Preemption and Civic Democracy in the Battle Over Wal-Mart
University of California, Irvine School of Law
Michael M Oswalt
Northern Illinois Law School
September 13, 2010
Minnesota Law Review, Vol. 92, p. 1502, 2008
UC Irvine School of Law Research Paper No. 2008-10
Where Wal-Mart goes, debate over the labor practices of the world's largest retailer seems inevitably to follow. While the company's expansion plans sometimes succeed and sometimes fail, the setting for these disputes rarely changes; the battle over Wal-Mart is fought primarily at the state and local levels. This battle pits activists committed to a 'producerist' vision for the economy where workers are paid well, treated with respect, and have access to affordable health care against Wal-Mart's 'consumerist' economic vision where low prices are the ultimate measure of societal well-being. The important debate over these two competing visions of social and economic welfare can occur in a truly democratic way only at the local level. There, however, the intensely democratic activism and civic dialogue generated by Wal-Mart and its opponents are severely constrained by the legal doctrine of preemption. A federal court ruling that state or local law is preempted not only takes away the power of state and local government to address an issue, it takes away the power of grassroots organizers to engage in democracy's most fundamental behavior: to debate whether and how law should address a social problem and to see organizing efforts made into law. Although much has been written about federal preemption of state and local law, almost no attention has been paid to the effect of preemption on political and civic engagement.
This article explains the importance of local activism against the backdrop of the failure of federal law to constrain Wal-Mart's efforts to lower costs by paying inadequate wages and benefits and to thwart unionization by both legal and illegal tactics. Local activists pursue two common strategies to regulate Wal-Mart: fair-share health care legislation and zoning to exclude large low-wage retailers from a local market. Showing how preemption either derails local organizing (by invalidating fair-share laws) or deforms it (by forcing fights over working conditions into the alien territory of land-use law), we argue against excessively broad interpretation of the preemptive scope of federal law, particularly the Employee Retirement Income Security Act of 1974 (ERISA). ERISA does not preempt local democratic initiatives, such as those recently attempted in Maryland. These initiatives force companies that do not provide adequate wages or health benefits to pay a tax to offset the cost to taxpayers of providing health care and basic social welfare protections to the working poor. We show that the split decision of the United States Court of Appeals for the Fourth Circuit, in "Retail Industry Leaders Ass'n v. Fielder", which found ERISA to preempt the Maryland Fair Share Health Act, was based on an erroneous reading of the Supreme Court's leading ERISA cases. Moving beyond the technical arguments about the scope of ERISA preemption, we argue - based on an extensive literature on theories of organizing and civic democracy - that courts should narrowly construe the scope of federal preemption in the field of low-wage work and affordable health care. We thus bring to the law of preemption a new focus on the extraordinary importance in a democracy of local activism, organizing, and debate over social welfare. In sum, we contend that activists are right to persist in fighting for local democratic initiatives like the Maryland Fair Share Law even in the face of broad federal preemption, and lawyers for progressive local movements can properly find a space within ERISA preemption doctrine to defend the validity of these local initiatives.
Number of Pages in PDF File: 38Accepted Paper Series
Date posted: September 3, 2008 ; Last revised: September 16, 2010
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