Amicus Curiae Brief — The ERISA Industry Committee, Petitioner v. City of Seattle, Washington

No. 21-1019

IN THE

Supreme Court of the United States

_________

THE ERISA INDUSTRY COMMITTEE,

Petitioner,

v.

CITY OF SEATTLE,

Respondent.

_________

On Petition for Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

_________

BRIEF OF THE RESTAURANT LAW CENTER,

NATIONAL FEDERATION OF INDEPENDENT

BUSINESS SMALL BUSINESS LEGAL

CENTER, NATIONAL RETAIL FEDERATION,

INTERNATIONAL FRANCHISE ASSOCIATION,

AND ASIAN AMERICAN HOTEL OWNERS

ASSOCIATION AS AMICI CURIAE

IN SUPPORT OF PETITIONER

_________

Angelo I. Amador

RESTAURANT LAW CENTER

2055 L Street, NW

7th Floor

Washington, DC 20036

(202) 492-5037

aamador@restaurant.org

Joseph J. Torres

Gabriel K. Gillett

Counsel of Record

Kelsey Stimple

JENNER & BLOCK LLP

353 N. Clark Street

Chicago, IL 60654

(312) 840-7220

ggillett@jenner.com

Counsel for Amici Curiae

(Additional counsel listed on inside cover)

Karen Harned

Elizabeth Milito

NFIB SMALL BUSINESS

LEGAL CENTER

555 12th St., NW Suite 1001

Washington, DC 20004

Stephanie A. Martz

NATIONAL RETAIL

FEDERATION

1101 New York Ave., NW

Suite 1200

Washington, DC 20005

i

TABLE OF CONTENTS

TABLE OF AUTHORITIES .......................................... ii

INTEREST OF AMICI CURIAE ................................. 1

INTRODUCTION AND SUMMARY OF

ARGUMENT .......................................................... 4

ARGUMENT ...................................................................... 6

I.

THE NINTH CIRCUIT’S DECISION

SOWS

UNCERTAINTY

BY

FLOUTING

ERISA’S

UNIFORM

NATIONAL

FRAMEWORK

AND

ALLOWING A PATCHWORK OF

PLAY-OR-PAY REGIMES................................. 6

II.

ESPECIALLY NOW, EMPLOYERS

NEED

ERISA’S

NATIONAL

UNIFORMITY..................................................... 11

CONCLUSION ................................................................ 17

ii

TABLE OF AUTHORITIES

CASES

AT&T Mobility LLC v. Concepcion, 563

U.S. 333 (2011) ......................................................... 15

Coopers & Lybrand v. Livesay, 437 U.S. 463

(1978) ........................................................................ 15

FMC Corp. v. Holliday, 498 U.S. 52 (1990) .............. 10

Gobeille v. Liberty Mutual Insurance Co.,

577 U.S. 312 (2016) .............................................. 9, 10

Golden Gate Restaurant Ass’n v. City &

County of San Francisco, 546 F.3d 639

(9th Cir. 2008) ............................................................ 1

Ingersoll–Rand Co. v. McClendon, 498 U.S.

133 (1990) ................................................................... 7

New York State Conference of Blue Cross &

Blue Shield Plans v. Travelers

Insurance Co., 514 U.S. 645 (1995) .................... 7, 9

Shaw v. Delta Air Lines, Inc., 463 U.S. 85

(1983) .................................................................... 9, 10

STATUTES

29 U.S.C. § 1144(a) ...................................................... 5, 9

iii

OTHER AUTHORITIES

Eric Amel et al., Independent Restaurants

Are a Nexus of Small Businesses in the

United States and Drive Billions of

Dollars of Economic Activity That Is at

Risk of Being Lost Due to the COVID-19

Pandemic (June 10, 2020) ...................................... 12

William C. Dunkelberg & Holly Wade,

National Federation of Independent

Business, Small Business Economic

Trends (Dec. 2021), https://assets.nfib.

com/nfibcom/SBET-Dec-2021.pdf ........................ 16

National Federation of Independent

Business, COVID-19 Small Business

Survey (Jan. 4, 2022), https://as

sets.nfib.com/nfibcom/Covid-19-Survey21.pdf ........................................................................ 16

