Mass. "Tin Parachute" Law Voided
BY WILLIAM F. SWIGGART
The U.S. Court of Appeals for the First Circuit, in a case of first impression last fall, ruled unenforceable the 1990 Massachusetts Plant Closings Act (a/k/a the "Tin Parachute" law), which required any company operating a facility within the state employing 50 employees or more to pay a "reemployment assistance benefit" to employees terminated during a full or "partial" plant closing.
The court based its ruling upon the view that the mandated payments constituted "employee benefits" under the Employee Retirement Security Act ("ERISA"), and thus fell under that law's preemption.*
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