## Facts

- San Francisco enacted the Health Care Security Ordinance to expand access to health care for workers and residents.
- The ordinance required covered employers to make minimum hourly health care expenditures for covered employees, subject to a cap.
- Employers could satisfy the spending requirement through multiple avenues, including purchasing private insurance, reimbursing employees’ health costs, or paying required amounts to a city-administered program or reimbursement account.
- The Golden Gate Restaurant Association, representing restaurant employers, challenged the employer spending requirement as preempted by ERISA.
- The association argued the ordinance either created an ERISA “plan” or impermissibly “related to” existing ERISA plans by effectively forcing employers to adopt or change such plans.

## Issues

1. Whether the ordinance’s employer spending requirement creates an “employee welfare benefit plan” governed by ERISA.
2. Whether the spending requirement has an impermissible “reference to” or “connection with” ERISA plans such that it is preempted under ERISA § 514(a), 29 U.S.C. § 1144(a).
3. Whether the district court properly granted a preliminary injunction based on a likelihood of success on ERISA preemption.

## Decision

- The Ninth Circuit reversed the preliminary injunction and remanded for further proceedings.
- The court held the ordinance’s employer spending requirements were not preempted by ERISA.
- The court concluded the ordinance did not require employers to establish or maintain an ERISA plan because employers could comply by paying the City without adopting or modifying a plan.
- The court found the ordinance did not impermissibly “relate to” ERISA plans because it did not dictate plan benefits or administration and left employers meaningful non-ERISA compliance options.

## Legal Principles

- A law imposing employer payment or spending obligations is not ERISA-preempted merely because it may influence employers’ economic incentives regarding benefits; preemption turns on whether it requires creating or altering an ERISA plan or binds plan administration to particular choices.
- A requirement that can be satisfied through payments to a governmental program, without establishing or maintaining an ongoing administrative scheme by the employer, does not itself create an ERISA plan.
- A local measure is less likely to have an impermissible “connection with” ERISA when it regulates employers as employers, does not mandate specific ERISA plan terms, and permits compliance without changing existing ERISA plans.

## Conclusion

The Ninth Circuit held that San Francisco’s health care spending ordinance fell outside ERISA preemption because it neither created an ERISA plan nor sufficiently interfered with ERISA plan structure or administration, and it vacated the preliminary injunction that had blocked enforcement of the employer spending requirements.


Golden Gate Rest. Ass’n v. City & Cnty. of S.F., 546 F.3d 639 (9th Cir. 2008)