U.S. Supreme Court Fort Halifax Packing v. Coyne, 482 U.S. 1 (1987) Fort Halifax Packing Co., Inc. v.
Coyne No. 86-341 Argued March 24, 1987 Decided June 1, 1987 482 U.S.
1 APPEAL FROM THE SUPREME JUDICIAL
COURT OF MAINE Syllabus After appellant closed its poultry packaging and processing
plant and laid off most of the employees who worked there, the
Director of Maine's Bureau of Labor Standards filed suit to enforce
the provisions of a state statute requiring employers, in the event
of a plant closing, to provide a one-time severance payment to
employees not covered by an express contract providing for
severance pay. The State Superior Court granted the Director
summary judgment, holding appellant liable under the statute, and
the State Supreme Court affirmed, rejecting appellant's contentions
that the state statute was preempted by the Employee Retirement
Income Security Act of 1974 (ERISA) and by the National Labor
Relations Act (NLRA). Held: 1. The Maine severance pay statute is not preempted by ERISA,
since it does not "relate to any employee benefit plan" under that
statute's preemption provision, 29 U.S.C. § 1144(a). Appellant's
contention that any state law pertaining to a type of employee
benefit listed in ERISA, such as severance pay, necessarily
regulates an employee benefit plan, and is therefore preempted,
fails in light of the plain meaning and underlying purpose of §
1144(a) and the overall objectives of ERISA itself. Pp. 482 U. S.
7 -19.

															(a) Section 1144(a) does not refer to state laws relating simply
to "employee benefits," but expressly states that state laws are
superseded Page 482 U. S. 2 insofar as they "relate to any employee benefit plan "
(emphasis added). In fact, ERISA uses the words "benefit" and
"plan" separately throughout the statute, and nowhere treats them
as equivalent. Given the basic difference between the two concepts,
Congress' choice of language is significant in its preemption of
only the latter, which cannot be read out of ERISA. In order to be
preempted, a state statute must have some connection with, or
reference to, a plan. Pp. 482 U. S. 7 -8.

															(b) Premption of the Maine statute would not further the purpose
of ERISA preemption, which is to allow plans to adopt a uniform
scheme for coordinating complex administrative activities,
unaffected by conflicting regulatory requirements in differing
States. The Maine statute neither establishes, nor requires an
employer to maintain, a plan that would embody a set of
administrative practices vulnerable to the burden imposed by a
patchwork, multistate regulatory scheme. In fact, the theoretical
possibility of a one-time, lump-sum severance payment triggered by
a single event requires no administrative scheme whatsoever to meet
the employer's statutory obligation. Pp. 482 U. S.
8 -15.

															(c) Similarly, the Maine statute does not implicate the
regulatory concerns of ERISA itself, which was enacted to ensure
administrative integrity in the operation of plans by preventing
potential fiduciary abuse. The Maine statute neither establishes a
plan nor generates any administrative activity capable of being
abused. Pp. 482 U. S.
15 -16.

															(d) Appellant's contention that failure to preempt the Maine
statute will allow employers to circumvent ERISA, by persuading
States to require types of plans the employers would otherwise have
established on their own, has no force with respect to a state
statute that, as here, does not establish a plan, generates no
ERISA-covered program activity, presents no risk that otherwise
applicable federal requirements will be evaded by an employer or
dislodged by a State, and creates no prospect that an employer will
face difficulty in operating a unified administrative benefit
payment scheme. Holland v. Burlington Industries, Inc., 772 F.2d 1140, summarily aff'd, 477 U.S. 901, and Gilbert v. Burlington Industries, Inc., 765 F.2d 320, summarily aff'd, 477 U.S. 901, distinguished. Pp. 482 U. S.
16 -19.

															(e) Where, as here, a state statute creates no danger of
conflict with a federal statute, there is no reason to disable it
from attempting to address uniquely local social and economic
problems. P. 482 U. S. 19 .

