Petition for Writ of Certiorari — Hannaford Bros. v. Ciampi

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96 65 5 OCT 24 19%

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No ig Ob THE CLERK

In The

Supreme Court of the United States

October Term, 1996

*

HANNAFORD BROS. CO.,

Petitioner,

THERESA CIAMPI,

Respondent.

¢

Petition For A Writ Of Certiorari

To The Supreme Judicial Court Of Maine

¢

PETITION FOR A WRIT OF CERTIORARI

*

WILLIAM J. KayatTa, Jr.,

(Counsel of Record)

Prerce ATwoop

One Monument Square

Portland, Maine 04101

(207) 791-1100

JOHN F. LAMBERT, Jr.

BLack, LAMBERT, COFFIN & RUDMAN

477 Congress St. 14th Floor

P.O. Box 15215

Portland, Maine 04112-5215

(207) 871-7033

Counsel for Petitioner

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTION PRESENTED

Whether a state workers’ compensation statute, requiring

employers who administer ERISA-covered employee ben-

efit plans to include in an inactive employee’s average

weekly wage “any fringe or other benefit that does not

continue during the disability,” relates to an ERISA-cov-

ered employee benefit plan within the meaning of

ERISA’s preemption provisions, and conflicts with the

holdings of this Court in District of Columbia v. Greater

Washington Bd. of Trade, 506 U.S. 125 (1992).

il

TABLE OF CONTENTS

Page

QUESTION PREGGO Fai 64 oc 30 RECO ie is i

CPF SPRUE MEATUS 0.5.5 ic be 0 0hs baw ak shes sbekeeiaa eel 1

PUR oe ees BT wx patnicas veg bn scale Cas eae aos 1

STATUTORY PROVISIONS INVOLVED............. 1

STAT Eames CP Tete Ces ds ciivcawtecsssicct as 4

REASONS FOR GRANTING THE WRIT ........... 8

I. THE DECISION BELOW POSES A PRESENT

AND GROWING THREAT TO THE FEDERAL

REGULATORY UNIFORMITY MANDATED

OY CAPs 6 0 nosh cen oeedanaeeeeaueepnns 8

II. THE COURT BELOW ERRED ON THE

WER ahs. « 65 so kn cd dein thay) Maas eae aad 11

COIMCLLSLIS 5 cbs énsndcnakpeeeneeeneseeeer bones 13

APPENDIX

Opinion of the Supreme Judicial Court of Maine

(july 26, 2996)... ceive vveengaa cede seeaeee App. 1

Decision of the State of Maine Workers’ Compen-

sation Board (April 19, 1995) .........+...56. App. 12

iii

TABLE OF AUTHORITIES

Page

Cases

Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504

oS SARE SE ARR peg ane ROP a yO ne ene rede 9, 10

Carlo v. Reed Rolled Thread Die Co., 49 F.3d 790 (1st

ee EE Se ae eh EAGT Vda RUE D EAS bo De ced ee 12

Ciampi v. Hannaford Bros. Co., 681 A.2d 4 (Me.

SRNR TA en aac chehienicnscareae ceases passim

District of Columbia v. Greater Washington Bd. of

Sg Se. Crit’ Bee RRO bo ocwe ks bak 0 6 09-4 b 00 40's passim

Ebmer v. Wayne Village, 494 N.W.2d 842 (Mich.

PN BEET powh aoe brent ce UNREAD Beebo a Kou wanes ve s, 8

Fort Halifax Packing Co. v. Coyne, 482 U.S. 1 (1987) ..... 8

Ingersoll-Rand Co. v. McClendon, 498 U.S. 133

Lo) SSR Ya ESE AB RE eLearn ane PEC Or 12

Lawrence Paper Co. v. Gomez, 897 P.2d 134 (Kan.),

cert. denied, U.S. __, 116 S.Ct. 187 (1995) ..10, 11

Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41 (1987) ...... 9

Shaw v. Delta Air Lines, Inc., 463 U.S. 85 (1983)....... 9

Vartanian v. Monsanto Co., 14 F.3d 697 (1st Cir.

Ce MEG pc sk aki s tbe Ge c sak Webs ae neh ewenet 12

STATUTES

ee LS, Gib eas Vales whew Re cok s wwe sexes i

PLA. Se © 25-5116) (1997) oo seve cess Septet aM

ALASKA Stat. §§ 23.30.220, 265(15) (1990)........... i

Coto. Rev. Stat. § 8-70-101 (Supp. 1995)........... 7, 10

iv

TABLE OF AUTHORITIES -— Continued

Page

Employee Retirement Income Security Act of 1974,

Eo Wiha: EE WER na ed aw Wick Rh be ee oh 1

ogee Te Ee ee oe es ae ary tLe 2

BD Wis ANA 8 ENT Cesk ae. Fe ee ees Seulae passim

BP ELDAR RUE 6 0 45) 0a hae 53 Ce fae ane heey enone 12

Fra. Stat. ANN. § 440.02(24) (West Supp. 1993) ....7, 10

Kan. Stat. ANN. § 44-511(a)(2) (1993).............. 7, 10

Maine Workers’ Compensation Act of 1992,

39-A M.R.S.A. §§ 101-909 (Supp. 1996)............. 2

Sas Wc, TOIT i 6b Sev ieenee bees passim

SA NERA Bees xiv hei ob vias iva ce eae vanes 1

Mico. Comp. Laws § 418.371(2) (1985).............. 7, 10

OTHER

2A. Larson, THE LAw oF WorRKMEN’S COMPENSATION

© GO Fars Ce eri sadakscaavind dewdes es ieee 7

PETITION FOR A WRIT OF CERTIORARI

Hannaford Bros. Co. petitions this Court for a writ of

certiorari t~ review a decision of the Supreme Judicial

Court of Maine.

