HOWARD DELIVERY SERVICE, INC., et al. v. ZURICH AMERICAN INSURANCE CO.

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651 OCTOBER TERM, 2005
Syllabus
HOWARD DELIVERY SERVICE, INC., et al. v. ZURICH
AMERICAN INSURANCE CO.
certiorari to the united states court of appeals for
the fourth circuit
No. 05–128. Argued March 21, 2006—Decided June 15, 2006
The Bankruptcy Code accords priorities, 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). Petitioner Howard Delivery Service, Inc. (Howard),
was required by each State in which it operated to maintain workers’
compensation coverage to secure its employees’ receipt of health, dis
ability, and death benefits in the event of on-the-job accidents. Howard
contracted with respondent Zurich American Insurance Co. (Zurich) to
provide this insurance for Howard’s operations in ten States. After
Howard filed a Chapter 11 bankruptcy petition, Zurich filed an unse
cured creditor’s claim for some $400,000 in premiums, asserting that
they qualified as “contributions to an employee benefit plan” entitled to
priority under § 507(a)(5). The Bankruptcy Court denied priority sta
tus to the claim, reasoning that because overdue premiums do not qual
ify as bargained-for benefits furnished in lieu of increased wages, they
fall outside § 507(a)(5)’s compass. The District Court affirmed, similarly
determining that unpaid workers’ compensation premiums do not share
the priority provided for unpaid contributions to employee pension and
health plans. A Fourth Circuit panel reversed without agreeing on a
rationale.
Held: Insurance carriers’ claims for unpaid workers’ compensation premi
ums owed by an employer fall outside the priority allowed by § 507(a)(5).
Although the question is close, such premiums are more appropriately
bracketed with liability insurance premiums for, e. g., motor vehicle, fire,
or theft insurance, than with contributions made for fringe benefits that
complete a pay package, e. g., pension plans and group health, life, and
disability insurance, which undisputedly are covered by § 507(a)(5).
United States v. Embassy Restaurant, Inc., 359 U. S. 29, 29–35, and
Joint Industry Bd. of Elec. Industry v. United States, 391 U. S. 224,
228–229, held that an employer’s unpaid contributions to collectively
bargained plans providing, respectively, life insurance and annuity
benefits to employees did not qualify as “wages” entitled to priority
status under the prior bankruptcy law. Congress thereafter enacted

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652 HOWARD DELIVERY SERVICE, INC. v.
ZURICH AMERICAN INS. CO.
Syllabus
what is now § 507(a)(5) in order to provide a priority for the kind of
fringe benefits at issue in those cases. Notably, Congress did not en
large the “wages, salaries, [and] commissions” priority, § 507(a)(4)(A), to
include fringe benefits, but instead created a new priority, § 507(a)(5),
one step lower than the wage priority. The new provision allows a plan
provider to recover unpaid premiums—albeit only after the employees’
claims for “wages, salaries, or commissions” have been paid. The cur
rent Code’s juxtaposition of the wages and employee benefit plan priori
ties manifests Congress’ comprehension that fringe benefits generally
complement, or substitute for, hourly pay. Congress tightened the link
age of § 507(a)(4) and (a)(5) by imposing a combined cap on the two prior
ities, currently set at $10,000 per employee. See § 507(a)(5)(B). Be
cause § 507(a)(4) has a higher priority status, all claims for wages are
paid first, up to the $10,000 limit; claims under § 507(a)(5) for benefit
plan contributions can be recovered next up to the remainder of the
$10,000 ceiling. No other § 507 subsections are so joined together.
Apart from the clues provided by Embassy Restaurant, Joint Indus
try Bd., and the textual ties binding § 507(a)(4) and (5), Congress left
undefined the § 507(a)(5) terms, “contributions to an employee benefit
plan . . . arising from services rendered.” (Emphasis added.) Main
taining that § 507(a)(5) covers more than wage substitutes like the ones
at issue in Embassy Restaurant and Joint Industry Bd., Zurich urges
the Court to borrow the encompassing definition of employee benefit
plan contained in the Employee Retirement Income Security Act of 1974
(ERISA): “[A]ny plan, fund, or program [that provides] its participants
. . . , through the purchase of insurance or otherwise, . . . benefits in the
event of sickness, accident, disability, [or] death.” 29 U. S. C. § 1002(1).
Federal courts have questioned whether ERISA is appropriately used
to fill in blanks in a Bankruptcy Code provision, and the panel below
parted ways on this issue. In any event, ERISA’s signals are mixed,
for § 1003(b)(3) specifically exempts from ERISA’s coverage the genre
of plan here at issue, i. e., one “maintained solely for the purpose of
complying with applicable work[ers’] compensation laws.” That exemp
tion strengthens the Court’s resistance to Zurich’s argument. Rather,
the Court follows United States v. Reorganized CF&I Fabricators of
Utah, Inc., 518 U. S. 213, 219, in noting that “[h]ere and there in the
Bankruptcy Code Congress has included specific directions that estab
lish the significance for bankruptcy law of a term used elsewhere in the
federal statutes.” Id., at 219–220. No such directions are contained in
§ 507(a)(5), and the Court has no warrant to write them into the text.
This case turns instead on the essential character of workers’ compen
sation regimes. Unlike pension plans or group life, health, and disabil
ity insurance—negotiated or granted to supplement, or substitute for,

