ERIC to Challenge Seattle Hotel Worker’s Ordinance Concerning HealthCare Payments

This fall, the Seattle City Council passed a series of hotel worker ordinances, including one requiring healthcare expenditures by large hotels and ancillary businesses.  The ordinances were passed in lieu of I-124, which faced legal challenges. Meanwhile, in August of 2018, a lawsuit was filed in federal district court by the Employee Retirement Income Security Act (ERISA) Industry Committee (also known as ERIC) challenging the healthcare provisions of I-124 as preempted by the federal ERISA law. Months later, the court stayed the federal case pending the outcome of separate court action against I-124, which was subsequently repealed by the city council.

Wednesday (12/18), ERIC filed a joint motion with the city asking the federal court to lift the stay and enable ERIC to file an amended complaint challenging the new healthcare requirements in the Improving Access to Medical Care for Hotel Employees ordinance (SMC 14.28). ERIC stated it believes the new ordinance continues to violate ERISA preemption. According to the motion,

  • ERIC will file its amended complaint by January 21, 2020;
  • The city will file its response, including a motion to dismiss, 30 days later;
  • ERIC will file its reply to the motion to dismiss, and potentially its own motion for summary judgment, 30 days later;
  • If ERIC files a motion for summary judgment, the city files its response 30 days later, and ERIC files its replay 30 days after.

Based on this proposed schedule, briefing could carry on into the spring with a decision by the court in late spring or summer. An appeal to the Ninth Circuit is likely by the non-prevailing party. Thus, this litigation could go on for an extended period.

Updates will be provided to as developments occur. If you have specific questions please contact John Lane, Director of Local Government Affairs, at johnl@wahospitality.org.

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