JUSTICE BRENNAN delivered the opinion of the Court.
In this case we must decide whether a Maine statute requiring employers to provide a one-time severance payment to employees in the event of a plant closing, Me. Rev. Stat.
In 1972, Fort Halifax Packing Company (Fort Halifax or Company) purchased a poultry packaging and processing plant that had operated in Winslow, Maine, for almost two decades. The Company continued to operate the plant for almost another decade, until, on May 23, 1981, it discontinued operations at the plant and laid off all its employees except several maintenance and clerical workers. At the time
On October 30, 1981, 11 employees filed suit in Superior Court seeking severance pay pursuant to Me. Rev. Stat. Ann., Tit. 26, § 625-B (Supp. 1986-1987). This statute, which is set forth in n. 1, supra, provides that any employer that terminates operations at a plant with 100 or more employees, or relocates those operations more than 100 miles away, must provide one week's pay for each year of employment to all employees who have worked in the plant at least three years. The employer has no such liability if the employee accepts employment at the new location, or if the employee is covered by a contract that deals with the issue of severance pay. §§ 625-B(2), (3). Under authority granted by the statute, the Maine Director of the Bureau of Labor Standards also commenced an action to enforce the provisions of the state law, which action superseded the suit filed by the employees.
We hold that the Maine statute is not pre-empted by ERISA, not for the reason offered by the Maine Supreme Judicial Court, but because the statute neither establishes, nor requires an employer to maintain, an employee welfare benefit "plan" under that federal statute.
Appellant's basic argument is that any state law pertaining to a type of employee benefit listed in ERISA necessarily regulates an employee benefit plan, and therefore must be pre-empted. Because severance benefits are included in ERISA, see 29 U. S. C. § 1002(1)(B), appellant argues that ERISA pre-empts the Maine statute.
The first answer to appellant's argument is found in the express language of the statute. ERISA's pre-emption provision does not refer to state laws relating to "employee benefits," but to state laws relating to "employee benefit plans":
We have held that the words "relate to" should be construed expansively: "[a] law `relates to' an employee benefit plan, in the normal sense of the phrase, if it has a connection with or reference to such a plan." Shaw v. Delta Airlines, Inc., 463 U.S. 85, 96-97 (1983). Nothing in our case law, however, supports appellant's position that the word "plan" should in effect be read out of the statute. Indeed, Shaw itself speaks of a state law's connection with or reference to a plan. Ibid. The words "benefit" and "plan" are used separately throughout ERISA, and nowhere in the statute are they treated as the equivalent of one another. Given the basic difference between a "benefit" and a "plan," Congress' choice of language is significant in its pre-emption of only the latter.
Thus, as a first matter, the language of the ERISA presents a formidable obstacle to appellant's argument. The reason for Congress' decision to legislate with respect to plans rather than to benefits becomes plain upon examination of the purpose of both the pre-emption section and the regulatory scheme as a whole.
The second answer to appellant's argument is that preemption of the Maine statute would not further the purpose of ERISA pre-emption. In analyzing whether ERISA's preemption section is applicable to the Maine law, "as in any preemption analysis, `the purpose of Congress is the ultimate touchstone.' " Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724, 747 (1985) (quoting Malone v. White Motor Corp., 435 U.S. 497, 504 (1978)). Attention to purpose is particularly necessary in this case because the terms "employee benefit plan" and "plan" are defined only tautologically in the statute, each being described as "an employee welfare
Statements by ERISA's sponsors in the House and Senate clearly disclose the problem that the pre-emption provision was intended to address. In the House, Representative Dent stated that "with the preemption of the field [of employee benefit plans], we round out the protection afforded participants by eliminating the threat of conflicting and inconsistent State and local regulation." 120 Cong. Rec. 29197 (1974). Similarly, Senator Williams declared: "It should be stressed that with the narrow exceptions specified in the bill, the substantive and enforcement provisions of the conference substitute are intended to preempt the field for Federal regulations, thus eliminating the threat of conflicting or inconsistent State and local regulation of employee benefit plans." Id., at 29933.
These statements reflect recognition of the administrative realities of employee benefit plans. An employer that makes a commitment systematically to pay certain benefits undertakes a host of obligations, such as determining the eligibility of claimants, calculating benefit levels, making disbursements, monitoring the availability of funds for benefit payments, and keeping 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.
