updated 2/8/2006 8:34:27 AM ET 2006-02-08T13:34:27

Retailers are concerned that state and local laws requiring companies to spend more on workers' healthcare could become a trend. Now they're seeking to send a message to elected officials around the country who are considering such bills.

A trade group filed two lawsuits Tuesday against so-called "fair share" healthcare laws, seeking to block state and local governments from enforcing them. But the store owners' attention is clearly on the agendas of legislatures in at least 30 states, where unions say lawmakers could consider bills similar to those passed in Maryland and Suffolk County, N.Y.

"We certainly hope that the other states ... will pause and look at what we're doing in Maryland and Suffolk County and consider that these are unwise and unlawful laws," said Sandy Kennedy, president of the Retail Industry Leaders Association, which filed the lawsuits.

Unions and health care advocates are pushing for mandates patterned after the Maryland law, which requires companies with more than 10,000 employees in the state to spend at least 8 percent of payroll on healthcare or contribute the difference to the state Medicaid fund.

Wal-Mart, based in Bentonville, Ark., is the only company in Maryland of that size that doesn't meet the 8 percent threshold. Backers of the law said it was needed because some Wal-Mart employees rely on taxpayer-funded Medicaid health coverage.

The company supports the lawsuits because healthcare benefits should be mandated by the federal government, not the states, said Dan Fogleman, a Wal-Mart spokesman.

"We believe that the healthcare challenges facing our country are a national challenge that require national solutions," Fogleman said.

The lawsuit argues that state and local governments are not allowed to mandate levels of health care coverage by private companies. Both lawsuits ask federal judges to grant injunctions to prevent enforcement of the laws.

"States may not mandate benefits for private employers," said W. Stephen Cannon, a lawyer representing the Arlington, Va.-based retail group.

The organization represents more than 400 companies that operate a total of more than 100,000 stores with more than $1.4 trillion in annual sales, including Wal-Mart. Kennedy said Wal-Mart has a seat on RILA's board, but that other board members joined in authorizing the lawsuits.

The RILA lawsuit argues that Maryland's law "arbitrarily singles out one company for discriminatory treatment."

Several other states, including West Virginia and Washington, have begun discussing whether Wal-Mart should be required to pay more for healthcare. Union leaders who pushed Maryland's bill have said at least 30 states may use Maryland's law as a template.

A supporter of the Maryland law, Progressive Maryland, criticized retailers for suing over the change.

"It's desperado time for the world's biggest corporation," said Sean Dobson, head of Progressive Maryland. "The people's elected representatives imposed responsibility on Wal-Mart, and now they're trying to undo it with their squadrons of lawyers and their infinitely deep pockets."

After hearing of the lawsuit, Republican Gov. Robert Ehrlich called the Wal-Mart law "ridiculous" and said he wasn't surprised by the lawsuit. Ehrlich vetoed the bill, but the legislature overrode his veto last month.

"It's yet another chapter in a negative story for Maryland," Ehrlich said.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Discussion comments


Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
Cash Back Cards 17.80%
Rewards Cards 17.18%
Source: Bankrate.com