															2. The Maine severance pay statute is not preempted by the NLRA.
Appellant's argument that the statute's establishment of a minimum
labor standard impermissibly intrudes upon the collective
bargaining process was rejected in Metropolitan Life Ins. Co.
v. Massachusetts, 471 U. S. 724 , and
is without merit here. Although the statute does Page 482 U. S. 3 give employees something for which they might otherwise have had
to bargain, that is true of any state law that substantively
regulates employment conditions. Moreover, appellant's argument
that this case is distinguishable from Metropolitan Life because the statutory obligation at issue here is optional, in that
it applies only in the absence of an agreement between employer and
employees, is not persuasive, since, in fact, the parties' freedom
to devise their own severance pay arrangements strengthens the case
that the statute works no intrusion on collective bargaining. Thus,
the statute is a valid and unexceptional exercise of the State's
police power, and is compatible with the NLRA. Pp. 482 U. S.
19 -22. 510
A.2d 1054 , affirmed.

															BRENNAN, J., delivered the opinion of the Court, in which
MARSHALL, BLACKMUN, POWELL, and STEVENS, JJ., joined. WHITE, J.,
filed a dissenting opinion, in which REHNQUIST, C.J., and O'CONNOR
and SCALIA, JJ., joined, post p. 482 U. S. 23 .

															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. Page 482 U. S. 4 Ann., Tit. 26, § 625-B (Supp.1986-1987), [ Footnote 1 ] is preempted by either the Employee
Retirement Income Security Act of 1974, 88 Stat. 832, as amended,
29 U.S.C. §§ 1001-1381 (ERISA), or the National Labor Relations
Act, 49 Stat. 452, as amended, 29 U.S.C. §§ 157-158 (NLRA). The
statute was upheld by the Maine Superior Court, Civ. Action No.
CV81-516 (Oct. 29, 1982), and by the Maine Supreme Judicial Court, 510 A.2d
1054 (1986). We noted probable jurisdiction, 479 U.S. 947
(1986), and now affirm. I 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 Page 482 U. S. 5 of closing, over 100 employees were on the payroll. Forty-five
had worked in the plant for over 10 years, 19 for over 20 years,
and 2 for 29 years. Plaintiff's Supplementary Response to Employee
List, Exhibit A (June 3, 1983). Following the closing, the Company
met with state officials and with representatives of Local 385 of
the Amalgamated Meat Cutters & Butcher Workmen of North
America, which represented many of the employees who had worked in
the plant. While Fort Halifax initially suggested that reopening
the plant might be feasible if the union agreed to certain
concessions in the form of amendments to the collective bargaining
agreement, ultimately the Company decided against resuming
operations and to close the plant.

															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. [ Footnote
2 ] Page 482 U. S. 6 The Superior Court, ruling on cross-motions for summary
judgment, granted the Director's motion, holding that Fort Halifax
is liable for severance pay under the statute. Civ. Action No.
CV81-516 (Oct. 29, 1982). The Maine Supreme Judicial Court
affirmed. 510 A.2d
1054 (1986). The court rejected the Company's contention that
the plant-closing statute was preempted by ERISA, holding that
ERISA preempted only benefit plans created by employers or employee
organizations. Id. at 1059. It observed that the severance
pay liability in this case results from the operation of the state
statute, rather than from the operation of an employer-created
benefit plan. Ibid. Therefore, reasoned the court,

															"[i]nasmuch as § 625-B does not implicate a plan created by an
employer or employee organization, it cannot be said to be
preempted by ERISA." Ibid. The court also rejected the argument that the
state provision was preempted by the NLRA because it regulated
conduct covered by either § 7 or § 8 of that statute. It found that
the Maine statute applies equally to union and nonunion employees,
and reflects "the state's substantial interest in protecting Maine
citizens from the economic dislocation that accompanies large-scale
plant closings." Id. at 1062. As a result, the court found
that eligible employees were entitled to severance pay due to the
closure of the plant at Winslow. [ Footnote 3 ]