This point was emphasized in Shaw, supra, where we said with respect to another form of State regulation: "Obligating the employer to satisfy the varied and perhaps conflicting requirements of particular state fair employment laws. . . would make administration of a nationwide plan more difficult." 463 U. S., at 105, n. 25. Such a situation would produce considerable inefficiencies, which the employer might choose to offset by lowering benefit levels. As the Court in Shaw indicated, "ERISA's comprehensive pre-emption of state law was meant to minimize this sort of interference with the administration of employee benefit plans," ibid., so that employers would not have to "administer their plans differently in each State in which they have employees." Id., at 105 (footnote omitted).
This concern about the effect of state regulation on the administration of benefit programs is reflected in Shaw's holding that only disability programs administered separately from other benefit plans fall within ERISA's pre-emption exemption for plans maintained "for the purpose of complying with . . . disability insurance laws." 29 U. S. C. § 1003(b)(3).
It is thus clear that ERISA's pre-emption provision was prompted by recognition that employers establishing and maintaining employee benefit plans are faced with the task of coordinating complex administrative activities. A patchwork scheme of regulation would introduce considerable inefficiencies in benefit program operation, which might lead those employers with existing plans to reduce benefits, and those without such plans to refrain from adopting them. Pre-emption ensures that the administrative practices of a benefit plan will be governed by only a single set of regulations. See, e. g., H. R. Rep. No. 93-533, p. 12 (1973) ("[A] fiduciary standard embodied in Federal legislation is considered desirable because it will bring a measure of uniformity in an area where decisions under the same set of facts may differ from state to state").
The purposes of ERISA's pre-emption provision make clear that the Maine statute in no way raises the types of concerns that prompted pre-emption. Congress intended pre-emption to afford employers the advantages of a uniform set of administrative procedures governed by a single set of regulations. This concern only arises, however, with respect to benefits whose provision by nature requires an ongoing administrative program to meet the employer's obligation. It is for this reason that Congress pre-empted state laws relating to plans, rather than simply to benefits. Only a plan embodies a set of
The Maine statute neither establishes, nor requires an employer to maintain, an employee benefit plan. The requirement of a one-time, lump-sum payment triggered by a single event requires no administrative scheme whatsoever to meet the employer's obligation. The employer assumes no responsibility to pay benefits on a regular basis, and thus faces no periodic demands on its assets that create a need for financial coordination and control. Rather, the employer's obligation is predicated on the occurrence of a single contingency that may never materialize. The employer may well never have to pay the severance benefits. To the extent that the obligation to do so arises, satisfaction of that duty involves only making a single set of payments to employees at the time the plant closes. To do little more than write a check hardly constitutes the operation of a benefit plan.
This point is underscored by comparing the consequences of the Maine statute with those produced by a state statute requiring the establishment of a benefit plan. In Standard Oil Co. of California v. Agsalud, 633 F.2d 760 (CA9 1980), summarily aff'd 454 U.S. 801 (1981), for instance, Hawaii had required that employers provide employees with a comprehensive health care plan. The Hawaii law was struck
The Maine statute therefore creates no impediment to an employer's adoption of a uniform benefit administration scheme. Neither the possibility of a one-time payment in the future, nor the act of making such a payment, in any way creates the potential for the type of conflicting regulation of benefit plans that ERISA pre-emption was intended to prevent.
