## Facts

- New York’s Human Rights Law prohibited pregnancy-based discrimination in employee benefit plans, and New York officials sought to enforce it against employers.
- New York’s Disability Benefits Law required employers to provide cash disability benefits for nonoccupational disabilities, and New York interpreted the requirement to include pregnancy-related disabilities.
- Several employers and plan administrators maintained ERISA-covered welfare benefit plans that, before the federal Pregnancy Discrimination Act (PDA) took effect, excluded benefits for pregnancy-related disabilities.
- The employers filed declaratory judgment actions claiming ERISA preempted New York’s pregnancy-related requirements as applied to their benefit plans.
- Lower courts held the Human Rights Law was preempted at least to the extent it required pregnancy benefits when federal law did not, and they disagreed about when the Disability Benefits Law could apply in light of ERISA’s exemption for certain state-mandated disability plans.

## Issues

1. Whether New York’s Human Rights Law, as applied to employee benefit plans, is preempted by ERISA § 514(a) as a state law that “relate[s] to” an ERISA plan.
2. Whether New York’s Disability Benefits Law is preempted by ERISA, or instead falls within ERISA § 4(b)(3)’s exclusion for plans maintained solely to comply with state disability insurance laws.
3. Whether ERISA preemption bars state enforcement of antidiscrimination rules to the extent those rules are coextensive with Title VII (as amended by the PDA).

## Decision

- The Court held that both the Human Rights Law and the Disability Benefits Law “relate to” employee benefit plans and therefore fall within ERISA § 514(a)’s preemption clause.
- The Court held the Human Rights Law is preempted only insofar as it prohibits employment practices that are lawful under federal law; it is not preempted to the extent it prohibits conduct that is also unlawful under Title VII (as amended by the PDA).
- The Court held the Disability Benefits Law is not preempted to the extent it is implemented through a separate disability-benefit arrangement maintained solely to comply with the state law and therefore excluded from ERISA by § 4(b)(3).
- The Court affirmed in part and vacated and remanded in part to determine whether employers satisfied the Disability Benefits Law through separate exempt plans or through ERISA-covered multibenefit plans.

## Legal Principles

- ERISA § 514(a) preempts state laws that have a “connection with” or “reference to” an ERISA-covered employee benefit plan; the phrase “relate to” is read broadly.
- A state law that mandates benefit structures or plan administration and specifically targets employee benefit plans “relates to” such plans and is generally preempted.
- ERISA does not preempt state antidiscrimination laws insofar as they prohibit employment practices that are also unlawful under Title VII, preserving the state-agency role contemplated by Title VII’s enforcement scheme.
- Under ERISA § 4(b)(3), a separate plan maintained solely to comply with a state disability insurance law is excluded from ERISA coverage; state regulation of that separate plan is not preempted.
- A state may not directly regulate the benefits structure of an ERISA-covered multibenefit plan, even if the state requirement concerns disability or pregnancy-related benefits.

## Conclusion

The Court construed ERISA’s preemption clause broadly to displace state laws that regulate ERISA plans, while allowing state antidiscrimination enforcement that matches Title VII obligations and allowing state-mandated disability benefits when provided through separate plans maintained solely to comply with state disability insurance laws.


Shaw v. Delta Air Lines, Inc., 463 U.S. 85 (1983)