Massachusetts v. Morash (1988)
- Docket
- 88-32
- Decided
- 1988-01-01
Summary
Question: (1) Does a company’s policy of paying its discharged employees for their unused vacation time constitute an employee welfare benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 (ERISA)? (2) Does ERISA’s broad pre-emption provision foreclose a criminal action to enforce that policy? Conclusion: No, no. Justice John Paul Stevens delivered the opinion of the unanimous Court which held that a policy of paying discharged employees for their unused vacation time does not constitute an employee welfare benefit plan within the meaning of ERISA, and that ERISA’s provisions do not foreclose a criminal action to enforce that policy. The employment welfare benefit plan is not meant to relate to ordinary vacation pay, but rather to include vacation benefit funds that accumulate over a period of time. The bank payment is not an employee welfare benefit plan just because the employees did not use their vacation days prior to their termination.