The third answer to appellant's argument is that the Maine statute not only fails to implicate the concerns of ERISA's pre-emption provision, it fails to implicate the regulatory concerns of ERISA itself. The congressional declaration of policy, codified at 29 U. S. C. § 1001, states that ERISA was enacted because Congress found it desirable that "disclosure be made and safeguards be provided with respect to the establishment, operation, and administration of [employee benefit] plans." § 1001(a). Representative Dent, the House sponsor of the legislation, represented that ERISA's fiduciary standards "will prevent abuses of the special responsibilities borne by those dealing with plans." 120 Cong. Rec. 29197 (1974). Senator Williams, the Senate sponsor, stated that these standards would safeguard employees from "such abuses as self-dealing, imprudent investing, and misappropriation of plan funds." Id., at 29932. The focus of the statute thus is on the administrative integrity of benefit plans — which presumes that some type of administrative activity is taking place. See, e. g., H. R. Rep. No. 94-1785, p. 46 (1977) ("In electing deliberately to preclude state authority over these plans, Congress acted to insure uniformity of regulation with respect to their activities") (emphasis added); 120 Cong. Rec. 29197 (1974) (remarks of Rep. Dent) (disclosure and reporting requirements "will enable both participants and the Federal Government to monitor the plans' operations") (emphasis added); id., at 29935 (remarks of Sen. Javits) (disclosure
The foregoing makes clear both why ERISA is concerned with regulating benefit "plans" and why the Maine statute does not establish one. Only "plans" involve administrative activity potentially subject to employer abuse. The obligation imposed by Maine generates no such activity. There is no occasion to determine whether a "plan" is "operated" in the interest of its beneficiaries, because nothing is "operated." No financial transactions take place that would be listed in an annual report, and no further information regarding the terms of the severance pay obligation is needed because the statute itself makes these terms clear. It would make no sense for pre-emption to clear the way for exclusive federal regulation, for there would be nothing to regulate. Under such circumstances, pre-emption would in no way serve the overall purpose of ERISA.
Appellant contends that failure to pre-empt the Maine law will create the opportunity for employers to circumvent ERISA's regulatory requirements by persuading a State to require the type of benefit plan that the employer otherwise would establish on its own. That may be so under the rationale offered by the State Supreme Judicial Court, but that is not the rationale on which we rely today.
The Maine Supreme Judicial Court rested its decision on the premise that ERISA only pre-empts state regulation of pre-existing benefit plans established by the employer, and not state-mandated benefit plans. We agree that such an approach would afford employers a readily available means of evading ERISA's regulatory scope, thereby depriving employees of the protections of that statute. In addition, it would permit States to circumvent ERISA's pre-emption provision, by allowing them to require directly what they are forbidden to regulate. In contrast, our analysis of the purpose
Appellant's arguments are thus well taken insofar as they are addressed to the reasoning of the court below. We have demonstrated, supra, however, they have no force with respect to a state statute that, as here, does not establish a plan. Such a statute generates no program activity that normally would be subject to ERISA regulation. Enforcement of the Maine statute presents no risk either that an employer will evade or that a State will dislodge otherwise applicable federal regulatory requirements. Nor is there any prospect that an employer will face difficulty in operating a unified administrative scheme for paying benefits. The rationale on which we rely thus does not create the dangers that appellant contends will result from upholding the Maine law.
Appellant also argues that its contention that the severance obligation under the Maine statute is an ERISA plan is supported by Holland v. Burlington Industries, Inc., 772 F.2d 1140 (CA4 1985), summarily aff'd, 477 U.S. 901 (1986), and Gilbert v. Burlington Industries, Inc., 765 F.2d 320 (CA2 1985), summarily aff'd, 477 U.S. 901 (1986). We disagree. Those cases hold that a plan that pays severance benefits out of general assets is an ERISA plan. That holding is completely consistent with our analysis above. There was no question in the Burlington cases, as there is in this
The courts' conclusion that they should be so regarded took into account ERISA's central focus on administrative integrity: if an employer has an administrative scheme for paying benefits, it should not be able to evade the requirements of the statute merely by paying those benefits out of general assets. Some severence benefit obligations by their nature necessitate an ongoing administrative scheme, but others do not. Those that do not, such as the obligation imposed in this case, simply do not involve a state law that "relate[s] to" an employee benefit "plan." 29 U. S. C. § 1144(a).
ERISA pre-emption analysis "must be guided by respect for the separate spheres of governmental authority preserved in our federalist system." Alessi v. Raybestos-Manhattan, Inc., 451 U. S., at 522. The argument that ERISA pre-empts state laws relating to certain employee benefits, rather than to employee benefit plans, is refuted by the express language of the statute, the purposes of the pre-emption provision, and the regulatory focus of ERISA as a whole. If a State creates no prospect of conflict with a federal statute, there is no warrant for disabling it from attempting to address uniquely local social and economic problems.
Appellant also contends that Maine's statute is pre-empted by the NLRA. In so arguing, the Company relies on the strand of NLRA pre-emption analysis that prohibits States from "imposing additional restrictions on economic weapons of self-help." Golden State Transit Corp. v. City of Los Angeles, 475 U.S. 608, 614 (1986).