National Restaurant Ass’n, COVID-19

Update: The Restaurant Industry

Impact Survey (Apr. 20, 2020), https://

restaurantsact.com/wp-content/uploads/

2020/04/Infographic-Impact-Survey-Na

tl-Restrnt-Assoc-4.20.20.pdf ................................. 12

National Restaurant Ass’n, Forty states

and DC lost restaurant jobs in January

(Mar. 15, 2021) ......................................................... 12

iv

National

Restaurant

Ass’n,

Most

Restaurants Remained Understaffed in

December (Jan. 7, 2022), https://rest

aurant.org/research-and-media/researc

h/economists-notebook/analysis-comme

ntary/most-restaurants-remained-und

erstaffed-in-december/ ........................................... 16

National Restaurant Ass’n, National

Restaurant Association Statement on

Congressional Recess Without Recovery

Deal (Oct. 27, 2020) ................................................. 11

National Restaurant Ass’n, Restaurant

Industry in Free Fall; 10,000 Close in

Three Months (Dec. 7, 2020) .................................. 12

National Restaurant Ass’n, Restaurant

sales pulled back from a healthy

January (Mar. 16, 2021)......................................... 12

National Restaurant Ass’n, Washington

Restaurant Industry at a Glance (2019) ............. 12

Paul Roberts, Restaurant Workers Go

‘Missing’ Again from Washington’s Job

Recovery, Seattle Times (Jan. 20, 2022) .............. 13

S. Ct. R. 10(c) ................................................................... 5

Daniel C. Schaffer & Daniel M. Fox, SemiPreemption in ERISA: Legislative

Process and Health Policy, 7 Am. J. Tax

Pol’y 47 (1988)............................................................ 9

v

Seattle Office of Labor Standards,

Improving Access to Medical Care for

Hotel Employees Ordinance Fact Sheet

(Sept. 15, 2021) ........................................................ 13

Seattle Office of Labor Standards,

Improving Access to Medical Care for

Hotel Employees Ordinance: Questions

& Answers (revised Nov. 4, 2021) ........................ 14

Howard

Shapiro,

et

al.,

ERISA

Preemption: To Infinity and Beyond

and Back Again? (A Historical Review

of Supreme Court Jurisprudence), 58

La. L. Rev. 997 (1998) .............................................. 8

SMC § 14.28.020 ...................................................... 13, 14

SMC § 14.28.030.B.2 ..................................................... 14

SMC § 14.28.040 ............................................................ 13

SMC § 14.28.060.A ........................................................ 13

SMC § 14.28.060.B ........................................................ 14

SMC § 14.28.060.D ........................................................ 14

SMC § 14.28.110 ............................................................ 14

SMC § 14.28.130 ............................................................ 15

SMC § 14.28.150.E ........................................................ 15

SMC § 14.28.160.C.1 ..................................................... 15

SMC § 14.28.230 ............................................................ 15

SMC § 14.28.235.A ........................................................ 14

vi

James A. Wooten, A Legislative and

Political

History

of

ERISA

Preemption, Part 1, 14 J. Pension

Benefits 31 (2006).................................................. 7, 8

INTEREST OF AMICI CURIAE

1

The City of Seattle enacted Municipal Code 14.28

(the “Ordinance”), which gives employers who own,

control, or operate an “ancillary hotel business” in

Seattle and have 50 or more employees worldwide the

choice of either making minimum monthly healthcare

expenditures on behalf of their covered employees, or

making direct monthly payments to the covered

employee. Whether municipalities can impose such

burdensome, city-specific obligations on select

businesses—in contravention of the national uniformity

that Congress sought to achieve through the Employee

Retirement Income Security Act of 1974 (“ERISA”),

and in violation of ERISA’s broad express preemption

provision—is critically important to a broad and diverse

array of businesses.

Many have been harmed already by the Ninth

Circuit’s controversial decision in Golden Gate

Restaurant Ass’n v. City & County of San Francisco,

546 F.3d 639 (9th Cir. 2008), which found that play-orpay laws were not barred by ERISA. If this Court

permits Seattle to follow Golden Gate’s roadmap and

circumvent ERISA that harm is poised to spread.

Indeed, other major municipalities have already gone on

1 Counsel of record provided timely notice of this brief under Rule

37.2 and all parties have consented to this brief’s filing. Pursuant to

Rule 37.6, no counsel for a party authored this brief “in whole or in

part,” and no counsel or party made a monetary contribution

intended to fund the preparation or submission of this brief. No

person other than amici curiae, its members, or its counsel made a

monetary contribution to the preparation or submission of this

brief.

2

the record to signal their intent to follow in Seattle’s

wake and enact their own policies to accomplish what

ERISA prohibits.

