the only people I have ever witnessed that sort of dedication and drive at the bottom was from immigrants - and they stand out and are often rewarded because they are refreshingly diligent (by the people I was employed by at least - my experience). It's also the reason why Wal=Mart employs a lot of retirees - they ENJOY being greeters and being among people and having a purpose (it's not just about the extra bucks).
Sorry to go on....
9. Posted by Peter on January 22, 2007 @ 9:28 | Permalink
Every time the Republicans get me angry enough to sit out an election or two, the Donks do something like attacking Wal Mart.
While I am sure that some Wal Mart employees need more than they are getting, that is true of all employees, everywhere. I shop Wal Mart and know many of the employees, 90%+ of the part timers with no benefits are wives or husbands with health befefits from their spouses jobs or are retirees with both pensions and benefits from their old jobs.
The unions are angry because I choose to spend my money at Wal Mart rather than their closed shops. Tough.
10. Posted by Another Gal on January 22, 2007 @ 9:32 | Permalink
I am not a lawyer but the Maryland law struck me as a really weird piece of legislation that was, in fact targeting a specific business. Now there ought to be a law against that ....
Agee with the person posting who said no one forced anyone to work or shop at Wal-Mart. Exactly. But there is a committment by some to saving us from ourselves -- business person and customer -- without our permission.
For all the evil Wal-Mart is supposed to be sowing, my 90 year old mother saves a considerable amount of money there which, on her thousand and change Social Security makes a big impact on her quality of life. And she gets to choose how and when she uses her money saved. Me? I am sure I have more disposable income for the "little guy businesses" -- because I shop at Wal-Mart.
Sometimes it's messy, but Americans are who we are and we can and will sort it out for ourselves without some do-gooders nannying us into their more perfect consciousness and superior lifestyle.
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