Concerned Home Care Providers, Inc. v. Cuomo
783 F.3d 77
2d Cir.2015Background
- New York enacted the Wage Parity Law (N.Y. Pub. Health Law § 3614-c) in 2011 to set minimum “total compensation” (wages + benefits/supplements/time off) for home care aides providing Medicaid-reimbursed care in New York City and nearby counties.
- The statute phases in minimum rates tied to New York City’s Living Wage and, for later years, to the prevailing total compensation from the largest collective bargaining agreement as of January 1, 2011 (then SEIU Local 1199).
- Subdivision 4 carved out that portions of the minimum attributable to health-benefit costs or payments in lieu would be superseded by the terms of any bona fide collective bargaining agreement in effect as of Jan. 1, 2011 that funds health benefits through jointly administered labor-management (Taft-Hartley) funds.
- Plaintiffs (five licensed home care agencies and a trade association) sued, alleging preemption by the NLRA and ERISA and Fourteenth Amendment (Due Process and Equal Protection) violations.
- The district court: upheld the law against NLRA and Fourteenth Amendment challenges, found subdivision 4 preempted by ERISA and enjoined it, and severed subdivision 4 from the statute. Defendants appealed as to other claims; the ERISA ruling for subdivision 4 was not appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| NLRA preemption (Machinists) | Law intrudes on collective-bargaining process by fixing compensation tied to union contract terms | Law is a traditional state minimum labor standard that treats union and nonunion workers alike and does not regulate bargaining mechanics | Not preempted — statute is a valid minimum labor standard, not an impermissible intrusion on bargaining process |
| ERISA preemption (connection/reference) | Law “connects with” ERISA because employers may have to change ERISA plans; subdivision 4 singles out Taft-Hartley plans | Law permits employers to satisfy minimum via wages, non‑ERISA benefits, or ERISA plans; subdivision 4 (the carve-out) was invalid but severable | Remainder of law (except subdivision 4) not preempted by ERISA; subdivision 4 was severed by district court and that order was not appealed |
| Equal Protection | Using NYC rate to set pay for surrounding counties discriminates and is arbitrary | Legislature rationally sought to stabilize and align compensation across the metro area to improve recruitment/retention | Rational-basis review satisfied; equal protection claim fails |
| Due Process / unlawful delegation | Law delegates power to SEIU 1199 by tying rate to union agreement, depriving plaintiffs of property interest | Rate is fixed by statute referencing the preexisting Jan. 1, 2011 agreement; SEIU has no post hoc control; no protectable property interest in Medicaid reimbursement rates | Due process claim fails: no protected property interest and no unlawful delegation |
Key Cases Cited
- Lodge 76 Int’l Ass’n of Machinists & Aerospace Workers v. Wis. Emp’t Relations Comm’n, 427 U.S. 132 (1976) (states may not intrude on core bargaining-process mechanics)
- Metro. Life Ins. Co. v. Massachusetts, 471 U.S. 724 (1985) (distinguishing state minimum labor standards from regulation of collective bargaining)
- Fort Halifax Packing Co. v. Coyne, 482 U.S. 1 (1987) (upholding state severance law as a permissible state labor standard)
- Shaw v. Delta Air Lines, Inc., 463 U.S. 85 (1983) (ERISA preemption test: law that has connection with or reference to ERISA plans may be preempted)
- N.Y. State Conf. of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645 (1995) (ERISA’s aim is uniform administration of benefit plans; state laws with only indirect effects on plans are often not preempted)
- Cal. Div. of Labor Standards Enf. v. Dillingham Constr., N.A., 519 U.S. 316 (1997) (state prevailing-wage rule was not preempted despite indirect effects on ERISA plans)
- Burgio & Campofelice, Inc. v. New York Dep’t of Labor, 107 F.3d 1000 (2d Cir. 1997) (upholding NY prevailing-rate law against ERISA preemption where employers could comply through ERISA or non‑ERISA means)
- Mackey v. Lanier Collection Agency & Serv., Inc., 486 U.S. 825 (1988) (ERISA preemption can occur where state law singles out ERISA plans for unique treatment)