OPINIONS BELOW

The July 26, 1996 decision of the Supreme Judicial

Court of Maine is reported at 681 A.2d 4. (App. 1-11). The

April 19, 1995 decision of the State of Maine Workers’

Compensation Board is not reported. (App. 12-14).

The Supreme Judicial Court of Maine granted Peti-

tioner’s petition for appellate review pursuant to 39-A

M.R.S.A. § 322.

JURISDICTION

The decision of the State of Maine Workers’ Compen-

sation Board was issued on April 19, 1995. The judgment

of the Supreme Judicial Court of Maine determining that

ERISA does not preempt the state statute was entered on

July 26, 1996.

This Court has jurisdiction pursuant to 28 U.S.C.

§ 1257(a).

STATUTORY PROVISIONS INVOLVED

The case involves both the Employee Retirement

Income Security Act of 1974 (“ERISA”), 29 U.S.C.

§§ 1001-1461, and provisions of the Maine Workers’ Com-

pensation Act of 1992 (“MWCA”), 39-A M.R.S.A. |

§§ 101-909 (Supp. 1996).

The relevant provisions of ERISA provide as follows:

29 U.S.C. § 1144. Other laws

(a) Supersedure; effective date

Except as provided in subsection (b) of this sec-

tion, the provisions of this subchapter and sub-

chapter III of this chapter shall supersede any

and all State laws insofar as they may now or

hereafter relate to any employee benefit plan

described in section 1003(a) of this title and not

exempt under section 1003(b) of this title. This

section shall take effect on January 1, 1975.

29 S.C. § 1003

(a) Except as provided in subsection (b) of this

section and in sections 1051, 1081, and 1101 of

this title, this subchapter shall apply to any

employee benefit plan if it is established or

maintained —

(1) by any employer engaged in commerce

or in any industry or activity affecting com-

: merce; or

(2) by any employee organization or orga-

nizations representing employees engaged

in commerce or in any industry or activity

affecting commerce; or

(3) by both.

(b) The provisions of this subchapter shall not

apply to any employee benefit plan if -

nn TR nT w

(3) such plan is maintained solely for the

purpose of complying with applicable

workmen’s compensation laws or unem-

ployment compensation or disability insur-

ance laws... .

The relevant provisions of MWCA provides as fol-

lows:

39-A M.R.S.A. § 102.

As used in this Part, unless the context oth-

erwise indicates, the following terms have the

following meanings.

4. Average weekly wages or average

weekly wages, earnings or salary. The term

“average weekly wages” or “average weekly

wages, earnings or salary” is defined as follows.

A. “Average weekly wages, earnings or

salary” of an injured employee means the

amount that the employee was receiving at

the time of the injury for the hours and days

constituting a regular full working week in

the employment or occupation in which the

employee was engaged when injured. . . .

H. “Average weekly wages, earnings or

salary” does not include any fringe or other

benefits paid by the employer that continue

during the disability. Any fringe or other

benefit paid by the employer that does not

continue during the disability must be

included for purposes of determining an

employee’s average weekly wage to the

extent that the inclusion of the fringe or

other benefit will not result in a weekly

benefit amount that is greater than 2/3 of

the state average weekly wage at the time of

injury.

STATEMENT OF THE CASE

This petition for a writ of certiorari arises from a

judgment of the Supreme Judicial Court of Maine (“Law

Court”) holding that ERISA does not preempt 39-A

M.R.S.A. § 102(4)(H) (“Section 102(4)(H)”), a state statute

requiring employers, under certain circumstances, to

include in the computation of a workers’ compensation

average weekly wage the value of the fringe benefits

afforded the employee via the employer’s ERISA-covered

benefit plan.

The facts of this case are not in dispute and, along

with the procedural history, may be summarized as fol-

lows: Respondent Theresa Ciampi suffered a work related

injury on January 30, 1993 while employed by Petitioner

Hannaford. Respondent sought and received workers’

compensation benefits for her injury. While an active

employee of Petitioner, Respondent received fringe bene-

fits including medical, dental and group life insurances,

as well as pension, 401(k) and profit-sharing plans. These

benefits were discontinued during the period of Respon-

dent’s disability.

Although Respondent's workers’ compensation bene-

fits were set at a level in accordance with her average

weekly wage at the time of her injury, Respondent filed a

petition with the State of Maine Workers’ Compensation

Board (the “Board”) seeking, pursuant to Section

102(4)(H),? to include in her average weekly wage the

value of the fringe benefits that she had been receiving

while an active employee of Petitioner.?

1 39-A M.R.S.A. § 102(4) provides in pertinent part:

4. Average weekly wages or average weekly wages,

earnings or salary. The term “average weekly wages”

or “average weekly wages, earnings or salary” is

defined as follows.

A “Average weekly wages, earnings or salary” of

an injured employee means the amount that the

employee was receiving at the time of the injury for

the hours and days constituting a regular full

working week in the employment or occupation in

which the employee wus engaged when injured. . . .

H. “Average weekly wages, earnings or salary”

does not include any fringe or other benefits paid by

the employer that continue during the disability. Any

fringe or other benefit paid by the employer that does

not continue during the disability must be included

for purposes of deterinining an employee’s average

weekly wage to the extent that the inclusion of the

fringe or other benefit will not result in a weekly

benefit amount that is greater than 2/3 of the state

average weekly wage at the time of injury.