															We hold that the Maine statute is not preempted 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. [ Footnote 4 ] We hold
further that Page 482 U. S. 7 the Maine law is not preempted by the NLRA, since it establishes
a minimum labor standard that does not intrude upon the collective
bargaining process. As a result, we affirm the judgment of the
Maine Supreme Judicial Court that the Maine statute is not
preempted by either ERISA or the NLRA. II 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 preempted. Because
severance benefits are included in ERISA, see 29 U.S.C. §
1002(1)(B), appellant argues that ERISA preempts the Maine statute.
[ Footnote 5 ] In effect,
appellant argues that ERISA forecloses virtually all state
legislation regarding employee benefits. This contention fails,
however, in light of the plain language of ERISA's preemption
provision, the underlying purpose of that provision, and the
overall objectives of ERISA itself. A The first answer to appellant's argument is found in the express
language of the statute. ERISA's preemption provision does not
refer to state laws relating to "employee benefits," but to state
laws relating to "employee benefit plans ": Page 482 U. S. 8 "[T]he provisions of this subchapter . . . shall supersede any
and all State laws insofar as they may now or hereafter relate to
any employee benefit plan described in § 1003(a) of this
title and not exempt under § 1003(b) of this title."

															29 U.S.C. § 1144(a) (emphasis added). 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 , 463 U. S. 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
preemption 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 preemption section and the regulatory scheme as a whole. B The second answer to appellant's argument is that preemption of
the Maine statute would not further the purpose of ERISA
preemption. 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 , 471 U. S. 747 (1985) (quoting Malone v. White Motor Corp., 435 U.
S. 497 , 435 U. S. 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 Page 482 U. S. 9 benefit plan or employee pension benefit plan or a plan which is
both an employee welfare benefit plan and an employee pension
benefit plan."

															29 U.S.C. § 1002(3).

															Statements by ERISA's sponsors in the House and Senate clearly
disclose the problem that the preemption 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. Page 482 U. S. 10 We have not hesitated to enforce ERISA's preemption provision
where state law created the prospect that an employer's
administrative scheme would be subject to conflicting requirements.
In Alessi v. Raybestos-Manhattan, Inc., 451 U.
S. 504 (1981), for instance, we struck down a New Jersey
statute that prohibited offsetting worker compensation payments
against pension benefits. Since such a practice is permissible
under federal law and the law of other States, the effect of the
statute was to force the employer either to structure all its
benefit payments in accordance with New Jersey law or to adopt
different payment formulae for employees inside and outside the
State. The employer therefore was required to accommodate
conflicting regulatory schemes in devising and operating a system
for processing claims and paying benefits -- precisely the burden
that ERISA preemption was intended to avoid.

															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 463 U. S. 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 preemption 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 463 U. S. 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 preemption exemption for
plans maintained "for the purpose of complying with . . .
disability insurance laws." 29 U.S.C. § 1003(b)(3). Page 482 U. S. 11 To permit the exemption to apply to disability benefits paid
under a multibenefit plan was held to be inconsistent with the
purpose of ERISA's preemption provision:

															"An employer with employees in several States would find its
plan subject to a different jurisdictional pattern of regulation in
each State, depending on what benefits the State mandated under
disability, workmen's compensation, and unemployment compensation
laws. The administrative impracticality of permitting mutually
exclusive pockets of federal and state jurisdiction within a plan
is apparent."

															463 U.S. at 463 U. S.
107 -108.

															It is thus clear that ERISA's preemption 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. Preemption 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 preemption provision make clear that the
Maine statute in no way raises the types of concerns that prompted
preemption. Congress intended preemption 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 preempted state laws relating
to plans, rather than simply to benefits. Only a
plan embodies a set of Page 482 U. S. 12 administrative practices vulnerable to the burden that would be
imposed by a patchwork scheme of regulation.

															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. [ Footnote 6 ] Once this single event is over,
the employer has no further responsibility. The theoretical
possibility of a one-time obligation in the future simply creates
no need for an ongoing administrative program for processing claims
and paying benefits.