Appellant concedes that, unlike cases in which state laws have been struck down under this doctrine, Maine has not directly regulated any economic activity of either of the parties. See, e. g., Machinists, supra (State enjoined union members from continuing to refuse to work overtime); Garner v. Teamsters, 346 U.S. 485 (1953) (State enjoined union picketing). Nor has the State sought directly to force a party to forgo the use of one of its economic weapons. See, e. g., Golden State Transit, supra (City Council conditioned taxicab franchise renewal on settlement of strike). Nonetheless, appellant maintains that the Maine law intrudes on the bargaining activities of the parties because the prospect of a statutory obligation undercuts an employer's ability to withstand a union's demand for severance pay.
This argument — that a State's establishment of minimum substantive labor standards undercuts collective bargaining — was considered and rejected in Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724 (1985). That case involved a state law requiring that minimum mental health benefits be provided under certain health insurance policies. Appellants there presented the same argument that appellant makes in this case: "[B]ecause Congress intended to leave the choice of terms in collective-bargaining agreements to the free play of economic forces, . . . mandated-benefit laws should be pre-empted by the NLRA." Id., at 748. The Court held, however, that the NLRA is concerned with ensuring an equitable bargaining process, not with the substantive terms that may emerge from such bargaining. "The evil Congress was addressing thus was entirely unrelated to local or federal regulation establishing minimum terms of employment." Id., at 754. Such regulation provides protections
Appellant maintains that this case is distinguishable from Metropolitan Life. It points out that, unlike Metropolitan Life, the statutory obligation at issue here is optional, since it applies only in the absence of an agreement between employer and employees. Therefore, the Company argues, the Maine law cannot be regarded as establishing a genuine minimum labor standard. The fact that the parties are free to devise their own severance pay arrangements, however, strengthens the case that the statute works no intrusion on collective bargaining. Maine has sought to balance the desirability of a particular substantive labor standard against the right of self-determination regarding the terms and conditions of employment. If a statute that permits no collective bargaining on a subject escapes NLRA pre-emption, see Metropolitan Life, surely one that permits such bargaining cannot be pre-empted.
We therefore find that Maine's severance payment law is "a valid and unexceptional exercise of the [State's] police power." Metropolitan Life, 471 U. S., at 758. Since "Congress developed the framework for self-organization and collective bargaining of the NLRA within the larger body of state law promoting public health and safety," id., at 756, the Maine statute is not pre-empted by the NLRA.
We hold that the Maine severance pay statute is not pre-empted by ERISA, since it does not "relate to any employee benefit plan" under that statute. 29 U. S. C. § 1144(a). We hold further that the law is not pre-empted by the NLRA, since its establishment of a minimum labor standard does not impermissibly intrude upon the collective-bargaining process. The judgment of the Maine Supreme Judicial Court is therefore
JUSTICE WHITE, with whom THE CHIEF JUSTICE, JUSTICE O'CONNOR, and JUSTICE SCALIA join, dissenting.
The Court rejects appellant's pre-emption challenge to Maine's severance pay statute by reasoning that the statute does not create a "plan" under ERISA because it does not require an "administrative scheme" to administer the payment of severance benefits. By making pre-emption turn on the existence of an "administrative scheme," the Court creates a loophole in ERISA's pre-emption statute, 29 U. S. C. § 1144, which will undermine Congress' decision to make employee-benefit plans a matter of exclusive federal regulation. The Court's rule requiring an established "administrative scheme" as a prerequisite for ERISA pre-emption will allow States to effectively dictate a wide array of employee benefits that must be provided by employers by simply characterizing them as non-"administrative." The Court has also chosen to ignore completely what precedent exists as to what constitutes a "plan" under ERISA. I dissent because it is incredible to believe that Congress intended that the broad preemption provision contained in ERISA would depend upon the extent to which an employer exercised administrative foresight in preparing for the eventual payment of employee benefits.
