Narrative Opinion Summary
In this case, the Director of Labor and Industrial Relations for Hawaii and the Air Line Pilots Association, International, challenged a summary judgment from the U.S. District Court for Hawaii in favor of Aloha Airlines, Inc. Aloha sought and obtained a declaratory judgment that Hawaii's Payment of Wages Law, specifically H.R.S. Sec. 388-6(6), is preempted by the Employee Retirement Income Security Act of 1974 (ERISA). The Ninth Circuit Court of Appeals affirmed the district court's decision, holding that the state law related to ERISA plans and was not exempt as a generally applicable criminal law. The court found that FAA-mandated medical examinations constitute 'medical benefits' under ERISA, implicating the management of benefit plans. The ruling emphasized that the statute imposed significant regulatory burdens on ERISA plans, such as requiring modifications or new plans to cover these medical examinations, which are essential to pilots' employment. The judgment clarified that H.R.S. Sec. 388-6(6) was directly connected to ERISA plans and, therefore, preempted, reinforcing ERISA's broad preemption clause intended to protect the uniform administration of employee benefit plans.
Legal Issues Addressed
Definition of 'Medical Benefits' under ERISAsubscribe to see similar legal issues
Application: The court found that FAA-mandated medical examinations qualify as 'medical benefits' under ERISA because they are intrinsically related to employee health and safety, impacting the management of benefit plans.
Reasoning: Consequently, it is determined that FAA-mandated medical examinations qualify as 'medical benefits' under ERISA.
ERISA Preemption of State Lawssubscribe to see similar legal issues
Application: The court held that Hawaii's Payment of Wages Law is preempted by ERISA as it relates to Aloha Airlines' employee benefit plans, requiring modifications or new plans for FAA-mandated medical examinations.
Reasoning: H.R.S. Sec. 388-6(6) is determined to 'relate to' an ERISA plan as it governs the relationships and obligations between Aloha and its pilot employees as well as between Aloha and its employee benefit plan.
Generally Applicable Criminal Law Exception under ERISAsubscribe to see similar legal issues
Application: The court ruled that Hawaii's statute does not qualify as a generally applicable criminal law exempt from ERISA preemption because it specifically targets employee benefit plans.
Reasoning: The court rejects the argument that H.R.S. Sec. 388-6(6) qualifies as a 'generally applicable criminal law' exempt from ERISA preemption.
Impact of State Law on ERISA Planssubscribe to see similar legal issues
Application: The court determined that Hawaii's statute imposes regulatory burdens on ERISA plans, such as requiring potential reporting and funding changes, thus having a substantive connection to ERISA plans.
Reasoning: The law imposes potential reporting, disclosure, and funding requirements for ERISA plans, aligning it with precedents like Standard Oil and Shaw.