															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 Page 482 U. S. 13 down, for it posed two types of problems. [ Footnote 7 ] First, the employer in that case
already had in place a health care plan governed by ERISA, which
did not comply in all respects with the Hawaii Act. If the employer
sought to achieve administrative efficiencies by integrating the
Hawaii plan into its existing plan, different components of its
single plan would be subject to different requirements. If it
established a separate plan to administer the program directed by
Hawaii, it would lose the benefits of maintaining a single
administrative scheme. Second, if Hawaii could demand the operation
of a particular benefit plan, so could other States, which would
require that the employer coordinate perhaps dozens of programs. Agsalud thus illustrates that whether a State requires an
existing plan to pay certain benefits, or whether it requires the
establishment of a separate plan where none existed before, the
problem is the same. Faced with the difficulty or impossibility of
structuring administrative practices according to a set of uniform
guidelines, an employer may decide to reduce benefits or simply not
to pay them at all. [ Footnote
8 ] Page 482 U. S. 14 By contrast, the Maine law does not put the employer to the
choice of either: (1) integrating a state-mandated ongoing benefit
plan with an existing plan or (2) establishing a separate plan to
process and pay benefits under the plan required by the State. This
is because there is no state-mandated benefit plan to administer.
In this case, for instance, Fort Halifax found no need to respond
to passage of the Maine statute by setting up an administrative
scheme to meet its contingent statutory obligation, any more than
it would find it necessary to set up an ongoing scheme to deal with
the obligations it might face in the event that some day it might
go bankrupt. The Company makes no contention that its statutory
duty has in any way hindered its ability to operate its retirement
plan in uniform fashion, a plan that pays retirement, death, and
permanent and total disability benefits on an ongoing basis. App.
40. The obligation imposed by the Maine statute thus differs
radically in impact from a requirement that an employer pay ongoing
benefits on a continuous basis.

															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
preemption was intended to prevent. [ Footnote 9 ] As a result, preemption of the Maine law would
not Page 482 U. S. 15 serve the purpose for which ERISA's preemption provision was
enacted. C The third answer to appellant's argument is that the Maine
statute not only fails to implicate the concerns of ERISA's
preemption 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 Page 482 U. S. 16 meant to provide employees information "covering in detail the fiscal operations of their plan") (emphasis
added).

															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 preemption to clear the way for
exclusive federal regulation, for there would be nothing to
regulate. Under such circumstances, preemption would in no way
serve the overall purpose of ERISA. D Appellant contends that failure to preempt 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 preempts state regulation of preexisting
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
preemption provision, by allowing them to require directly what
they are forbidden to regulate. In contrast, our analysis of the
purpose Page 482 U. S. 17 of ERISA preemption makes clear why the mere fact that a plan is
required by a State is insufficient to fend off preemption. The
requirements imposed by a State's establishment of a benefit plan
would pose a formidable barrier to the development of a uniform set
of administrative practices. As Standard Oil Co. of California
v. Agsalud, 633 F.2d 760 (CA9 1980), illustrates, an employer
would be put to the choice of operating separate ongoing benefit
plans or a single plan subject to different regulatory
requirements, and would face the prospect that numerous other
States would impose their own distinct requirements -- a result
squarely inconsistent with the goal of ERISA preemption.

															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 Page 482 U. S. 18 case, whether the employer had a "plan"; [ Footnote 10 ] there was a "plan" and the only
issue was whether the type of benefits paid by that plan are among
those covered by ERISA. The precise question was simply whether
severance benefits paid by a plan out of general assets, rather
than out of a trust fund, should be regarded as employee welfare
benefits under 29 U.S.C. § 1002. [ Footnote 11 ]

															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). [ Footnote 12 ] Page 482 U. S. 19 The Burlington cases therefore do not support
appellant's argument. E ERISA preemption 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 451 U. S. 522 .
The argument that ERISA preempts 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 preemption 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. [ Footnote 13 ] Since the Maine
severance payment statute raises no danger of such conflict, we
hold that the statute is not preempted by ERISA. III Appellant also contends that Maine's statute is preempted by the
NLRA. In so arguing, the Company relies on the strand of NLRA
preemption 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 , 475 U. S. 614 (1986). [ Footnote 14 ]
Restriction on state activity in this area rests on the theory that
preemption is necessary to further Congress' intent that "the
conduct involved Page 482 U. S. 20 be unregulated because [it should be] left to be controlled
by the free play of economic forces.'" Machinists v. Wisconsin
Employment Relations Comm'n, 427 U. S. 132 , 427 U. S. 140 (1976) (quoting NLRB v. Nash-Finch Co., 404 U.
S. 138 , 404 U. S. 144 (1971)). 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 preempted by the
NLRA." Id. at 471 U. S. 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 471 U. S. 754 .
Such regulation provides protections Page 482 U. S. 21 to individual union and nonunion workers alike, and thus
"neither encourage[s] nor discourage[s] the collective bargaining
processes that are the subject of the NLRA." Id. at 471 U. S. 755 .
Furthermore, preemption should not be lightly inferred in this
area, since the establishment of labor standards falls within the
traditional police power of the State. As a result, held the
Court:

															"When a state law establishes a minimal employment standard not
inconsistent with the general legislative goals of the NLRA, it
conflicts with none of the purposes of the Act." Id. at 471 U. S. 757 .
It is true that the Maine statute gives employees something for
which they otherwise might have to bargain. That is true, however,
with regard to any state law that substantively regulates
employment conditions. Both employers and employees come to the
bargaining table with rights under state law that form a
" backdrop'" for their negotiations. Ibid. (quoting Taggart v. Weinacker's, Inc., 397 U.
S. 223 , 397 U. S. 228 (1970) (concurring opinion)). Absent a collective bargaining
agreement, for instance, state common law generally permits an
employer to run the workplace as it wishes. The employer enjoys
this authority without having to bargain for it. The parties may
enter negotiations designed to alter this state of affairs, but if
impasse is reached, the employer may rely on preexisting state law
to justify its authority to make employment decisions; that same
state law defines the rights and duties of employees. Similarly,
Maine provides that employer and employees may negotiate with the
intention of establishing severance pay terms. If impasse is
reached, however, preexisting state law determines the right of
employees to a certain level of severance pay and the duty of the
employer to provide it. Thus, the mere fact that a state statute
pertains to matters over which the parties are free to bargain
cannot support a claim of preemption, for "there is nothing in the NLRA . . . which expressly forecloses
all state regulatory power with respect to those issues . . . that
may be the Page 482 U. S. 22 subject of collective bargaining." Malone v. White Motor Corp., 435 U.
S. 497 , 435 U. S.
504 -505 (1978).

															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 preemption, see Metropolitan Life, surely one that permits such
bargaining cannot be preempted. [ Footnote 15 ]

															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 471 U. S. 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 471 U. S. 756 ,
the Maine statute is not preempted by the NLRA. [ Footnote 16 ] Page 482 U. S. 23 IV We hold that the Maine severance pay statute is not preempted 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 preempted 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 Affirmed. [ Footnote 1 ]

															The statute provides in pertinent part:

															"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.

															[ Footnote 2 ]

															Section 626-B(5) of the Maine statute provides in relevant
part:

															"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. . . ."

															[ Footnote 3 ]

															Ninety-three employees of the plant are eligible for lump-sum
payments ranging from $490 to $11,500. The total amount due is
about $256,600. Affidavit of Xavier J. Dietrich, Exhibit A (Aug.
13, 1984).

															[ Footnote 4 ]

															Because we hold that the obligation created by the Maine statute
does not involve a plan, we do not address the State's alternative
argument that, even if the law does establish a plan, it is not
preempted by virtue of the exemption for plans "maintained solely
for the purpose of complying with applicable . . . unemployment
compensation or disability insurance laws." 29 U.S.C. §
1003(b)(3).

															[ Footnote 5 ]

															Section 1002(1)(B) defines an employee welfare benefit plan as a
plan that pays, inter alia, benefits described in 29
U.S.C. § 186(c). The latter section includes, inter alia, money paid by an employer to a trust fund to pay for severance
benefits. Section 1002(1)(B) has been construed to include
severance benefits paid out of general assets, as well as out of a
trust fund. See Holland v. Burlington Industries, Inc., 772 F.2d 1140 (CA4 1985), summarily aff'd, 477 U.S. 901
(1986); Gilbert v. Burlington Industries, Inc., 765 F.2d
320 (CA2 1985), summarily aff'd, 477 U.S. 901 (1986); Scott v. Gulf Oil Corp., 754 F.2d 1499 (CA9 1985); 29 CFR
§ 2510.3-1(a)(3) (1986). See also discussion infra at 482 U. S.
17 -19.

