ERISA-Sixth Circuit Holds That An Ordinance of the City of Cincinnati Is Not Preempted By ERISA

In Allied Construction Industries v. City of Cincinnati, Nos. 16-4248/4249  (6th Cir. 2018), the City of Cincinnati  (the “City”) and Laborers International Union of North America, Local 265 (“the Union”) appeal the district court’s grant of summary judgment to Allied Construction Industries (“Allied Construction”), and the denial of the City’s and the Union’s motions for summary judgment. The district court held that three City ordinance provisions (“the Ordinance”) concerning bidder specifications for certain City projects were preempted by ERISA.

In this case, the Ordinance provides guidelines for selecting the lowest and best bidder on City Department of Sewers and Water Works projects. The portion of the Ordinance potentially subject to preemption was a requirement that the bidder certify whether it contributes to a health care plan, pension plan or retirement plan for employees that would work on the project.

In analyzing the case, the Sixth Circuit Court of Appeals (the “Court”) held that the City was acting as a market participant attempting to purchase goods and services, not as a regulator, in enacting the Ordinance.  As such, the provisions of the Ordinance are not preempted by ERISA. Accordingly, the Court reversed the holding of the district court.

 

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