Term: 2016
Docket: 16-74
Advocate Health Care Network v. Stapleton
- Pro
16-74 ADVOCATE HEALTH CARE V. STAPLETON DECISION BELOW: 817 F.3d 517 CONSOLIDATED WITH 16-86 AND 16-258 FOR ONE HOUR ORAL ARGUMENT. CERT. GRANTED 12/2/2016 QUESTION PRESENTED: The Employee Retirement Income Security Act of 1974 ("ERISA") governs employers that offer pensions and other benefits to their employees. "Church plans" are exempt from ERISA's coverage. 29 U.S.C. §§ 1002(33), 1003(b)(2). For over thirty years, the three federal agencies that administer and enforce ERISA-the Internal Revenue Service, the Department of Labor, and the Pension Benefit Guaranty Corporation-have interpreted the church plan exemption to include pension plans maintained by otherwise qualifying organizations that are associated with or controlled by a church, whether or not a church itself established the plan. The question presented is whether the church plan exemption applies so long as a pension plan is maintained by an otherwise qualifying church- affiliated organization, or whether the exemption applies only if, in addition, a church initially established the plan. LOWER COURT CASE NUMBER: 15-1368
The U.S. Supreme Court case Advocate Health Care Network v. Stapleton, 2016 revolved around the issue of whether church-affiliated hospitals could be exempt from federal laws protecting employee pensions. The employees argued that their employers (three religiously affiliated nonprofit healthcare providers) were not exempt because they did not meet the criteria for a "church plan" as defined by ERISA (Employee Retirement Income Security Act). They claimed that these organizations failed to provide federally guaranteed pension benefits and sought compensation for underfunded plans. However, the court ruled in favor of the health care network with an unanimous decision stating that a pension plan maintained by a principal-purpose organization qualifies as a “church plan,” regardless of who established it initially.
In the case of Advocate Health Care Network v. Stapleton, Justice Sotomayor provided a dissenting opinion. While she agreed with the majority's interpretation of ERISA (Employee Retirement Income Security Act), she expressed concern about its potential implications. She argued that allowing large organizations to avoid their responsibilities under ERISA could jeopardize workers' retirement savings and lead to taxpayers having to shoulder the burden if these plans fail. Furthermore, she pointed out that this ruling could allow many employers who had previously complied with ERISA requirements to now claim exemption as church-affiliated organizations, which was not Congress’s intent when they created exemptions for churches in 1980 amendments.