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Syllabus
wages—workers’ compensation prescriptions modify, or substitute for,
the common-law tort liability to which employers were exposed for
work-related accidents. Workers’ compensation regimes provide some
thing for employees, ensuring limited fixed payments for on-the-job in
juries, and something for employers, removing the risk of large judg
ments and heavy costs in tort litigation. No such tradeoff is involved
in employer-sponsored fringe benefit plans. Moreover, employer
sponsored pension and health plans characteristically insure the em
ployee (or his survivor) only. In contrast, workers’ compensation insur
ance shields the insured enterprise. When an employer fails to secure
workers’ compensation coverage, or loses coverage for nonpayment of
premiums, an affected employee’s remedy would not lie in a suit for
premiums that should have been paid to a compensation carrier. In
stead, employees who sustain work-related injuries commonly have re
course to a state-maintained fund or are authorized by state law to pur
sue the larger recoveries successful tort litigation ordinarily yields.
Further distancing workers’ compensation and fringe benefits, nearly
all States require employers to participate in workers’ compensation,
with substantial penalties, even criminal liability, for failure to do so.
It is relevant, although not dispositive, that States overwhelmingly pre
scribe and regulate insurance coverage for on-the-job accidents, while
commonly leaving fringe benefits to private ordering.
Zurich’s argument that according its claim a § 507(a)(5) priority will
give workers’ compensation carriers an incentive to continue coverage
of a failing enterprise, thus promoting rehabilitation of the business, is
unpersuasive. Rather than speculating on how such insurers might
react were they to be granted a § 507(a)(5) priority, the Court is guided
by the Bankruptcy Code’s objective of securing equal distribution
among creditors, see, e. g., Kothe v. R. C. Taylor Trust, 280 U. S. 224,
227, and by the corollary principle that preference provisions must be
tightly construed, see, e. g., ibid. Cases like Zurich’s are illustrative.
The Bankruptcy Code caps the amount recoverable for contributions
to employee benefit plans. Opening the § 507(a)(5) priority to workers’
compensation carriers could shrink the amount available to cover unpaid
contributions to plans paradigmatically qualifying as wage surrogates,
primarily pension and health benefit plans. Pp. 657–668.
403 F. 3d 228, reversed and remanded.
Ginsburg, J., delivered the opinion of the Court, in which Roberts,
C. J., and Stevens, Scalia, Thomas, and Breyer, JJ., joined. Ken
nedy, J., filed a dissenting opinion, in which Souter and Alito, JJ., joined,
post, p. 668.