? Pursuant to the provisions of Section 102(4)(H), the

Petitioner, and like employers, are given the “choice” of either

continuing the employee’s fringe benefits while the employee is

inactive, or paying the cash equivalent by increasing the

employee’s average weekly wage. Given that this Court has

Petitioner objected to Respondent’s petition, assert-

ing that Section 1144(a) of ERISA preempted Section

102(4)(H). The Board, however, determined that it was

without jurisdiction to address the preemption issue and,

accordingly, proceeded to consider Respondent's petition

pursuant only to state law. (App. 14). Applying Section

102(4)(H), the Board granted Respondent’s petition, find-

ing that including in her average weekly wage the value

of the fringe benefits would not result in weekly compen-

sation greater than two-thirds of the state average weekly

wage. (Id.).

The Law Court granted Petitioner’s timely appeal

from the decision of the Board. In its judgment affirming

the Board’s decision and rejecting Petitioner’s ERISA pre-

emption argument, the Law Court first noted that “[t]here

is no dispute that Hannaford’s fringe benefit package

qualifies as [an employee benefit plan] for purposes of

ERISA.” Ciampi v. Hannaford Bros. Co., 681 A.2d 4, 7, n.1

(Me. 1996) (App. 4). The Law Court furthermore acknowl-

edged the broad preemption provision of ERISA as well as

this Court’s decision in District of Columbia v. Greater Wash-

ington Bd. of Trade, 506 U.S. 125 (1992), which mandated

that “because health insurance plans are regulated by

ERISA, ‘any state law imposing requirements by reference

to such covered programs must yield to ERISA.’ ” Ciampi,

681 A.2d at 7 (quoting Greater Washington, 506 U.S. at

130-31) (App. 5-6).

already prohibited states from requiring the continuation of

actual benefits, District of Columbia v. Greater Washington Bd. of

Trade, 506 U.S. 125 (1992), the state is limited to requiring only

the latter.

The Law Court nevertheless determined that ERISA

does not preempt Section 102(4)(H), finding, inter alia,

that the statute

has only an indirect impact on ERISA-regulated

benefit plans. . . . Had the [Maine] Legislature

intended to encourage employers to continue

benefits during the course of an employee’s dis-

ability, it would have applied section 102(4)(H)

across the board to all employees, as the District

of Columbia had done with its statute in Greater

Washington, and not merely to those employees

whose weekly benefits are less than two-thirds

of the state average weekly wage on the date of

the injury.

Id. at 8, 9 (App. 6, 10).

In support of this holding, the Law Court cited simi-

lar statutes from other jurisdictions, noting that “Maine is

not alone in permitting the consideration of fringe bene-

fits in an employee’s pre-injury wage.” Id. at 8 (citing

Ata. Cope § 25-5-1(6) (1992); Atasxa Stat. §§ 23.30.220,

265(15) (1990); Coro. Rev. Stat. § 8-70-101 (Supp. 1995);

Fra. Stat. ANN. § 440.02(24) (West Supp. 1993); Kan. Stat.

ANN. § 44-511(a)(2) (1993); MicH. Comp. Laws § 418.371(2)

(1985); Ebmer v. Wayne Village, 494 N.W.2d 842, 844 (Mich.

App. 1992);5 2A. Larson, THE Law or WorKMEN’s COMPEN-

SATION § 60.12(b) (1993)) (App. 8).

7

3 The court in Ebmer v. Wayne Village, supra, did not address

federal preemption of the statute cited by the Law Court in

Ciampi. Rather, the Ebmer court determined only that “the

employer’s social security and unemployment compensation

contributions and the employer’s payments to secure workers’

REASONS FOR GRANTING THE WRIT

The decision below arises out of an effort by the State

of Maine to evade both the holding and import of this

Court’s decision in Greater Washington. The decision rep-

resents a growing trend in this respect, and poses a

present, significant threat to the federally preemptive

scheme that is at the heart of ERISA. By denying the writ,

the Court will add impetus to this trend, thus undercut-

ting the important policies of uniformity, as articulated

by this Court in Greater Washington, that Congress sought

to further in crafting the broad preemptive provisions

within ERISA. The issue is well developed and well

framed on the record in this case, and addresses a subject

matter that directly affects ERISA plan administrators

that do business in any of the multitude of states that

have joined this trend.

I. THE DECISION BELOW POSES A PRESENT AND

GROWING THREAT TO THE FEDERAL REGULA-

TORY UNIFORMITY MANDATED BY CONGRESS.

One of the principle goals of ERISA was the creation

of a uniform regulatory scheme for employee benefit

plans. Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 9

(1987). This scheme “is difficult to achieve . . . if a benefit

plan is subject to differing regulatory requirements in

differing States.” Id.

compensation benefits are not to be included in computing an

injured worker’s average weekly wage. ...” Ebmer, 494 N.W.2d

at 843.

all

To achieve the goal of national uniformity, ERISA

maintains, in 29 U.S.C. § 1144(a), a broad preemption

provision that supersedes any State law that “may now or

hereafter relate to any employee benefit plan” described

in, and not exempted by, ERISA. “The only relevant state

laws, or portions thereof, that survive this pre-emption

provision are those relating to plans that are themselves

exempted from ERISA’s scope.” Alessi v. ..aybestos-Man-

hatten, Inc., 451 U.S. 504, 523, n.20 (1981); see also Shaw v.

