The Maryland fair-share policy -- passed by the state legislature last year -- would have required companies that employ 10,000 or more workers to spend at least eight percent of their payroll on employee healthcare or chip in the difference to the state's Medicaid fund.

    The appeals court on Wednesday held that the Maryland law ran counter to a federal law allowing companies to have a uniform system of worker benefits across states, rather than have to face piecemeal, state-by-state regulations, the media said.

    "If permitted to stand, these laws would force Wal-Mart to tailor its healthcare benefit plans to each specific state, and even to specific cities and counties," the appeals court majority wrote. "This is precisely the regulatory balkanization that Congress sought to avoid by enacting ERISA's preemption provision."

    "Not only was this legislation widely viewed as bad public policy, the courts have now confirmed that it violates the law. This politically motivated legislation did nothing to control the costs of, or improve access to, healthcare," said Wal-Mart spokeswoman Kelly Hobbs.

    Wal-Mart, which employs some 1.3 million workers, said 615,000 of them were enrolled in company medical plans as of January 2006.

    (Agencies)