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Massachusetts v. Morash

490 U.S. 107 (1989)

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Massachusetts v. Morash

United States Supreme Court
490 U.S. 107 (1989)

MJ

Facts

The Commonwealth of Massachusetts (Massachusetts) brought criminal charges against Richard Morash (defendant). Morash was the president of a bank that had a policy of paying employees for unused vacation time out of the bank’s general assets. According to the charges, Morash and the bank failed to compensate two former employees, upon separation, for vacation accrued but not used. Massachusetts alleged that the bank’s noncompensation violated a criminal law that required the payment of wages, similar to laws passed in other jurisdictions. Morash moved to dismiss, arguing that the issue was preempted by the Employee Retirement Income Security Act of 1974 (ERISA). ERISA generally regulated employee benefit plans, including employee welfare benefit plans. ERISA also had a clear preemption provision providing that it preempted any and all state laws relating to employee benefit plans. The trial court referred the matter for appeal, and the Massachusetts Supreme Judicial Court concluded that ERISA preempted the state criminal action. According to that court, the bank’s policy of paying out unused vacation constituted an employee welfare benefit plan under ERISA and was therefore preempted. Massachusetts appealed, and the United States Supreme Court granted certiorari.

Rule of Law

Issue

Holding and Reasoning (Stevens, J.)

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