It is critical that this Court recognize the potentially

far-reaching consequences of this case. As businesses

across the economic spectrum continue to address the

unprecedented financial and operational challenges

related to a pandemic, the mandates at issue could

impact not only large national chains but also local

independent operators and small, family-run companies

that operate a range of businesses adjacent to large

hotels. The coalition of amici listed below—representing

the restaurant and hospitality industries as well as

independent, retail, and franchise businesses—therefore

submit this brief to encourage the Court to grant the

petition for certiorari by the ERISA Industry

Committee (“ERIC”), to overturn the Ninth Circuit’s

incorrect and harmful decision below, and to hold that

the Ordinance is preempted.

The Restaurant Law Center is the only public policy

organization created specifically to represent the

interests of the food service industry in the courts. In the

United States, the industry is comprised of over one

million restaurants and other foodservice outlets

employing over 15 million people. Restaurants and other

foodservice providers are the nation’s second-largest

private-sector employers. The Restaurant Law Center

provides courts with the industry’s perspective on legal

issues significantly impacting its members. Specifically,

the Restaurant Law Center highlights the potential

industry-wide consequences of pending cases like this

3

one, through regular participation in amicus briefs on

behalf of the industry.

The National Federation of Independent Business

Small Business Legal Center (“NFIB Legal Center”) is

a nonprofit, public interest law firm established to

provide legal resources and be the voice for small

businesses in the nation’s courts through representation

on issues of public interest affecting small businesses.

NFIB is the nation’s leading small business association,

representing members in Washington, D.C., and all 50

state capitals. While there is no standard definition of a

“small business,” the typical NFIB member employs ten

people and reports gross sales of about $500,000 a year.

To fulfill its role as the voice for small business, the

NFIB Legal Center frequently files amicus briefs in

cases that will impact small businesses.

The National Retail Federation (“NRF”) is the

world’s largest retail trade association and the voice of

retail worldwide. The NRF’s membership includes

retailers of all sizes, formats and channels of

distribution, as well as restaurants and industry

partners from the United States and more than 45

countries abroad. In the United States, the NRF

represents the breadth and diversity of an industry with

more than 52 million employees and contributes $3.9

trillion annually to GDP. As the industry umbrella

group, the NRF regularly submits amicus curiae briefs

in cases raising significant legal issues that are

important to the retail industry.

4

The International Franchise Association (“IFA”) is

the world’s oldest and largest organization representing

franchising worldwide. IFA works to protect, enhance

and promote franchising. IFA members include

franchise companies in over 300 different business

format categories, individual franchisees, and companies

that support the industry in marketing, law and business

development. IFA frequently files amicus briefs in cases

raising critical legal matters of importance to

franchising.

The Asian American Hotel Owners Association

(“AAHOA”) is the largest hotel owners association in

the nation. AAHOA’s nearly 20,000 members own 60

percent of the hotels in the United States and nearly 62

percent of the hotels in the State of Washington.

AAHOA’s members are responsible for 1.7 percent of

the nation’s GDP. With billions of dollars in property

assets and over one million employees, AAHOA

members are core economic contributors in communities

across the United States.

INTRODUCTION AND

SUMMARY OF ARGUMENT

ERIC ably explains in its brief why its petition

should be granted—in particular, because the Ninth

Circuit’s decision finding the Ordinance is not

preempted by ERISA squarely conflicts with decisions

from other circuits and decisions of this Court. See Pet.

14-15 (citing S. Ct. R. 10(a), (c)). Amici write separately

to emphasize the exceptional importance and practical

impact of this issue, which is “an important question of

5

federal law that has not been, but should be, settled by

this Court.” S. Ct. R. 10(c).

In adopting ERISA, Congress sought to create a

national, uniform system for regulating employee

benefit plans. ERISA’s text, its legislative history, and

this Court’s precedent all illustrate that ERISA’s

drafters were concerned with eliminating the financial

burdens associated with conflicting state employee

benefit laws.

The Ninth Circuit has permitted precisely what

ERISA was meant to eliminate. By finding the

Ordinance is not covered by ERISA’s express

preemption provision, which bars state and local laws

that “relate to” employee-benefit plans covered by

ERISA, 29 U.S.C. § 1144(a), the Ninth Circuit’s decision

heightens uncertainty that has and will continue to have

very real economic consequences for businesses

throughout the country. The resulting damper on

economic activity will be particularly pronounced for

restaurants and small businesses—which are still trying

to persevere through the COVID-19 pandemic—as they

attempt to grapple with a patchwork of locally imposed

requirements that ERISA was designed to prevent.