Delta Air Lines, Inc., 463 U.S. 85 (1983) (emphasizing that

ERISA’s preemption clause is not limited to “state laws

specifically designed to affect employee benefit plans.”);

Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 46 (1987) (noting

the breadth and importance of ERISA’s preemption provi-

sion as intended by its House and Senate sponsors:

“[T]he ‘reservation to Federal authority the sole power to

regulate the field of employee benefit plans’ [i]s ERISA’s

‘crowning achievement.’ ”) (citing 120 Cong. Rec. 29197

(1974) (statement of Rep. Dent)).

The interplay between ERISA and state workers’

compensation laws is “unusually important,” Greater

Washington, 506 U.S. at 132 (Stevens, J., dissenting), and

provides a frequent threat to the uniformity envisioned

by Congress. In Greater Washington the Court found pre-

empted a District of Columbia law stating that employers

that provide health benefits to their active employees

must provide equivalent benefits to an out of work

employee receiving workers compensation. By that deci-

sion, this Court attempted to draw a firm line protecting

the uniformity of benefit plan regulation in furtherance of

congressional intent.

10

Notwithstanding this guidance, state legislatures per-

sist in attempting to circumvent Greater Washington.

Rather than ordering the payment of ERISA benefits, the

current approach is for the state to order the payment of

the value of ERISA benefits. See, e.g., 39 M.R.S.A.

§ 102(4)(H); Ava. Cope § 25-5-1(6) (1992); ALasKka Stat.

§§ 23.30.220, 265(15) (1990); Coro. Rev. Stat. § 8-70-101

(Supp. 1995); Fra. Stat. ANN. § 440.02(24) (West Supp.

1993); Kan. Stat. ANN. § 44-511(a)(2) (1993); MicH. Comp.

Laws § 418.371(2) (1985). As explained in Part II, belew,

the “value of benefits” approach is in direct conflict with

the principles articulated in Greater Washington, and is

apparently predicated on the belief that this Court did

not mean what it said in Greater Washington. In fact, the

Maine law at issue here is precisely the type of law that

Justice Stevens, in his dissent in Greater Washington, said

was rejected by the majority decision. Id. at 133.

Review by this Court of the present case is necessary

not only because the decision below subverts the princi-

ples articulated in Greater Washington, see Alessi, 451 U.S.

at 525 (“ERISA’s authors clearly meant to preclude the

States from avoiding through form the substance of the

pre-emption provision.”), but more importantly, because

the “value of benefits” approach is acquiring a momen-

tum that poses a present, nationwide threat to the uniform

regulation of ERISA benefits mandated by Congress. Last

year, this Court denied a writ of certiorari from the

decision of the Kansas Supreme Court upholding this

approach. See Lawrence Paper Co. v. Gomez, 897 P.2d 134,

138 (Kan.), cert. denied, __ U.S. __, 116 S.Ct. 187 (1995).

The Maine Law Court in Ciampi has now cited the Kansas

decision to sustain a similar law in Maine. Ciampi, 681

iii

11

A.2d at 9 (App. 11). Last year’s decision to deny certiorari

in Lawrence Paper is thus enhancing the growth of a

significant threat to regulatory uniformity, with long last-

ing ramifications that will not be remedied by a decision

many years in the future.

Allowing this approach to stand and proliferate is

counter to the very notion of uniformity intended by

Congress in this area. Benefit plans (as here) often cover

employees in many states, and require that the employer

make long lasting decisions based on multiple year, actu-

arial calculations.

Finally, as explained below, the decision is so plainly

contrary to the express holding in Greater Washington that

granting the requested writ will not place a disproportio-

nate demand on the Court’s resources.

Il. THE COURT BELOW ERRED ON THE MERITS

By including within its scope “[a]ny fringe or other

benefit paid by the employer,” Section 102(4)(H) plainly

and expressly refers to ERISA-covered benefit plans. This

Court has expressly held that such a reference, by itself,

requires a finding of preemption. Greater Washington, 506

U.S. at 130 (“District’s Equity Amendment Act. . . on that

basis alone is pre-empted.”).

Moreover, Section 102(4)(H) imposes its requirements

by reference to benefit plans covered by ERISA. To wit,

the plan administrator must reference the fringe benefits

that were provided via the ERISA plan to the employee

while active, compute their equivalent cash value, and

increase the inactive employee’s average weekly wage by

12

that amount. See Greater Washington, 506 U.S. at 130

(“Such employer-sponsored health insurance programs

are subject to ERISA regulation . . . and any state law

imposing requirements by reference to such covered pro-

grams must yield to ERISA.”) (footnote omitted); Inger-

soll-Rand Co. v. McClendon, 498 U.S. 133, 136 (1990)

(ERISA preempts claim “premised on” existence of

ERISA-covered plan); Carlo v. Reed Rolled Thread Die Co.,

49 F.3d 790, 793-94 (1st Cir. 1995) (where determination of

damages ultimately depended on analysis of an employee

benefit plan, inquiry was directed to plan and cause of

action was preempted); Vartanian v. Monsanto Co., 14 F.3d

697, 700 (1st Cir. 1994) (cause of action preempted where

determination of employer’s liability depended on exis-

tence of an ERISA-covered plan).

In a real economic sense, the decision below, if

allowed to stand, guts this Court’s decision in Greater

Washington of any meaning. Requiring employers to pay

the value of a benefit is no different than requiring the

furnishing of an equivalent benefit. For example, as per-

mitted by federal law, the Petitioner’s benefit plan

requires COBRA beneficiaries to pay the full cost of their

coverage. See 29 U.S.C. § 1162(3). If the COBRA benefici-

ary is entitled to workers’ compensation, however, Sec-

tion 102(4)(H) effectively precludes the Petitioner from

requiring this employee contribution because if the for-

mer employee remits the full cost of the COBRA coverage

to the Petitioner, the Petitioner must simultaneously pay

to that employee the “value” of the health benefits cover-

age (i.e., the full cost of the COBRA coverage).

