In the 1982 case of Shaw v. Delta Air Lines, Inc., the U.S. Supreme Court ruled that state laws regulating employee benefit plans are preempted by federal law under the Employee Retirement Income Security Act (ERISA). The New York State Division of Human Rights had attempted to apply a state law requiring employers to pay for pregnancy-related disability benefits in their employee health insurance plans. However, Delta Air Lines and other airlines argued this was contrary to ERISA's provision which preempts any state laws relating to an employee benefit plan covered by ERISA unless it falls within a specific exception. The court agreed with Delta Airlines' argument, ruling that while states can regulate insurance businesses generally, they cannot specifically dictate what an employer’s health plan must cover if it is subject to ERISA.

In the dissenting opinion for Shaw v. Delta Air Lines, Inc., Justice Brennan argued that the Court's majority decision was a misinterpretation of Section 514 of the Employee Retirement Income Security Act (ERISA). He contended that this section does not preempt state laws prohibiting discrimination in employee benefits plans. According to him, ERISA was intended to protect employees' pension rights and not to shield employers from complying with state anti-discrimination laws. Furthermore, he believed that New York's Human Rights Law did not relate specifically or exclusively to employee benefit plans but broadly prohibited discriminatory practices in employment contracts and conditions. Therefore, it should be exempted from preemption under ERISA as per its saving clause which excludes any law regulating insurance from being superseded by federal law.