															[ Footnote 6 ] See Martori Bros. Distributors v. James-Massengale, 781
F.2d 1349, 1358 (CA9) ("It is difficult to see how the making of
one-time lump sum payments could constitute the establishment of a
plan"), amended on other grounds, 791 F.2d 799, cert.
denied, 479 U.S. 949 (1986). Cf. Donovan v.
Dillingham, 688 F.2d 1367, 1373 (CA11 1982) ("A decision to
extend benefits is not the establishment of a plan or
program").

															[ Footnote 7 ]

															In 1983, Congress amended ERISA to exempt from preemption
certain provisions of the Hawaii Act in place before the enactment
of ERISA, Haw.Rev.Stat. §§ 393-1 through 393-48 (1976 and
Supp.1984). 29 U.S.C. § 1144(b)(5). The amendment did not exempt
from preemption those portions of the law dealing with reporting,
disclosure, and fiduciary requirements.

															[ Footnote 8 ]

															The dissent draws support for its position from the the court's
rejection in Agsalud of the argument that only state laws
relating to plan administration, as opposed to plan benefits, are
preempted by ERISA. Post at 482 U. S. 26 . The
court's position, however, no more than acknowledges what we have
said in our discussion, supra: state laws requiring the
payment of benefits also "relate to a[n] employee benefit plan" if
they attempt to dictate what benefits shall be paid under a plan.
To hold otherwise would create the prospect that plan
administration would be subject to differing requirements regarding
benefit eligibility and benefit levels -- precisely the type of
conflict that ERISA's preemption provision was intended to
prevent.

															[ Footnote 9 ]

															Appellant notes that death benefits sometimes involve a one-time
payment to beneficiaries, and that ERISA nonetheless defines an
employee welfare benefit plan to include a program that pays such
benefits. 29 U.S.C. § 1002(1). Thus, it contends, the fact that the
Maine statute requires a single payment does not mean that the
statute does not establish a plan. This argument, however,
misunderstands what it is that makes a plan a plan. While death
benefits may represent a one-time payment from the perspective of
the beneficiaries, the employer clearly foresees the need to make
regular payments to survivors on an ongoing basis. The ongoing,
predictable nature of this obligation therefore creates the need
for an administrative scheme to process claims and pay out
benefits, whether those benefits are received by beneficiaries in a
lump sum or on a periodic basis. This is borne out by the fact that
death benefits are included in appellant's retirement plan, with
instructions on how eligibility is to be determined, benefit levels
calculated, and disbursements made. App. 54-56. By contrast,
appellant's statutory obligation did not prompt the establishment
of any payment program, since there were no ongoing benefits to be
paid.

															[ Footnote 10 ]

															The employer had made a commitment to pay severance benefits to
employees as each person left employment. This commitment created
the need for an administrative scheme to pay these benefits on an
ongoing basis, and the company had distributed both a Policy Manual
and Employees' Handbook that provided details on matters such as
eligibility benefit levels, and payment schedules. 772 F.2d at
1143-1144, and n. 1; 765 F.2d at 323. The fact that the employer
had not complied with the requirements of ERISA in operating this
scheme therefore does not, as the dissent contends, post at 482 U. S. 25 -26,
mean that no such program for paying benefits was in existence.

															[ Footnote 11 ]

															The question arose because § 1002(1)(B) provides that an
employee welfare benefit plan includes a plan that provides
benefits described in 29 U.S.C. § 186(c). The latter section lists, inter alia, money paid by an employer to a trust fund for
severance benefits.

															[ Footnote 12 ]

															Thus, if a State required a benefit whose regularity of payment
necessarily required an ongoing benefit program, it could not evade
preemption by the simple expedient of somehow formally
characterizing the obligation as a one-time, lump-sum payment
triggered by the occurrence of a certain contingency. It is
therefore not the case, as the dissent argues, post at 482 U. S. 23 ,
that a State could dictate the payment of numerous employee
benefits "by simply characterizing them as
non- administrative.'" Ibid. [ Footnote 13 ]

															During the decade between 1971 and 1981, a total of 107 plants
were closed in Maine, resulting in the direct loss of 21,215 jobs.
Leighton, Plant Closings in Maine: Law and Reality, in Key Issues,
No. 27, Plant Closing Legislation 1 (A. Aboud ed., 1984). Taking
into account the multiplier effects of these job losses on the
local communities, it is estimated that the total number of jobs
lost in Maine during this period was 49,219. Id. at 3.
These losses were concentrated in the poorer counties of the State
and in the lower wage industries, resulting in a significant burden
on local public and private social service agencies. Id. at 4.