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654 HOWARD DELIVERY SERVICE, INC. v.
ZURICH AMERICAN INS. CO.
Opinion of the Court
Paul F. Strain argued the cause for petitioners. On the
briefs were Richard M. Francis, Heather G. Harlan, Law
rence A. Katz, and Mitchell Y. Mirviss.
Donald B. Verrilli, Jr., argued the cause for respondent.
With him on the brief were William M. Hohengarten, Elaine
J. Goldenberg, Barbara S. Steiner, Daniel R. Murray,
Margaret M. Anderson, Hugh S. Balsam, and Karen Lee
Turner.*
Justice Ginsburg delivered the opinion of the Court.
The Bankruptcy Code accords a priority, among unsecured
creditors’ claims, for unpaid “wages, salaries, or commis
sions,” 11 U. S. C. § 507(a)(4)(A), and for unpaid contri
butions to “an employee benefit plan,” § 507(a)(5).1 It is un
contested 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 bar
gaining. This case presents the question whether the
*Donald J. Capuano and John M. McIntire filed a brief for the National
Coordinating Committee for Multiemployer Plans as amicus curiae urg
ing reversal.
G. Eric Brunstad, Jr., Rheba Rutkowski, and William C. Heuer filed a
brief for the American Home Assurance Co. et al. as amici curiae urging
affirmance.
1 All references to provisions of the Bankruptcy Code use the current
numbering. At the time respondent Zurich American Insurance Com
pany (Zurich) claimed priority treatment for unpaid workers’ compensa
tion premiums, the relevant subsections were numbered (a)(3) (wages) and
(a)(4) (employee benefit plans). The Bankruptcy Abuse Prevention and
Consumer Protection Act of 2005, Pub. L. 109–8, § 212(2), 119 Stat. 51,
altered the priority list so that (a)(3) became (a)(4), and (a)(4) became
(a)(5). The only other statutory change relevant here concerns the dollar
amount accorded priority status under current § 507(a)(4) and (a)(5).
When Zurich filed its proof of claim, the total sum allowed under those
two subsections was $4,650 for each employee, see note following 11
U. S. C. § 104 (2000 ed., Supp. III). That ceiling has since been raised,
pursuant to § 104, to $10,000 per employee, 11 U. S. C. A. § 507(a)(5)(B)(i)
(Supp. 2006).

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Opinion of the Court
§ 507(a)(5) priority also encompasses claims for unpaid premi
ums on a policy purchased by an employer to cover its work
ers’ 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 negli
gence of the employer contributed to the injury. To that
extent, arrangements for the payment of compensation
awards might be typed “employee benefit plan[s].” On the
other hand, statutorily prescribed workers’ compensation re
gimes 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. Employers,
too, gain from workers’ compensation prescriptions. In ex
change for no-fault liability, employers gain immunity from
tort actions that might yield damages many times higher
than awards payable under workers’ compensation sched
ules. Although the question is close, we conclude that pre
miums paid for workers’ compensation insurance are more
appropriately bracketed with premiums paid for other liabil
ity insurance, e. g., motor vehicle, fire, or theft insurance,
than with contributions made to secure employee retirement,
health, and disability benefits.
In holding that claims for workers’ compensation insurance
premiums do not qualify for § 507(a)(5) priority, we are mind
ful that the Bankruptcy Code aims, in the main, to secure
equal distribution among creditors. See Kothe v. R. C. Tay
lor Trust, 280 U. S. 224, 227 (1930); Kuehner v. Irving Trust
Co., 299 U. S. 445, 451 (1937). We take into account, as well,
the complementary principle that preferential treatment of
a class of creditors is in order only when clearly authorized
by Congress. See Nathanson v. NLRB, 344 U. S. 25, 29
(1952); United States v. Embassy Restaurant, Inc., 359 U. S.
29, 31 (1959).

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656 HOWARD DELIVERY SERVICE, INC. v.
ZURICH AMERICAN INS. CO.
Opinion of the Court
I
Petitioner Howard Delivery Service, Inc. (Howard), for
many years owned and operated a freight trucking business.
Howard employed as many as 480 workers and operated in
about a dozen States. Each of those States required How
ard to maintain workers’ compensation coverage to secure
its employees’ receipt of health, disability, and death benefits
in the event of on-the-job accidents. Howard contracted
with Zurich to provide this insurance for Howard’s opera
tions in ten States.
On January 30, 2002, Howard filed a Chapter 11 bank
ruptcy petition. Zurich filed an unsecured creditor’s claim
in that proceeding, seeking priority status for some $400,000
in unpaid workers’ compensation premiums. In an amended
proof of claim, Zurich asserted that these unpaid premiums
qualified as “[c]ontributions to an employee benefit plan”
entitled to priority under § 507(a)(5). App. 32a.2 The Bank
ruptcy Court denied priority status to Zurich’s claim, reason
ing that the overdue premiums do not qualify as bargained
for benefits furnished in lieu of increased wages, hence they
fall outside § 507(a)(5)’s compass. App. to Pet. for Cert. 51a–
57a. The District Court affirmed, similarly determining
that unpaid workers’ compensation premiums do not share
the priority provided for unpaid contributions to employee
pension and health plans. Id., at 39a–50a.
The Court of Appeals for the Fourth Circuit reversed 2 to
1 in a per curiam opinion. 403 F. 3d 228 (2005). The judges
in the majority, however, disagreed on the rationale. Judge
King concluded that § 507(a)(5) unambiguously accorded pri
ority status to claims for unpaid workers’ compensation pre
2 In its initial proof of claim, Zurich did not check the box marked “Con
tributions to an employee benefit plan,” but instead checked a box marked
“Other,” and wrote in “Administrative Expense—Insurance Premiums.”
App. 22a, 30a. Zurich does not argue here that the workers’ compensa
tion premiums owed by Howard qualify as administrative expenses enti
tled to priority under § 507(a)(2).

