Feb 22, 2008

Supreme Court Won't Stand in the Way of San Francisco's "Fair Play" Ordinance

In 2006, San Francisco's Board of Supervisors passed an ordinance with an arguably noble purpose: Ensuring that most workers in the city have health insurance. The San Francisco Health Care Security Ordinance required most employers within the city to make minimum health care contributions on behalf of their employees.

The plan was met with some opposition. The Golden Gate Restaurant Association ("GGRA") argued successfully before a U.S. District Court that the plan is preempted by the federal Employee Income Security Act of 1974 ("ERISA"), which specifically limits states' ability to enact laws that "relate to" private-sector employee benefit plans . This week, Supreme Court Justice Anthony Kennedy denied a motion by the Golden Gate Restaurant Association to vacate an emergency stay of the district court's judgment granted by the Ninth Circuit Court of Appeals. In effect, this means the ordinance goes into effect until it is given full review by the Ninth Circuit.

As a hot topic in the close race for the Democratic presidential nomination, health care is likely to stay at the forefront of our minds. And the issue of "pay or play" or "fair share" programs, either by state or local bodies, is its own animal. In 2006, a similar Maryland law (dubbed the "Wal-Mart Bill" because Wal-Mart was the only employer affected) was struck down for violating ERISA. Similar bills have popped up in states around the country, sometimes with similar result. How the San Francisco ordinance will fare remains to be seen.

Alayna Schroeder