Howard Delivery Service, Inc., et al. v. Zurich American Insurance Co. (547 U.S. 651)
U.S. Supreme Court · decided June 15, 2006 · Supreme Court Database (Spaeth)
- Citation
- 547 U.S. 651 · 126 S. Ct. 2105
- Decided
- June 15, 2006
- Term
- October Term 2005
- Vote
- 6–3
- Majority author
- Justice Ginsburg
- Issue area
- Economic Activity
- Disposition
- Vacated and remanded
- Outcome
- Petitioning party won
- Ideological direction
- Liberal
Opinion excerpt
Justice Ginsburg delivered the opinion of the Court. The Bankruptcy Code accords a priority, among unsecured creditors’ claims, for unpaid “wages, salaries, or commissions,” 11 U. S. C. § 507(a)(4)(A), and for unpaid contributions to “an employee benefit plan,” § 507(a)(5). It is uncontested here that § 507(a)(5) covers fringe benefits that complete a pay package — typically pension plans, and group health, life, and disability insurance — whether unilaterally provided by an employer or the result of collective bargaining. This case presents the question whether the § 507(a)(5) priority also encompasses claims for unpaid premiums on a policy purchased by an employer to cover its workers’ compensation liability. We hold that premiums owed by an employer to a workers’ compensation carrier do not fit within § 507(a)(5). Workers’ compensation laws ensure that workers will be compensated for work-related injuries whether or not negligence of the employer contributed to the injury. To that extent, arrangements for the payment of compensation awards might be typed “employee benefit plants].” On the other hand, statutorily prescribed workers’ compensation regimes do not run exclusively to the employees’ benefit. In this regard, they differ from privately ordered, employer-funded pension and welfare plans that, together with wages, remunerate employees for services rendered.…
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