Fort Halifax Packing Co. v. Coyne

Background

A Maine poultry plant employer closed a Winslow facility in 1981 and laid off over 100 workers. State law §625-B requires one week’s pay for each year worked for employees with at least three years at a plant that employs 100 or more people, subject to limited exceptions. The Maine courts upheld the law after employees and the State’s labor director sued to recover unpaid severance.

Reasoning

The main question was whether federal law blocks the state rule. The Court said ERISA (the federal law regulating employee benefit plans) pre-empts only state rules that create or require an ongoing employee benefit “plan.” Because Maine’s law triggers a one-time lump-sum payment on a single event (a plant closing) and requires no continuing administrative program, the statute does not create a benefit plan subject to ERISA. The Court also held the law does not violate the National Labor Relations Act because it sets a minimum labor standard that does not impermissibly interfere with collective bargaining.

Real world impact

The decision means eligible Maine workers can collect state-ordered lump-sum severance after covered plant closings, and similar state laws are less likely to be wiped out by federal pre-emption claims. The ruling leaves open that parties can still negotiate other severance arrangements by collective bargaining.

Dissents or concurrances

A dissent argued the Court’s “administrative-scheme” test wrongly narrows ERISA and would let States evade federal regulation by labeling mandated benefits as non-administrative.