- The Washington Times - Thursday, July 20, 2006

By striking down Maryland’s “Wal-Mart bill,” U.S. District Judge J. Frederick Motz may have saved the state’s reputation in the business community from the legislature’s ill-conceived and self-defeating attempt to interject itself into the Wal-Mart boardroom. The court’s ruling strikes down the legislatures’ efforts to dictate corporate policy for Wal-Mart. And, like the decision last week from Wall Street investment firm Moody’s to downgrade the state’s electric utilities’ rating to nearly junk-bond status, it should come as a rebuke to Maryland Democrats. We hope the damage that would have been done to Maryland’s ability to attract and retain large employers was prevented.

The law, which required Wal-Mart to spend a state-dictated amount on employee health care, foolishly jeopardized the opening of a Wal-Mart distribution center that would add 1,000 jobs in Somerset County on the Eastern Shore, where unemployment is higher than the state average. Gov. Robert Ehrlich — who worked hard to force Democratic lawmakers to understand the repercussions of their bill, and then wisely tried to veto it — should have good reason to hope Wal-Mart will open that facility.

Had the law come into effect, companies with more than 10,000 employees would have been forced to spend at least 8 percent of payroll costs on employee health-care expenses. Even though the state assistant attorney general denied during the trial that the bill specifically targeted Wal-Mart, the discriminatory nature of the bill was clear, even as the General Assembly considered it. Of the four employers that meet that criterion — Wal-Mart Stores Inc., Giant Food Inc., Northrop Grumman Corp. and Johns Hopkins University — only Wal-Mart would have been affected.

Judge Motz, a Reagan appointee, wrote that “the Act violates [the Employment Retirement Income Security Act’s] fundamental purpose of permitting multi-state employers to maintain nationwide health and welfare plans, providing uniform nationwide benefits and permitting uniform national administration.” In other words, big companies in Maryland would have been required to compensate Maryland employees differently than other employees in other states — contradicting federal law, not to mention encouraging those companies to relocate in neighboring states.

This decision is a victory for Maryland, but it should also be considered in the 30 other states that have weighed similar legislation. Beyond encouraging companies to relocate outside of Maryland, the Wal-Mart bill most likely would have also prevented the company from offering alternative high-deductible, low-cost health-care plans, such as health savings accounts.


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