In the wake of the decision below, both small and

large businesses may now feel pressure to comply with

two very different benefit regimes—a uniform

framework authorized by Congress through ERISA,

and a separate system in place wherever a municipality

felt emboldened to impose its own additional obligations.

That patchwork system of competing regulations would

6

be impermissible under any circumstance. But the

Ordinance’s obligations are particularly problematic in

light of the toll the COVID-19 pandemic and resulting

restrictions have taken on a wide variety of restaurant,

hospitality, independent, retail, and franchise

businesses. At a time when every level of government

should be working to ease burdens on businesses for the

benefit of their communities and employees, Seattle and

others seek to engraft their own parochial preferences

onto a national regulatory regime by adding additional

burdens that many businesses simply will be unable to

bear.

This Court should intervene. It should grant ERIC’s

petition for certiorari, reverse the decision below, and

make clear that ERISA’s broad express preemption

provision bars states from imposing “play or pay” laws

that require employers to either create new ERISA

plans, alter existing ERISA plans, or make payments

directly to their employees.

ARGUMENT

I. THE NINTH CIRCUIT’S DECISION SOWS

UNCERTAINTY BY FLOUTING ERISA’S

UNIFORM NATIONAL FRAMEWORK AND

ALLOWING A PATCHWORK OF PLAY-ORPAY REGIMES.

Congress enacted ERISA with the express purpose

of creating a uniform regulatory scheme for employee

benefits nationwide. Its intent, as this Court has

recognized for decades, was “to ensure that plans and

plan sponsors would be subject to a uniform body of

7

benefits law; the goal was to minimize the administrative

and financial burden of complying with conflicting

directives among States or between States and the

Federal Government.” Ingersoll–Rand Co. v.

McClendon, 498 U.S. 133, 142 (1990). In addition, this

Court has explained, Congress intended to prevent “the

potential for conflict in substantive law” that resulted

from “requiring the tailoring of plans and employer

conduct to the peculiarities of the law of each

jurisdiction.” Id. To effectuate that intent, Congress

included an express preemption clause, “[t]he basic

thrust” of which was “to avoid a multiplicity of

regulation in order to permit the nationally uniform

administration of employee benefit plans.” N.Y. State

Conf. of Blue Cross & Blue Shield Plans v. Travelers

Ins. Co., 514 U.S. 645, 657 (1995).

The Ninth Circuit ignored these precedents and

instead blessed a local ordinance that achieves precisely

what ERISA was meant to preempt: the creation of

burdensome local rules that differ depending on the

jurisdiction and that govern the administration of

employee benefit plans and relate to such plans.

Prior to ERISA’s passage, employee benefit plans

were in a state of regulatory confusion. For decades the

federal government took a hands-off approach toward

these plans, allowing private businesses, unions, and

employees to negotiate for benefits freely. See James A.

Wooten, A Legislative and Political History of ERISA

Preemption, Part 1, 14 J. Pension Benefits 31, 32 (2006).

But these privately negotiated benefit plans rarely lived

up to their promise. Inadequate employer funding

8

coupled with lengthy vesting periods meant that

employees routinely lost benefits they thought secure.

Id. Despite the system’s glaring deficiencies, both

employers and unions resisted early federal efforts to

legislate in this space. Id. at 32-33.

In the absence of adequate federal regulation, states

began to pass their own employee benefit laws. Id. at 34.

Unsurprisingly, these laws took vastly different forms.

Some simply required that employers provide

disclosures to state agencies or submit to periodic

inspections. Id. Others demanded much more, some

requiring specific vesting and funding practices that

could vary wildly from state to state. See id. (describing

New Jersey’s particularly “poorly conceived law” that

set burdensome vesting and funding standards).

This resulting patchwork of regulation exposed

employers to incompatible state rules. Id. Without a

national standard, employers were “required to keep

records in some states but not in others; to make certain

benefits available in some states but not in others; [and]

to process claims in a certain way in some states but not

in others.” Howard Shapiro, et al., ERISA Preemption:

To Infinity and Beyond and Back Again? (A Historical

Review of Supreme Court Jurisprudence), 58 La. L.

Rev. 997, 999 (1998). These divergent requirements

saddled employers with steep administrative costs that

caused some to reduce benefits and others to forgo them

entirely. Id.

