California Labor and Employment Defense Blog

San Francisco's Health Care Mandate Given Green Light By Appellate Court

The Golden Gate Restaurant Association (GGRA) challenged certain provisions of the newly enacted San Francisco Health Care Security Ordinance, contending that they are preempted by the federal Employee Retirement Income Security Act of 1974 (“ERISA”). Part of the Ordinance was scheduled to go into effect on January 1, 2008. On December 26, 2007, the district court handed the GGRA a win by granting summary judgment in favor for the GGRA and placed a hold on the implementation and enforcement of the disputed provisions of the Ordinance.

However, Defendant City and County of San Francisco and Intervernor labor unions quickly appealed the judgment of the district court. They asked the appellate court to stay the judgment of the district court, thereby allowing the Ordinance to go into effect pending a final decision on the merits of the appeal. On January 9, 2008, in handing San Francisco’s businesses a serious blow, the appellate court agreed with the City and the labor unions and granted a stay of the district court’s judgment, therefore allowing the Ordinance to go into effect. The appellate court’s decision can be read here.

The court stated, “It is clear that otherwise avoidable human suffering, illness, and possibly death will result if a stay is denied.” In making this ruling, the court had to address whether the Golden Gate Restaurant Association would likely prevail on the merits of their case, and found that the city’s arguments in favor of implementing the Ordinate have a “strong likelihood of success on the merits.”

In conclusion, the court stated:
There may be better ways to provide health care than to require private employers to foot the bill. But our task is a narrow one, and it is beyond our province to evaluate the wisdom of the Ordinance now before us. We are asked only whether we should stay the judgment of the district court pending resolution of the appeal on the merits. We conclude that the City and Intervenors have a probability, even a strong likelihood, of success in their argument that the Ordinance is not preempted by ERISA. We further conclude that the balance of hardships tips sharply in favor of the City and the Intervenors. Finally, we conclude that the public interest will be served by a stay. We therefore order that the district court’s judgment be stayed pending resolution of the appeal.
Therefore, employers in San Francisco should ensure that they are taking steps to comply with the new law.   Employers should visit the website established by the City to learn about the requirements of the Ordinance: Healthy San Francisco

Also, the text of the Ordinance can be read here.
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