A proposed Maryland law that attempts to pressure Wal-Mart to provide better health care benefits for its employees would violate federal law, the Maryland Chamber of Commerce said.
The business group issued a report just days before the start of the 2006 General Assembly session, when the legislature will take up bills from last year’s session that were vetoed by Gov. Robert Ehrlich, including the bill that many say was aimed specifically at Wal-Mart.
“We think this new information offers a compelling reason to sustain the governor’s veto,” Ronald W. Wineholt, the chamber’s vice president for government affairs, said. “The Supreme Court made it clear that this law would not withstand a court challenge.”
But supporters of the law maintain it is valid and say the Chamber of Commerce is just trying to thwart their efforts to override the veto.
“This seems like a thinly veiled, half-baked, 11th-hour attempt to prevent an override that a majority of the Maryland public supports,” said Tom Hucker, executive director of Progressive Maryland, a liberal lobbying group that is in the forefront of the battle to override the veto.
“Everyone knows you can hire a lawyer to say anything,” Hucker said. “It really doesn’t matter what a lawyer hired by the Chamber of Commerce thinks. It matters what the judges think.”
Assistant Attorney General Robert Zarnoch, the legislature’s chief legal adviser, said his office is now looking at the point raised by the chamber, that the Maryland law is pre-empted by the federal Employee Retirement Income Security Act, known as ERISA.
“Presently, our first inclination is that it is not pre-empted by ERISA,” Zarnoch said.
The bill, which was passed by the legislature over the objections of Ehrlich and Republican lawmakers, would require any company with more than 10,000 workers in Maryland to spend at least 8 percent of its payroll on health benefits or pay the difference into the state Medicaid program. Wal-Mart is the only company that meets the criteria at this time.
Henry A. Smith, who advised the chamber that the Wal-Mart bill would violate federal law regulating employee benefits, is a Baltimore-based lawyer with a practice focused on employee benefits, executive compensation and labor and employment law.
Smith said there have not been any rulings on a law identical to Maryland’s, but that in what he called “a very close case,” a federal court overturned a District of Columbia law dealing with employee benefits, saying state laws were pre-empted by the federal Employee Retirement Income Security Act.
“Any state attempt to regulate an employee benefit plan is pre-empted by the federal employee benefit law because of the Congress’ belief that a single federal regulatory scheme for employee benefits is preferable to 51 separate, varying state schemes,” Smith said.
Vincent DeMarco, president of Maryland Health Care for All, a coalition of organizations supporting the bill, said his organization is confident, based on advice from experts who have reviewed the legislation, that it will pass legal muster.
Democratic legislative leaders are working to line up the three-fifths vote in the House and Senate that are needed to override the veto. Vetoes are on the agenda for opening day, but votes are likely to be postponed at least until Thursday or Friday.
“We are cautiously optimistic that this (a veto override) is going to happen,” DeMarco said.
Wal-Mart Stores Inc. is opposed to the law and has hired some of the state’s top lobbyists to try to uphold the governor’s veto.
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