Understanding ERISA Preemption
American workers have benefited from The Employee Retirement Income Security Act (ERISA) for nearly fifty years.
The Act, passed by Congress in 1974, protects American workers by creating minimum standards for employee retirement plans, 401ks, DBA plans, pensions, and even disability insurance plans.
With minimum standards in place, the federal government seeks to promote and ensure a level playing field for all Americans in the private workforce both during and after their careers. With these minimum standards in place, the federal government has to spend less resources on “public” retirement planning like that done by the Social Security system.
Since we live in a federalist system, however, different states have their own laws that often overlap with federal regulations. Where congruent state laws overlap with federal rules, the overlap is not a problem. Where state laws differ from or conflict with federal regulations, however, questions arise.
The question of which law takes precedence over the other is the primary question that arises in these situations. ERISA is no exception. State laws sometimes conflict with federal ERISA provisions, so it is important to understand what happens when those rules come into conflict.
What Is Preemption?
Preemption is the legal term for what happens when two laws are applicable to a given situation but are in conflict with or similar to one another.
A law, rule, or regulation “preempts” another when that rule takes precedence over the other. Consistently affirmed by The Supreme Court, the general rule in the United States is that federal law preempts state law where the two come into conflict.
This rule, however, is not true 100% of the time. Sometimes state laws preempt federal laws. In fact, certain state laws preempt ERISA provisions entirely.
If you need to file an ERISA claim, it is crucial that you understand the relationship between ERISA and state law—particularly, what aspects of ERISA preempt state law and what aspects of state law preempt ERISA rules.
When Does ERISA Not Preempt State Law?
Generally, federal laws like ERISA preempt state law. In fact, the ERISA preemption clause specifically notes that it preempts conflicting or otherwise similar state laws. Thus, the exceptions to the general rule provide us with a good place to start our breakdown of ERISA preemption of state laws. ERISA does not preempt state laws regarding:
- Retirement, pension, or health plans attained through employment with a government, a government contractor, or a government agency;
- Retirement, pension, or health plans attained through employment with a religious organization;
- Workers’ compensation benefits; or
- Retirement, pension, disability, or health benefits that are not purchased as part of a plan through an employer.
If the benefits you are filing a claim over fall into any of the aforementioned categories, ERISA will not preempt conflicting or similar state laws.
How Does ERISA Preempt State Law?
One of the ways in which the ERISA preempts state law is that it excludes certain legal remedies for plaintiffs filing a claim under its regulations. The excluded remedies are remedies that are otherwise available to any plaintiff in a state court, so they are important to know:
- No jury trial allowed in ERISA cases;
- Claimants cannot claim punitive damages;
- Attorney fees for the successful claimant are only possible at a judge’s discretion; and
- Full judicial review is not granted on appeal.
Many of these limitations relate specifically to the fact that an ERISA trial is not a typical trial. As noted, there is no jury, so the results rely entirely on a judge’s interpretation of the situation. While these preemptions may apply to your case, they may not.
They are only general rules, and in the field of law there are always exceptions. The only way to definitively find out whether preemption will affect your ERISA claim is to consult with an experienced ERISA attorney.
Call the Award Winning ERISA Team at Peace Law Firm Today
If you need to file an ERISA claim, the team at Peace Law Firm is here to help you. Whether you have questions about ERISA preemption, how preemption might affect your claim, or whether you have a valid claim, we can help.
ERISA claims are a primary focus for our team of labor attorneys, so we know the ins and outs of what is often a complicated, daunting legal process.
With Peace Law Firm at your side, you will have peace of mind with an experienced, compassionate, and unrelenting team at your back. With free consultations offered by our firm, you have nothing to lose, so contact us today!