															[ Footnote 14 ]

															The National Labor Relations Act contains no express preemption
provision.

															[ Footnote 15 ]

															Appellant also contends that, unlike the statute in Metropolitan Life, the Maine law does not fall equally
upon union and nonunion employees. Nonunion employers, it argues,
are free unilaterally to escape their statutory obligation by
establishing severance payment levels, while unionized employers
must engage in collective bargaining in order to achieve the same
result. Any difference in the ease of establishing alternative
severance payment obligations, however, flows not from the statute,
but from the basic fact that a nonunion employer is freer to set
employment terms than is a unionized employer.

															[ Footnote 16 ]

															We also find no support for an argument of preemption under the
rule established in San Diego Building Trades Council v.
Garmon, 359 U. S. 236 (1959), since the Maine statute does not purport to regulate any
conduct subject to regulation by the National Labor Relations
Board. See Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. at 471 U. S.
748 -749.

															JUSTICE WHITE, with whom THE CHIEF JUSTICE, JUSTICE O'CONNOR,
and JUSTICE SCALIA join, dissenting.

															The Court rejects appellant's preemption 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
preemption turn on the existence of an "administrative scheme," the
Court creates a loophole in ERISA's preemption 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 preemption 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. Page 482 U. S. 24 ERISA preempts "any and all State laws insofar as they may now
or hereafter relate to any employee benefit plan. . . ." 29 U.S.C.
§ 1144. Congress defined an "employee welfare benefit plan" as

															"any plan, fund, or program which was heretofore or is hereafter
established or maintained by an employer or an employee
organization"

															and which provides certain benefits, including severance pay. 29
U.S.C. § 1002(1). See Gilbert v. Burlington Industries,
Inc., 765 F.2d 320, 325 (CA2 1985), summarily aff'd, 477 U.S. 901 (1986). A state law "which requires employers to pay
employees specific benefits clearly relate[s] to' benefit
plans" as contemplated by ERISA's preemption provision. Shaw v.
Delta Air Lines, Inc., 463 U. S. 85 , 463 U. S. 97 (1983). I would have thought this to be the end of the preemption
inquiry. Here, the Maine statute clearly creates an employee
benefit plan, and having created an ERISA plan, the
statute plainly "relates to" such a plan. The Maine Supreme
Judicial Court, in effect, acknowledged as much, but held that
Maine's statute was not preempted by ERISA because it was created
by the state legislature, instead of by a private employer.
Apparently recognizing the flaw inherent in this reasoning, the
majority nevertheless struggles to achieve its desired result by
asserting that the statute does not create a "plan" because it does
not require an employer to establish an administrative scheme. I
cannot accept this conclusion. 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 482 U. S. 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 Page 482 U. S. 25 event that may never happen does not make the plan that the
legislature has imposed upon employers any less of a plan. And that
there may be imprudent employers who either are unaware of the
severance pay statute or order their business affairs as if the
statute's obligations do not exist -- and it is upon the behavior
of this class of employers that the majority seemingly relies in
concluding that the severance pay statute does not embody an
"administrative scheme" -- in no way supports the remarkable
conclusion that the statutory obligations do not constitute a plan
for the payment of severance benefits.

															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 Page 482 U. S. 26 also Holland v. Burlington Industries, Inc., 772 F.2d
1140 (CA4 1985), summarily aff'd, 477 U.S. 901 (1986).

															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 preempted
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 482 U. S. 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 preemption
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 preempt all state laws that relate to
employee benefit plans. For that reason, I dissent.

Summary: In this case, the Supreme Court ruled that a Maine state law requiring employers to provide severance pay to employees in the event of a plant closing was not preempted by the Employee Retirement Income Security Act of 1974 (ERISA). The Court found that the state law did not "relate to any employee benefit plan" under ERISA's preemption provision, as it did not establish or require employers to maintain a plan, and it did not implicate the regulatory concerns of ERISA.