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miums. Id., at 237. Judge Shedd, concurring in the judg
ment, found the § 507(a)(5) phrase “employee benefit plan”
ambiguous. Looking to legislative history, he concluded
that Congress likely intended to give past due workers’ com
pensation premiums priority status. Id., at 238–239. In
dissent, Judge Niemeyer, like Judge King, relied on the
“plain meaning” of § 507(a)(5), but read the provision un
equivocally to deny priority status to an insurer’s claim for
unpaid workers’ compensation premiums. Id., at 241–244.
We granted certiorari, 546 U. S. 1002 (2005), to resolve a
split among the Circuits concerning the priority status of
premiums owed by a bankrupt employer to a workers’ com
pensation carrier. Compare In re Birmingham-Nashville
Express, Inc., 224 F. 3d 511, 517 (CA6 2000) (denying priority
status to unpaid workers’ compensation premiums), In re
Southern Star Foods, Inc., 144 F. 3d 712, 717 (CA10 1998)
(same), and In re HLM Corp., 62 F. 3d 224, 226–227 (CA8
1995) (same), with Employers Ins. of Wausau v. Plaid Pan
tries, Inc., 10 F. 3d 605, 607 (CA9 1993) (according priority
status), and 403 F. 3d, at 229 (case below) (same).3
II
Adjoining subsections of the Bankruptcy Code, § 507(a)(4)
and (5), are centrally involved in this case. Subsections
507(a)(4) and (5) currently provide:
3 We have jurisdiction of this case, as did the Court of Appeals, because
the District Court’s ruling qualifies as a final decision under 28 U. S. C.
§ 158(d). See 403 F. 3d, at 231, and n. 6 (District Court’s ruling effectively
concluded the dispute between Zurich and Howard, for the adverse deci
sion rendered Zurich’s claim valueless and Zurich agreed to withdraw the
claim if it failed to prevail on appeal). See also In re Saco Local Develop
ment Corp., 711 F. 2d 441, 444 (CA1 1983) (majority opinion of Breyer,
J.) (“Congress has long provided that orders in bankruptcy cases may be
immediately appealed if they finally dispose of discrete disputes within
the larger case—and in particular, it has long provided that orders finally
settling creditors’ claims are separately appealable.”).

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658 HOWARD DELIVERY SERVICE, INC. v.
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Opinion of the Court
“(a) The following expenses and claims have priority
in the following order:
. . . . .
“(4) Fourth, allowed unsecured claims . . . for—
“(A) wages, salaries, or commissions, including va
cation, severance, and sick leave pay earned by an
individual . . . .
. . . . .
“(5) Fifth, allowed unsecured claims for contributions
to an employee benefit plan—
“(A) arising from services rendered within 180 days
before the date of the filing of the [bankruptcy] petition
or the date of the cessation of the debtor’s business,
whichever occurs first . . . .” 11 U. S. C. § 507.
Two decisions of this Court, United States v. Embassy
Restaurant, Inc., 359 U. S. 29 (1959), and Joint Industry Bd.
of Elec. Industry v. United States, 391 U. S. 224 (1968),
prompted the enactment of § 507(a)(5). Embassy Restau
rant concerned a provision of the 1898 Bankruptcy Act that
granted priority status to “wages” but said nothing of “em
ployee benefits plans” or anything similar. 11 U. S. C.
§ 104(a)(2) (1952 ed., Supp. V; repealed 1978). We held that a
debtor’s unpaid contributions to a union welfare plan—which
provided life insurance, weekly sick benefits, hospital and
surgical benefits, and other advantages—did not qualify
within the priority for unpaid “wages.” 359 U. S., at 29–35.
In Joint Industry Bd., we followed Embassy Restaurant and
held that an employer’s bargained-for contributions to an
employees’ annuity plan did not qualify as “wages” entitled
to priority status. 391 U. S., at 228–229.
To provide a priority for fringe benefits of the kind at issue
in Embassy Restaurant and Joint Industry Bd., Congress
added what is now § 507(a)(5) when it amended the Bank
ruptcy Act in 1978. See H. R. Rep. No. 95–595, p. 187 (1977)
(hereinafter H. R. Rep.) (explaining that the amendment cov