At the request of both employers and unions (which

had previously resisted any regulation of employee

9

benefit plans) in 1974 Congress passed ERISA, a

“comprehensive statute” that “subjects to federal

regulation plans providing employees with fringe

benefits” like pensions and healthcare expenditures.

Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 90-91 (1983).

Among other things, ERISA created uniform standards

for “reporting, disclosure, and fiduciary responsibility”

that applied to all employee benefit plans, id. at 91, and

set strict standards for the administration of benefit

plans should employers choose to provide them.

Travelers, 514 U.S. at 650-51.

In passing ERISA, Congress aimed to replace the

inconsistent state benefit plan laws with a single,

uniform, national scheme, pushing for what has been

described as “the most expansive pre-emption provision

in any federal statute.” Gobeille v. Liberty Mut. Ins. Co.,

577 U.S. 312, 327 (2016) (Thomas, J., concurring). In

“terse but comprehensive” terms, id. at 319-20 (majority

op.), the provision states that ERISA “shall supersede

any and all State laws insofar as they may now or

hereafter relate to any employee benefit plan” covered

by the statute, 29 U.S.C. § 1144(a). After the preemption

clause was added to the bill, Pennsylvania Congressman

John Dent celebrated it as the legislation’s “crowning

achievement,” because it eliminated the “threat of

conflicting and inconsistent state and local regulation.”

Daniel C. Schaffer & Daniel M. Fox, Semi-Preemption

in ERISA: Legislative Process and Health Policy, 7 Am.

J. Tax Pol’y 47, 49 (1988) (quoting 120 Cong. Rec. 29,197

(1974)).

10

This Court has long recognized Congress’s interest

in preserving a uniform, national system for regulating

employee benefits. For example, more than thirty years

ago this Court noted that preemption “is compelled”

when “Congress’ command is explicitly stated” and

invalidated a state law that regulated employer

sponsored healthcare benefits—as the Ordinance does

here. Shaw, 463 U.S. at 95 (quotation marks omitted); id.

97, 108 (invalidating a provision of New York Human

Rights Law that required employers to provide specific

healthcare benefits); FMC Corp. v. Holliday, 498 U.S.

52, 60 (1990) (invalidating Pennsylvania statute that

prohibited healthcare “plans from … requiring

reimbursement in the event of recovery from a third

party”).

Consistent with the text of ERISA and the purpose

underlying its enactment, employers across the economy

have come to rely on the predictability and uniformity

that ERISA affords in administering employee benefit

plans. This Court has recognized that “[d]iffering, or

even parallel, regulations from multiple jurisdictions

could create wasteful administrative costs and threaten

to subject plans to wide-ranging liability.” See, e.g.,

Gobeille, 577 U.S. at 323. By contrast, ERISA allows

employers of all sizes to create effective benefit plans for

their employees regardless of where they live, work, or

receive healthcare. ERISA also provides real

advantages to smaller businesses, which may be

constrained from attempting to understand, much less

tailor, benefit and compliance programs to the

proclivities of particular jurisdictions.

11

The Ninth Circuit’s decision below, built on its prior

decision in Golden Gate, undermines this predictability

while conflicting with this Court’s current teaching and

with decisions from other circuits. Accordingly, this

Court should grant certiorari to provide businesses with

the predictability and uniformity that they have long

relied upon and that Congress sought to achieve.

II. ESPECIALLY NOW, EMPLOYERS

ERISA’S NATIONAL UNIFORMITY.

NEED

Providing clarity and predictability is particularly

important to protect the millions of restaurant,

hospitality, retail, independent, and franchise businesses

from unnecessary and burdensome attempts by

localities to deviate from a uniform national regime like

ERISA. This unpredictability comes during a

particularly challenging time for businesses as they try

to recover from the COVID-19 pandemic.

The restaurant and hospitality industries have been

hit especially hard over the past two years. To varying

degrees at different points, “[v]irtually every kind of

restaurant [has been] suffering: the corner diner, the

independents, the individual owners of full-service

restaurant chains.”2 In April 2020, for example, over

eight million restaurant employees—nearly two thirds

of the restaurant workforce—had been laid off or

2 Nat’l Restaurant Ass’n, National Restaurant Association

Statement on Congressional Recess Without Recovery Deal (Oct.

27, 2020).