Justice Stevens formulated the issue in Greater Wash-

ington as “whether Congress intended to prevent a State

13

from computing workmen’s compensation benefits on the

basis of the entire remuneration of injured employees

when a portion of that remuneration is provided by an

employee benefit plan.” Id. at 133 (Stevens, J., dissenting).

If Justice Stevens was correct in that formulation, then the

issue here presented has been decided and, accordingly,

this case is ripe for summary reversal. If Justice Stevens

was incorrect, and the holding in Greater Washington is to

be interpreted more narrowly, a definitive statement by

the Court is necessary to enable ERISA administrators at

least to plan accordingly in assessing the costs of benefit

plans.

CONCLUSION

The decision of the Supreme Judicial Court of Maine,

interpreting the broad preemption provision within

ERISA in a way that permits the State (and other states

with similar statutes) to require employers to provide in

cash what it cannot require in actual coverage, subverts

congressional intent and is in conflict with the principles

articulated in the precedents of this Court. This petition

14

should be granted to resolve this conflict and to restore

among the states uniform application of ERISA.

Respectfully submitted,

WituiaM J. Kayartta, Jr.,

(Counsel of Record)

Prerce ATwoop

One Monument Square

Portland, Maine 04101

(207) 791-1100

JOHN F. LAMBERT, Jr.

BLack, LAMBERT, COFFIN & RUDMAN

477 Congress St. 14th Floor

P.O. Box 15215

Portland, Maine 04112-5215

(207) 871-7033

App. 1

Theresa CIAMPI

v.

HANNAFORD BROS. CO.

Decision No. 7747.

Law Docket No. WCB-95-276.

Supreme Judicial Court of Maine.

Argued June 13, 1996.

Decided July 26, 1996.

James J. MacAdam (orally), McTeague, Higbee, Mac-

adam, Case, Watson & Cohen, Topsham, for Employee.

John F. Lambert, Jr. (orally) and Thomas W. Laprade,

Black, Lambert, Coffin & Rudman, Portland, for

Employer.

Before WATHEN, C.J., and ROBERTS, GLASSMAN,

RUDMAN and LIPEZ, JJ.

ROBERTS, Justice.

Hannaford Bros. Co. appeals from a decision of the

Workers’ Compensation Board awarding its employee

Theresa Ciampi weekly benefits based on a computation

of her average weekly wage that included fringe benefits

pursuant to 39-A M.R.S.A. § 102(4)(H) (Supp.1995).

Hannaford contends that section 102(4)(H) is preempted

by the Employee Retirement Income Security Act of 1974

(ERISA), 88 Stat. 832 (codified as amended at 29 U.S.C.

§§ 1001-1461 (1990)). We conclude that section 102(4)(H)

does not “relate to” an employee benefit plan within the

meaning of ERISA’s preemption provision, and therefore

we affirm the decision of the Board.

App. 2

The facts of this case are not in dispute. Ciampi

suffered a work-related injury on January 30, 1993, while

employed by Hannaford. Her fringe benefits were discon-

tinued during the period of her disability. Ciampi filed a

petition for an award seeking the inclusion of fringe

benefits, valued at $62.50 per week, in her average

weekly wage. Because the inclusion of the fringe benefits

would not increase her weekly benefits above two-thirds

of the state average weekly wage at the time of her injury,

the Board granted the petition. 39-A M.R.S.A. § 102(4)(H);

Beaulieu v. Maine Medical Ctr., 675 A.2d 110, 111

(Me.1996). Concluding that it lacked jurisdiction to

resolve issues of federal preemption, the Board declined

to address Hannaford’s argument that section 102(4)(H)

is preempted by ERISA. We granted Hannaford’s petition

for appellate review pursuant to 39-A M.R.S.A. § 322

(Supp.1995).

ERISA was enacted in 1974 for the purpose of pro-

tecting the interests of employees and their beneficiaries

in employer-provided benefit plans. The United States

Supreme Court recently stated:

[ERISA] does not go about protecting plan par-

ticipants and their beneficiaries by requiring

employers to provide any given set of minimum

benefits, but instead controls the administration

of benefit plans . . . as by imposing reporting

and disclosure mandates, . . . participation and

vesting requirements, . . . funding stan-

dards, . . . and fiduciary responsibilities for plan

administrators. . . . It envisions administrative

oversight, imposes criminal sanctions, and

establishes a comprehensive civil enforcement

scheme.

App. 3

New York State Conf. of Blue Cross & Blue Shield

Plans v. Travelers Ins. Co., ___ US. __, __, 115 S.Ct.

1671, 1674-75, 131 L.Ed.2d 695 (citations omitted). ERISA

also contains a broad preemption provision for the pur-

pose of insuring uniformity in the laws relating to

employee benefit plans. 29 U.S.C. § 1144(a). As the

Supreme Court has explained:

An employer that makes a commitment system-

atically to pay certain benefits undertakes a host

of obligations, such as determining the eligi-

bility of claimants, calculating benefit levels,

making disbursements, monitoring the avail-

ability of funds for benefit payments, and keep-

ing appropriate records in order to comply with

applicable reporting requirements. The most

efficient way to meet these responsibilities is to

establish a uniform administrative scheme,

which provides a set of standard procedures to

guide processing of claims and disbursement of

benefits. Such a system is difficult to achieve,

however, if a benefit plan is subject to differing

regulatory requirements in differing States. A

plan would be required to keep certain records

in some States but not in others; to make certain

benefits available in some States but not in

others; to process claims in a certain way in

some States but not in others; and to comply

with certain fiduciary standards in some States

but not in others.

Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 9, 107

S.Ct. 2211, 2216, 96 L.Ed.2d 1 (1987). In pertinent part,

section 1144(a) provides that “[e]xcept as provided in

subsection (b) of this section, the provisions of this

title . . . shall supersede any and all State laws insofar as

App. 4

they may now or hereafter relate to any employee benefit

plan described in section 4(a) and not exempt under

section 4(b).” 29 U.S.C. § 1144(a) (emphasis added). Sub-

section 4(b) provides that “[t]he provisions of this title

shall not apply to any employee benefit pian if . . . (3)

such plan is maintained solely for the purpose of comply-

ing with applicable workmen’s compensation laws or

unemployment compensation or disability insurance

laws.” 29 U.S.C. § 1003(b)(3).

Hannaford contends that 39-A M.R.S.A. § 102(4)(H)

“relates to” an ERISA benefit plan-and is therefore pre-

empted by ERISA.! Section 102(4)(H) provides:

H. “Average weekly wages, earnings or salary”

does not include any fringe or other benefits

paid by the employer that continue during the

disability. Any fringe or other benefit paid by

the employer that does not continue during the

disability must be included for purposes of

determining an employee’s average weekly

wage to the extent that the inclusion of the

fringe or other benefit will not result in 2 weekly

benefit amount that is greater than 2/3 of the

state average weekly wage at the time of the

injury.

The test for determining whether state legislation

“relates to” an ERISA benefit plan is whether “in the

1 An “employee benefit plan” is defined as either a

“welfare” or “pension” plan. Welfare plans are defined as

providing medical, disability, death, accident, unemployment,

or related benefits, while pension plans relate generally to

retirement. 29 U.S.C. § 1002(1)-(3). There is no dispute that

Hannaford’s fringe benefit package qualifies as a welfare plan

for purposes of ERISA.

Oe RTT TT

App. 5

normal sense of the phrase, . . . it has a connection with or

reference to such a plan.” Shaw v. Delta Air Lines, Inc.,

463 U.S. 85, 97, 103 S.Ct. 2890, 2900, 77 L.Ed.2d 490 (1983).

Hannaford rests its argument primarily on the Supreme

Court’s recent decision in District of Columbia v. Greater

Washington Bd. of Trade, 506 U.S. 125, 113 S.Ct. 580, 121

L.Ed.2d 513 (1992). Greater Washington dealt with a Dis-

trict of Columbia statute that required employers who

provide health insurance coverage to employees to con-

tinue that coverage during the period that those

employees receive workers’ compensation benefits. Id. at

128, 113 S.Ct. at 582-83. The District of Columbia statute

provided in pertinent part:

(1) Any employer who provides health insur-

ance coverage for an employee shall provide

health insurance coverage equivalent to the

existing health insurance coverage of the

employee while the employee receives or is eli-

gible to receive workers’ compensation benefits

under this act.

(3) The provision of health insurance coverage

shall not exceed 52 weeks and shall be at the

same benefit level that the employee had at the

time the employee received or was eligible to

receive workers’ compensation benefits.

Greater Washington Bd. of Trade v. District of Colum-

bia, 948 F.2d 1317, 1319 (D.C.Cir.1991), aff’d sub. nom.

District of Columbia v. Greater Washington Bd. of Trade,

506 U.S. 125, 113 S.Ct. 580, 121 L.Ed.2d 513. The Supreme

Court stated in Greater Washington that because health

insurance plans are regulated by ERISA, “any state law

App. 6

imposing requirements by reference to such covered pro-

grams must yield to ERISA.” Greater Washington, 506

U.S. at 130-31, 113 S.Ct. at 584. The Court stated further

that the District of Columbia statute “specifically refers to

welfare benefit plans regulated by ERISA and on that

basis alone is pre-empted.” Id. at 130, 113 S.Ct. at 583.

Hannaford contends that, pursuant to Greater Wash-

ington, any express reference to an ERISA plan, regard-

less of the intent of the statute or its actual connection

with an ERISA plan, requires a finding that the law

“relates to” an ERISA plan. Hannaford contends further

that because section 102(4)(H) increases the cost of pro-

viding ERISA benefits, creates administrative burdens in

existing ERISA plans, and subjects employers to conflict-

ing multistate laws, it has a “connection with” ERISA

benefit plans and is therefore superseded by ERISA. FMC

Corp. v. Holliday, 498 U.S. 52, 60, 111 S.Ct. 403, 408-09,

112 L.Ed.2d 356 (1990). We disagree.

Section 102(4)(H) is plainly distinguishable from the

District of Columbia statute at issue in Greater Washing-

ton. That statute compelled employers to provide an

ERISA type benefit for employees receiving workers’

compensation. Section 102(4)(H), by contrast, provides

that the value of an employee fringe benefit plan must be

considered in the calculation of an employee’s average

weekly wage for purposes of determining weekly

workers’ compensation benefits. Unlike the statute at

issue in Greater Washington, section 102(4)(H) has only

an indirect impact on ERISA-regulated benefit plans. In a

recent case the Supreme Court stated, “[a]n indirect eco-

nomic influence . . . does not bind plan administrators to

any particular choice and thus function as a regulation of

i

App. 7

an ERISA plan itself.” New York State Conf. of Blue

Cross, __ U.S. at __, 115 S.Ct. at 1679. Maine employers

are not compelled to provide or continue ERISA-type

benefits to injured employees, nor are they required to

modify their ERISA plans or maintain a separate adminis-

trative structure to comply with the Maine statute. See

Lawrence Paper Co. v. Gomez, 257 Kan. 932, 897 P.2d 134,

143 (1995) (Kansas statute permitting inclusion of fringe

benefits in employee’s average weekly wage is not pre-

empted by ERISA).

