California Labor &
Employment Law Blog
Oct 1, 2008

Ninth Circuit Upholds San Francisco’s Employer Health Care Mandate

Topics: Court Decisions

Despite hope for relief for San Francisco employers, yesterday the Ninth Circuit upheld San Francisco's Health Care Security Ordinance's employer spending requirement.

In November 2006, the Golden Gate Restaurant Association (GGRA) filed a lawsuit which challenged the employer spending requirement on the theory that it is preempted by the federal Employee Retirement Income Security Act (ERISA).The U.S. District Court agreed, and the City of San Francisco appealed the ruling.On April 17, the Ninth Circuit held oral arguments on the merits of the City's appeal.Yesterday, on September 30, the Ninth Circuit overturned the U.S. District Court's decision.It held that ERISA does not preempt the ordinance because it does not require employers to establish or alter ERISA plans.

The employer spending requirement, which became effective January 9, 2008, mandates that employers with 50 or more employees make minimum health care expenditures on behalf of covered employees on a quarterly basis.The ordinance became effective on April 21, 2008 for for-profit employers with 20-49 employees.The ordinance sets out a number of options for employers, including making payments for health care insurance, setting up health savings accounts, or providing direct reimbursement for health care costs.The next quarterly payments under the Ordinance are due on October 30, 2008.

It is expected that the GGRA will seek review of the Ninth Circuit's decision from the U.S. Supreme Court.

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About the Editor

Robin Largent has a regular presence in California state and federal courts and has been lead defense counsel and appellate counsel for large and small California employers in litigation (and arbitration) ranging from individual discrimination and harassment claims to complex wage and hour representative and class actions. She also leads the firm’s appellate practice, having substantial experience and success handling appeals, writ petitions, and amicus briefs in both state and federal court on issues such as class certification (particularly in the wage and hour arena), manageability and due process concerns associated with class action trials, exempt/non-exempt misclassification issues, meal and rest break compliance, trade secret/unfair competition matters, and the scope of federal court jurisdiction under the Class Action Fairness Act.
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