12

furloughed due to the pandemic.3 By the end of 2020,

nationwide restaurant and foodservice sales were “down

$270 billion from expected levels” and industry

employment had decreased in every state and the

District of Columbia.4 Meanwhile, more than 110,000

establishments—which were in business for over

sixteen years, on average—were “closed permanently or

long-term.”5

These closures have negative consequences far

beyond the individual business that shuts down.

Closures can devastate neighborhoods as the impact

reverberates; a restaurant contributes to the livelihood

of dozens of employees, suppliers, purveyors, and

related businesses.6 Restaurant closures also harm the

economy more broadly, as every dollar spent at tableservice restaurants returns roughly two dollars to the

state’s economy and boosts the state’s tax revenue.7

Restaurant closures can also harm local culture and

3 Nat’l Restaurant Ass’n, COVID-19 Update: The Restaurant

Industry Impact Survey (Apr. 20, 2020), https://restaurant

sact.com/wp-content/uploads/2020/04/Infographic-Impact-SurveyNatl-Restrnt-Assoc-4.20.20.pdf.

4 Nat’l Restaurant Ass’n, Restaurant sales pulled back from a

healthy January (Mar. 16, 2021); Nat’l Restaurant Ass’n, Forty

states and DC lost restaurant jobs in January (Mar. 15, 2021).

5 Nat’l Restaurant Ass’n, Restaurant Industry in Free Fall; 10,000

Close in Three Months (Dec. 7, 2020).

6 Eric Amel et al., Independent Restaurants Are a Nexus of Small

Businesses in the United States and Drive Billions of Dollars of

Economic Activity That Is at Risk of Being Lost Due to the COVID19 Pandemic (June 10, 2020).

7 Nat’l Restaurant Ass’n, Washington Restaurant Industry at a

Glance (2019).

13

stability: restaurants help foster unique neighborhood

identities, drive commercial revitalization, and anchor

those focused on seeing their neighborhoods grow and

thrive.

Washington State was ground zero for the pandemic

in the United States, and two years later its restaurant

industry has yet to recover. “Even after more than 18

months of economic recovery,” as of January 2022

“Washington’s leisure and hospitality business is still

missing around 40,000, or 11.5%, of the workers it had in

December 2019.”8 Although the industry had been

adding jobs in fall 2021, the omicron variant “knocked

out many restaurant workers while scaring away some

diners,” and in December 2021 “the industry suffered a

net loss of 2,200 jobs, or 0.7% of its already undersized

workforce.”9

It is against this backdrop that Seattle passed the

Ordinance, purporting to reach an “ancillary hotel

business” with 50 or more employees worldwide. See

SMC §§ 14.28.040, 14.28.020. For each qualified

employee the law adds additional expense of between

$459 and $1,375. SMC § 14.28.060.A (listing 2019 rates

“subject to annual adjustments based on the medical

inflation rate”); see Seattle Off. of Lab. Standards,

Improving Access to Medical Care for Hotel Employees

Ordinance Fact Sheet 2 (Sept. 15, 2021). To determine

the proper amount, the employee must “make

8 Paul Roberts, Restaurant Workers Go ‘Missing’ Again from

Washington’s Job Recovery, Seattle Times (Jan. 20, 2022).

9 Id.

14

reasonable efforts to obtain accurate information” about

their employees’ family composition. Seattle Off. of Lab.

Standards, Improving Access to Medical Care for Hotel

Employees Ordinance: Questions & Answers 7 (revised

Nov. 4, 2021). Those expenses must be paid through

either (1) increased compensation given directly to the

employees, (2) increased payments to the employees’

health insurance carrier or a related healthcare account,

or (3) increased monthly expenditures toward the

employees’ healthcare services if the employer selfinsures. SMC § 14.28.060.B. The law further establishes

a complex system of waivers and exemptions, see id.

§§ 14.28.060.D, 14.28.030.B.2, 14.28.235.A, and an

onerous set of record-keeping requirements, see id.

§ 14.28.110. In other words, the Ordinance requires

small and large businesses alike to navigate a complex

labyrinth of conflicting employee benefit rules—with all

the attendant inefficiency.

What is more, the Ordinance imposes these

requirements without even making clear what

businesses are within its ambit. Whether a company is

an “[a]ncillary hotel business” under the Ordinance

depends on whether a business “routinely contracts with

the hotel for services in conjunction with the hotel’s

purpose,” “leases or sublets space at the site of the hotel

for services in conjunction with the hotel’s purpose,” or

“provides food and beverages, to hotel guests and to the

public, with an entrance within hotel premises.” Id.