ERISA does not preempt state legislation that has a

tenuous, remote, or peripheral’ ” connection to ERISA

benefit plans. Greater Washington, 506 U.S. at 130 n. 1,

113 S.Ct. at 583 n. 1 (quoting Shaw v. Delta Air Lines, Inc.,

463 U.S. at 100, 103 S.Ct. at 2901). In Blue Cross the

Supreme Court stated, “[i]f ‘relate to’ were taken to

extend to the furthest stretch of its indeterminacy, then

for all practical purposes pre-emption would never run

its course, for ‘[rJeally, universally, relations stop

nowhere.’ ” New York State Conf. of Blue Cross, __ U.S.

at ___, 115 S.Ct. at 1677 (quoting H. James, RODERICK

HUDSON xli (New York ed. World’s Classics 1980)).

Moreover, ERISA does not shield plan administrators

from any and all possible economic influences that may

arise from state laws or regulations. Many traditional

areas of state regulation, such as the regulation of work-

place conditions or the formulation of quality standards

for hospital services, can affect the cost of an ERISA plan

but are not superseded by ERISA because they have only

an indirect effect on plan administration. Id. at __, 115

S.Ct. at 1679. The issue, for purposes of preemption, is

whether Congress intended to foreclose the states from

“da

App. 8

exercising regulatory authority in a given area. Id. at ____

115 S.Ct. at 1676. In cases “where federal law is said to

bar state action in fields of traditional state regulation,”

such as workers’ compensation legislation, there is an

“ ‘assumption that the historic police powers of the States

were not to be superseded by the Federal Act unless that

was the clear and manifest intent.’” Id. (quoting Rice v.

Santa Fe Elevator Corp., 331 U.S. 218, 230, 67 S.Ct. 1146,

1152, 91 L.Ed. 1447 (1947)).

Maine is not alone in permitting the consideration of

fringe benefits in an employee’s pre-injury wage.? “[T]he

purpose of calculating an average weekly wage is to

arrive at an estimate of the ‘employee’s future earning

capacity as fairly as possible.’” Nielsen v. Burnham &

Morrill, Inc., 600 A.2d 1111, 1112 (Me.1991) (quoting

Fowler v. First Nat’l Stores, Inc., 416 A.2d 1258, 1260

(Me.1980)). Statutes and judicial decisions that permit

consideration of fringe benefits in the determination of an

employee’s pre-injury wage are premised on the practical

reality that in some circumstances the money received in

an employee’s weekly pay envelope will not accurately

reflect the employee’s actual earning capacity. Ex Parte

Murray, 490 So.2d 1238, 1240-41 (Ala.1986); Ragland v.

Morrison-Knudsen Co., 724 P.2d 519, 522-23 (Alaska

2 See, e.g., ALA.CODE § 25-5-1(6) (1992), ALASKA STAT.

§§ 23.30.220, 265(15) (1990); COLO.REV.STAT. § 8-70-101

(Supp.1995); FLA.STAT.ANN. § 440.02(24) (West Supp.1993);

KAN.STAT.ANN. § 44-511(a)(2) (1993); MICH.COMP.LAWS

§ 418.371(2) (1985); Ebmer v. Wayne Village, 197 Mich.App. 307,

494 N.W.2d 842, 844 (1992); 2 A. Larson, THE LAW OF

WORKMEN’S COMPENSATION § 60.12(b) (1993).

App. 9

1986); Murphy v. Ampex Corp., 703 P.2d 632, 633-34

(Colo.App.1985).

We are not persuaded that Congress, by its enactment

of ERISA, intended to supersede state authority to calcu-

late weekly workers’ compensation benefits based on a

fair estimate of an employee's earning capacity by includ-

ing an employee’s fringe benefits. Our conclusion is but-

tressed by Congress’s express exemption of plans

maintained solely for the purpose of complying with

applicable state workers’ compensation laws from the

ERISA preemption provision. 29 U.S.C. §§ 1003(b)(3),

1144(a). Our result is also supported by decisions of the

federal courts that states are not precluded from referring

to ERISA benefits to calculate benefits for otherwise per-

missible purposes within the states’ traditional authority.

See, e.g., Thiokol Corp., Morton Int’l, Inc. v. Roberts, 76

F.3d 751, 755 (6th Cir.1996) (ERISA does not preempt

Michigan tax based in part on employer payments to

fringe benefit plans); Keystone Chapter, Associated

Builders & Contractors v. Foley, 37 F.3d 945, 963 (3d

Cir.1994), cert. denied, ___ ;U.S. __,, 115 S.Ct. 1393, 131

L.Ed.2d 244 (1995) (ERISA does not preempt statute

requiring public contractors to pay prevailing minimum

wage calculated with reference to employer contributions

to fringe benefit plans).

We reject Hannaford’s argument that by excluding

from the average weekly wage those fringe benefits that

“continue during the disability” the Legislature intended

a direct impact on ERISA plans by encouraging

employers to continue fringe benefits during the course

of an employee’s disability. The legislative record is

devoid of any reference to such an intent, and we do not

App. 10

find any evidence of that intent in the plain statutory

language. Had the Legislature intended to encourage

employers to continue benefits during the course of an

employee’s disability, it would have applied section

102(4)(H) across the board to all employees, as the Dis-

trict of Columbia had done with its statute in Greater

Washington, and not merely to those employees whose

weekly benefits are less than two-thirds of the state aver-

age weekly wage on the date of the injury.

