Metropolitan Life Ins. Co. v. Massachusetts

In Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724, 105 S.Ct. 2380, 85 L.Ed.2d 728 (1985), the Supreme Court summarized the task courts face when confronted with the issue of preemption, stating: In deciding whether a federal law preempts a state statute, our task is to ascertain Congress' intent in enacting the federal statute at issue. Pre-emption may be either express or implied, and is compelled whether Congress' command is explicitly stated in the statute's language or implicitly contained in its structure and purpose. Id. at 738, 105 S.Ct. 2380. As the Supreme Court explained in Metropolitan Life, 471 U.S. 724, 105 S.Ct. 2380, 85 L.Ed.2d 728, this "second pre-emption doctrine protects against state interference with policies implicated by the structure of the Act itself, by pre-empting state law and state causes of action concerning conduct that Congress intended to be unregulated." Id. at 749, 105 S.Ct. 2380. This preemption doctrine governs "preemption questions that arose concerning activity that was neither arguably protected against employer interference by 7 and 8(a)(1) of the NLRA, nor arguably prohibited as an unfair labor practice by 8(b) of that Act. 29 U.S.C. 157, 158(a)(1) and (b)." Id In Metropolitan Life, 471 U.S. 724, 105 S.Ct. 2380, 85 L.Ed.2d 728, two insurance companies ("appellants"), which issued group-health insurance policies in Massachusetts, argued that a Massachusetts statute requiring "any general health-insurance policy that provides hospital and surgical coverage, or any benefit plan that has such coverage, to provide as well a certain minimum of mental-health protection," was preempted by ERISA and the NLRA. Id. at 730, 105 S.Ct. 2380. The appellants in Metropolitan Life argued that "because welfare benefits are a mandatory subject of bargaining under the labor law, ... the NLRA pre-empts any state attempt to impose minimum-benefit terms on the parties." Id. at 751-52, 105 S.Ct. 2380. The Supreme Court rejected this argument, concluding that "the evil Congress was addressing with the NLRA ... was entirely unrelated to local or federal regulation establishing minimum terms of employment." Id. at 754, 105 S.Ct. 2380. Accordingly, the Court held that "no incompatibility exists, therefore, between federal rules designed to restore the equality of bargaining power, and state or federal legislation that imposes minimal substantive requirements on contract terms negotiated between parties to labor agreements, at least so long as the purpose of the state legislation is not incompatible with these general goals of the NLRA." Id. at 754-55, 105 S.Ct. 2380. The Court further expounded on the meaning of minimum state labor standards, stating they "affect union and nonunion employees equally, and neither encourage nor discourage the collective-bargaining processes that are the subject of the NLRA. Nor do they have any but the most indirect effect on the right of self-organization established in the Act." Id. at 755, 105 S.Ct. 2380. "Most significantly," continued the Court, there was "no suggestion in the legislative history of the NLRA that Congress intended to disturb the myriad state laws then in existence that set minimum labor standards, but were unrelated in any way to the processes of bargaining or self-organization." Id. at 756, 105 S.Ct. 2380. Rather, the Court "believed that 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. The Supreme Court added: Federal labor law in this sense is interstitial, supplementing state law where compatible, and supplanting it only when it prevents the accomplishment of the purpose of the federal Act. Thus the Court has recognized that it cannot declare pre-empted all local regulation that touches or concerns in any way the complex interrelationship between employees, employers, and unions; obviously, much of this is left to the States. 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 756-57, 105 S.Ct. 2380. The Supreme Court then applied the aforementioned principles to the case at hand and held: Massachusetts' mandated-benefit law is an insurance regulation designed to implement the Commonwealth's policy on mental-health care, and as such is a valid and unexceptional exercise of the Commonwealth's police power. It was designed in part to ensure that the less wealthy residents of the Commonwealth would be provided adequate mentalhealth treatment should they require it. Though the insurance statute, like many laws affecting terms of employment, potentially limits an employee's right to choose one thing by requiring that he be provided with something else, it does not limit the rights of self-organization or collective bargaining protected by the NLRA, and is not pre-empted by the Act. Id. at 758, 105 S.Ct. 2380. Accordingly, the Supreme Court held that Massachusetts' mandated-benefit law is not preempted by the NLRA. Id.