§ 14.28.020. What constitutes “routine,” how to discern a

hotel’s “purpose,” and who a business is serving may be

subject to different reasonable interpretations. As a

result, business owners are left not only with questions

15

about whether the law can be enforced, but also whether

it even applies to them in the first place.

That lack of certainty is especially problematic as

applied to the restaurant and foodservice industry,

which operates a wide variety of service models

(including delivery, in-house, and third-party catering),

in a wide variety of locations (including out of trucks or

malls), and on a wide variety of platforms (including

rented kitchens). Yet many businesses—especially small

businesses and members of the beleaguered restaurant

and hospitality industries—may feel compelled to

comply with the Ordinance nevertheless. Potential fines,

penalties, or unspecified other remedies loom large, see

id. §§ 14.28.130, 14.28.150.E, 14.28.160.C.1, as does the

possibility for being targeted by the class-action

plaintiffs’ bar wielding a private right of action, see id.

§ 14.28.230. The mere risk of facing a certified class “may

so increase the defendant’s potential damages liability

and litigation costs” that even the most surefooted

defendant “may find it economically prudent to settle

and to abandon a meritorious defense.” Coopers &

Lybrand v. Livesay, 437 U.S. 463, 476 (1978); accord

AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 350

(2011) (“Faced with even a small chance of a devastating

loss, defendants will be pressured into settling

questionable claims.”).

In the midst of continuing challenges related to a

global pandemic, the financial and other burdens created

by Seattle’s experiment may be simply too much to bear

for even the hardest working members of the business

community. Though there has been some improvement

16

in recent months, these gains remain precarious and

unevenly distributed, with 92% of small businesses

experiencing supply chain disruptions and 72% suffering

from staffing shortages.10 Employment levels in the

restaurant industry remain roughly 650,000—or 5.3%-below pre-pandemic staffing levels.11 Sales levels for

nearly one-third of small businesses are still down

considerably as compared to before the COVID-19

pandemic.12 And business owners are preparing for yet

another turbulent year.13

In these uncertain times, governments should be

redoubling efforts to protect the businesses that create

jobs and serve our communities. Seattle has instead

pushed ahead with an ordinance that aims to encumber

business owners and operators with the prospect of

expensive new benefit requirements and steep

administrative costs, in direct contravention of the

predictability and uniformity that ERISA was intended

to provide. And other municipalities are lying in wait to

see if they, too, can impose their own jurisdictionspecific rules for employee benefits. If they can—and if

10 Nat’l Fed’n of Indep. Bus., COVID-19 Small Business Survey

(Jan. 4, 2022), https://assets.nfib.com/nfibcom/Covid-19-Survey21.pdf.

11 Nat’l Restaurant Ass’n, Most Restaurants Remained

Understaffed in December (Jan. 7, 2022), https://restaurant.org/

research-and-media/research/economists-notebook/analysis-comm

entary/most-restaurants-remained-understaffed-in-december/.

12 COVID-19 Small Business Survey, supra.

13 William C. Dunkelberg & Holly Wade, Nat’l Fed’n of Indep. Bus.,

Small Business Economic Trends 3 (Dec. 2021), https://assets.

nfib.com/nfibcom/SBET-Dec-2021.pdf.

17

ERISA’s express preemption provision is not enforced

as Congress intended—the result could be a return to

the pre-ERISA days when employers faced a dizzying

patchwork of rules that imposed major economic and

administrative burdens. Such a harmful result should

not come to pass.

CONCLUSION

The Court should grant the petition for a writ of

certiorari.

February 18, 2022

Angelo I. Amador

RESTAURANT LAW CENTER

2055 L Street, NW

7th Floor

Washington, DC 20036

(202) 492-5037

aamador@restaurant.org

Karen Harned

Elizabeth Milito

NFIB SMALL BUSINESS

LEGAL CENTER

555 12th St., NW Suite 1001

Washington, DC 20004

Respectfully submitted,

Joseph J. Torres

Gabriel K. Gillett

Counsel of Record

Kelsey Stimple

JENNER & BLOCK LLP

353 N. Clark Street

Chicago, IL 60654

(312) 840-7220

ggillett@jenner.com

Stephanie A. Martz

NATIONAL RETAIL

FEDERATION

1101 New York Ave., NW

Suite 1200

Washington, DC 20005

Counsel for Amici Curiae