We are not unmindful of the legislative history of this

issue following our 1989 decision in Ashby v. Rust Eng’g

Co., 559 A.2d 774, 775 (Me.1989), in which we held that

certain payments must be included in the average weekly

wage when employee benefits are paid for by bargained-

for, dollar-for-dollar deductions from an employee’s pay. :

Clark v. Rust Eng’g Co., 595 A.2d 416, 419 (Me.1991). See

also Fletcher v. Hanington Bros., Inc., 647 A.2d 800, 803

(Me.1994) (employee’s voluntary deductions from weekly

pay for health insurance must be included in average

weekly wage). The Legislature’s immediate response to

Ashby was the enactment of P.L.1991, ch. 615, § A-20;

which purported to overturn that decision and provided

that fringe benefits may not be included in an employee’s

average weekly wage. 39 M.R.S.A. § 2(2)(G) (Supp.1991),

repealed and replaced by Maine Workers’ Compensation

Act of 1992, P.L.1991, ch. 885, §§ A-7, A-8 (effective Janu-

ary 1, 1993); Tompkins v. Wade & Searway Constr. Corp.,

612 A.2d 874, 876 (Me.1992). In light of this recent history,

it is likely that the Legislature intended section 102(4)(H)

to strike a balance between the Ashby rule and the rule of

former section 2(2)(G) by providing a slightly greater

a a

App. 11

recovery to those employees with the lowest weekly ben-

efits.

We conclude that section 102(4)(H) has only a “ten-

uous, remote, or peripheral” connection with benefit

plans and is therefore not preempted by ERISA. Greater

Washington, 506 U.S. at 130 n. 1, 113 S.Ct. at 583 n. 1

(quoting Shaw v. Delta Air Lines, Inc., 463 U.S. at 100, 103

S.Ct. at 2901). Moreover, our decision is in accord with a

recent opinion of the Supreme Court of Kansas address-

ing a Kansas statute similar in all key respects to Maine’s

section 102(4)(H). Lawrence Paper, 897 P.2d at 143.

The entry is:

Decision of the Workers’ Compensation Board

affirmed.

All concurring.

681 A.2d 4

App. 12

STATE OF MAINE

WORKERS’ COMPENSATION BOARD

62 ELM STREET

PORTLAND, MAINE 04101

James MacAdam, Esq. John Lambert, Jr., Esq.

MCTEAGUE, HIGBEE, BLACK, LAMBERT,

LIBNER COFFIN

PO Box 5000 PO Box 15215

Topsham, Maine 04086 Portland, Maine 04101

WCB#: 93001313 DATED MAILED:

APR 19 1995

Within 5 days after issuing this decision, the hearing

officer may request that the full Workers’ Compensation

Board review the decision.

39-A M.R.S.A. §322(1) provides that any party in

interest may present a copy of this decision to the clerk of

the Law Court within 20 days after receipt of the notice of

the filing of this decision.

THERESA CIAMPI

(Employee)

VS.

HANNAFORD BROTHERS COMPANY

(Employer)

and

HANNAFORD BROTHERS COMPANY

(Insurer)

a

App. 13

Pending before the Board is the employee’s Petition

for Award. The parties have agreed that the only unre-

solved issue is the amount of the employee’s average

weekly wage which raises issues of what constitute fringe

benefits under §102(H) and whether that whole section is

pre-empted by ERISA, 29 USC §1001 et seq., a question

this hearing officer is without the jurisdiction to decide.

FINDINGS OF FACT

1. On January 30, 1993 when Theresa Ciampi suf-

fered a compensable injury at Hannaford Brothers her

average weekly wage, without fringe benefits, was

$389.30. Hannaford Brothers also made contributions for

Ms. Ciampi to the following: Social Security, Medical,

Dental, Disability, and Group Life Insurance, a retirement

plan and a 401(k) plan.

2. The value of those benefits except for the 401(k)

plan and the employer’s payments to social security,

which the employee seeks as a fringe benefit, amounts to

$62.54 per week; the value of the 401(k) plan is not

known.

3. The employers’ payments for fringe benefits did

not continue during the period of her disability; the

inclusion of these fringe benefits in her average weekly

wage would not result in that weekly benefit amount

being greater than two-thirds of the state average weekly

wage at the time of her injury.

App. 14

CONCLUSIONS OF LAW

1. The employer’s payments to social security are

not a fringe benefit; they are a tax which both the

employer and the employee must pay to the Federal

Government as long as the employee is working.

2. Asa tribunal of limited jurisdiction, the Workers’

Compensation Board cannot itself declare whether or not

§102(H) of the present Act is pre-empted by ERISA. This

general proposition of law is codified in §152(5) which

provides that this Hearing Officer may, “take action and

enter orders consistent with this Act...” This Hearing

Officer could not address the question of presumption

without exceeding those powers.

3. Ms. Ciampi’s fringe benefits fall within Tit. 39-A

§102(4)(H) they therefore must be included in her average

weekly wage.

WHEREFORE, the employee’s Petition for Award is

granted, the average weekly wage is established as

$451.84 plus the value of the 401(k) plan.

SO ORDERED.

Dated: April 19, 1995

Portland, Maine

WORKERS’ COMPENSATION BOARD

/s/ John McCur

JOHN MCCURRY, HEARING OFFICER

A true copy ATTEST

/s/ John J. Jolicoeur

WCB CLERK