First, § 1002(1) establishes no requirement that a "plan" meet any specific formalities or that there be some policy manual or employee handbook to effectuate it. Cf. ante, at 14-15, n. 9. In reading such a requirement into § 1002(1), the majority ignores the obvious: when a Maine employer is called upon to discharge its legislatively mandated duty under the severance pay statute, the funds from which it pays the benefits do not materialize out of thin air. The Maine Legislature has presumed, as it is so entitled, that employers will comply with the dictates of the statute's requirements. That an employer's liability is contingent upon an
Second, in concluding that Maine's statute does not establish a "plan" as contemplated by ERISA, the Court overrules, sub silentio, recent decisions of this Court. Gilbert v. Burlington Industries, Inc., supra, involved an employer's policy to pay severance benefits to employees who were involuntarily terminated. The employer had no separate fund from which to make severance pay payments, and, of particular note, there was virtually no "administrative scheme" to effectuate the program: "The granting or denial of severance pay was automatic upon termination. Plaintiffs [employees] allege that Burlington never sought to comply with ERISA respecting its severance pay policy. That is, they claim that: it never published or filed an annual report, a financial statement, a plan description or a statement of plan modifications; it did not designate a fiduciary for the plan or inform employees of their rights under ERISA and the plan; there was no established claims procedure; and, apart from the company's `open door' grievance policy, there was no established appeals procedure." Gilbert, 765 F. 2d, at 323. The employees and numerous amici claimed that "a promise or agreement to pay severance benefits, without more, does not constitute a welfare benefit plan within the meaning of ERISA." Id., at 324. The Second Circuit rejected this contention, id., at 325, and we summarily affirmed, 477 U.S. 901 (1986). See
The Court characterizes Standard Oil Co. of California v. Agsalud, 633 F.2d 760, 766 (CA9 1980), summarily aff'd, 454 U.S. 801 (1981), as holding that ERISA pre-empted Hawaii's health care statute because it impaired employers' ability to "structur[e] [their] administrative practices according to a set of uniform guidelines." Ante, at 13. But that case involved more than administrative uniformity. Indeed, in Agsalud, the Ninth Circuit expressly rejected the argument that ERISA was concerned only with the administration of benefit plans, not state statutes which require employers to provide particular employee benefits: "Appellants in the district court argued that since ERISA was concerned primarily with the administration of benefit plans, its provisions were not intended to prevent the operation of laws like the Hawaii Act pertaining principally to benefits rather than administration. There is, however, nothing in the statute to support such a distinction between the state laws relating to benefits as opposed to administration." 633 F. 2d, at 765. The Ninth Circuit held that the Hawaii Act "directly and expressly regulates employers and the type of benefits they provide employees. It must `relate to' employee benefit plans within the meaning of ERISA's broad pre-emption provision. . . ." Id., at 766. Representatives of the State of Hawaii appealed to this Court, No. 80-1841, claiming, inter alia, that the State's police power permits it to require employers to provide certain employee benefits, and that Hawaii's statute "in no way conflicts with any substantive provision in ERISA, since that statute requires no benefits at all." Juris. Statement, O. T. 1981, No. 80-1841, p. 7. We disagreed and summarily affirmed. 454 U.S. 801 (1981).
The Court's "administrative-scheme" rationale provides States with a means of circumventing congressional intent, clearly expressed in § 1144, to pre-empt all state laws that relate to employee benefit plans. For that reason, I dissent.
"2. Severance pay. Any employer who relocates or terminates a covered establishment shall be liable to his employees for severance pay at the rate of one week's pay for each year of employment by the employee in that establishment. The severance pay to eligible employees shall be in addition to any final wage payment to the employee and shall be paid within one regular pay period after the employee's last full day of work, notwithstanding any other provisions of law.
"3. Mitigation of severance pay liability. There shall be no liability for severance pay to an eligible employee if:
"A. Relocation or termination of a covered establishment is necessitated by a physical calamity;
"B. The employee is covered by an express contract providing for severance pay;
"C. That employee accepts employment at the new location; or
"D. That employee has been employed by the employer for less than 3 years."
Section 625-B(1)(A) defines "covered establishment" as a facility that employs 100 or more persons, while § 625-B(1)(F) defines "relocation" as the removal of all or substantially all operations at least 100 miles away from their original location.
"5. Suits by the director. The director is authorized to supervise the payment of the unpaid severance pay owing to any employee under this section. The director may bring an action in any court of competent jurisdiction to recover the amount of any unpaid severance pay. The right provided by subsection 4 to bring an action by or on behalf of any employee, and of any employee to become a party plaintiff to any such action, shall terminate upon the filing of a complaint by the director in an action under this subsection, unless the action is dismissed without prejudice by the director. . . ."