289 F. Supp. 3d 1130
E.D. Cal.2017Background
- Several railroad employers sued the California Labor Commissioner seeking a declaration that the Railroad Unemployment Insurance Act (RUIA) preempts California's Healthy Workplaces, Healthy Families Act (California Act) as applied to railroad employees; unions intervened and the United States filed a statement of interest.
- RUIA establishes a federal unemployment system for railroad workers and, via a sickness provision, provides wage-replacement sickness benefits for employees unable to work due to their own illness, injury, pregnancy, or childbirth; it contains an express preemption clause barring state sickness benefits based on railroad employment after June 30, 1947 (45 U.S.C. § 363(b)).
- The California Act requires employers to provide and permit use of accrued paid sick leave for various purposes: employee’s own diagnosis/care/preventive care; caring for family members; and ‘‘safe leave’’ for domestic violence, sexual assault, or stalking.
- Plaintiffs argued RUIA broadly preempts all state sickness laws applicable to railroad employees; defendants (Labor Commissioner, intervening unions, and the United States) argued the clause is limited to state benefits that are the same or similar to RUIA’s wage-replacement sickness benefits.
- The district court interpreted RUIA’s preemption to cover state ‘‘sickness benefits’’ that function as wage-replacement when an employee is personally unable to work (as RUIA defines a ‘‘day of sickness’’), but not to cover distinct categories like family-care leave or ‘‘safe leave.’n ### Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope of RUIA preemption | RUIA’s unqualified language preempts all state sickness laws as applied to railroad employees | RUIA preempts only state laws that provide sickness benefits similar to RUIA’s wage-replacement program | RUIA preempts state laws that provide wage-replacement for an employee’s own inability to work due to sickness, but not other, substantively different state leave benefits |
| Applicability to California Act paid‑sick‑leave | The California Act’s paid leave for employees’ own illness is preempted | The Act’s leave provisions are broader and do not fall within RUIA’s preemptive domain | The court held the California Act is preempted only insofar as it permits use of paid sick days for the employee’s own illness/injury/pregnancy-related inability to work; other uses survive |
| Presumption against preemption | Presumption should apply because states traditionally regulate sickness benefits | RUIA’s express preemption clause removes the presumption; Congress was clear | The presumption against preemption did not apply because RUIA contains an express preemption clause |
| Severability of surviving provisions | Without a severability clause, invalidate the entire Act as applied to plaintiffs | The preempted language is severable; remaining provisions (family-care and safe leave) stand | The court severed the three words “an employee or” from Cal. Lab. Code §246.5(a)(1), preserving family‑care and safe‑leave provisions for railroad employees |
Key Cases Cited
- CSX Transp. v. Easterwood, 507 U.S. 658 (discusses preemption analysis and plain‑language inquiry)
- Medtronic, Inc. v. Lohr, 518 U.S. 470 (text is primary evidence of congressional preemptive intent)
- Cipollone v. Liggett Group, Inc., 505 U.S. 504 (distinguishing express and implied preemption and presumption against preemption)
- Altria Group, Inc. v. Good, 555 U.S. 70 (express preemption clause limits invocation of presumption against preemption)
- Dillingham Constr. v. California Div. of Labor Standards Enforcement, 519 U.S. 316 (noting states’ traditional role regulating employee benefits)
- Vivid Entm’t, LLC v. Fielding, 774 F.3d 566 (9th Cir.) (California severability principles)