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Opinion of the Court
ers “health insurance programs, life insurance plans, pension
funds, and all other forms of employee compensation that
[are] not in the form of wages”); S. Rep. No. 95–989, p. 69
(1978). Notably, Congress did not enlarge the “wages, sala
ries, [and] commissions” priority, § 507(a)(4), to include fringe
benefits. Instead, Congress created a new priority for such
benefits, one step lower than the wage priority. The new
provision, currently contained in § 507(a)(5), allows the pro
vider of an employee benefit plan to recover unpaid pre
miums—albeit only after the employees’ claims for “wages,
salaries, or commissions” have been paid. § 507(a)(4).
Beyond genuine debate, the main office of § 507(a)(5) is to
capture portions of employee compensation for services ren
dered not covered by § 507(a)(4). Cf. Embassy Restaurant,
359 U. S., at 35; Joint Industry Bd., 391 U. S., at 228–229
(both emphasizing Congress’ prerogative in this regard).
The current Code’s juxtaposition of the wages and employee
benefit plan priorities manifests Congress’ comprehension
that fringe benefits generally complement, or “substitute”
for, hourly pay. See H. R. Rep., at 357 (noting “the realities
of labor contract negotiations, under which wage demands
are often reduced if adequate fringe benefits are substi
tuted”); id., at 187 (“[T]o ignore the reality of collective bar
gaining that often trades wage dollars for fringe benefits
does a severe disservice to those working for a failing enter
prise.”); In re Saco Local Development Corp., 711 F. 2d 441,
449 (CA1 1983) (majority opinion of Breyer, J.) (substitution
of fringe benefits for wages “can normally be assumed, unless
the employer is a philanthropist”).
Congress tightened the linkage of subsections (a)(4) and
(a)(5) by imposing a combined cap on the two priorities, cur
rently set at $10,000 per employee. See § 507(a)(5)(B).4 Be
4 Section 507(a)(5)(B) provides:
“(a) The following expenses and claims have priority in the following
order:
. . . . .

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660 HOWARD DELIVERY SERVICE, INC. v.
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Opinion of the Court
cause (a)(4) has a higher priority status, all claims for wages
are paid first, up to the $10,000 limit; claims under (a)(5) for
contributions to employee benefit plans can be recovered
next up to the remainder of the $10,000 ceiling. No other
subsections of § 507 are joined together by a common cap
in this way.
Putting aside the clues provided by Embassy Restaurant,
Joint Industry Bd., and the textual ties binding § 507(a)(4)
and (5), we recognize that Congress left undefined the
§ 507(a)(5) terms: “contributions to an employee benefit plan
. . . arising from services rendered within 180 days before the
date of the filing of the [bankruptcy] petition.” (Emphasis
added.) Maintaining that subsection (a)(5) covers more than
wage substitutes of the kind at issue in Embassy Restaurant
and Joint Industry Bd., Zurich urges the Court to borrow
the encompassing definition of employee benefit plan con
tained in the Employee Retirement Income Security Act of
1974 (ERISA), 88 Stat. 829, as amended, 29 U. S. C. § 1001
et seq. (2000 ed. and Supp. III). See § 1002(1) (term “em
ployee welfare benefit plan” means, inter alia, “any plan,
fund, or program [that provides] its participants or their ben
eficiaries, through the purchase of insurance or otherwise,
. . . benefits in the event of sickness, accident, disability,
death or unemployment”); § 1002(3) (term “employee benefit
plan . . . means an employee welfare benefit plan or an em
ployee pension benefit plan or a plan which is both an em
ployee welfare benefit plan and an employee pension benefit
“(5) Fifth, allowed unsecured claims for contributions to an employee
benefit plan—
. . . . .
“(B) for each such plan, to the extent of—
“(i) the number of employees covered by each such plan multiplied by
$10,000; less
“(ii) the aggregate amount paid to such employees under paragraph
(4) of this subsection, plus the aggregate amount paid by the estate
on behalf of such employees to any other employee benefit plan.” 11
U. S. C. § 507.

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Opinion of the Court
plan”); cf. § 1003(b)(3) (excluding plans “maintained solely for
the purpose of complying with applicable work[ers’] compen
sation laws or unemployment compensation or disability in
surance laws”). The dissent endorses this borrowing. See
post, at 676.
Federal courts have questioned whether ERISA is appro
priately used to fill in blanks in a Bankruptcy Code provision,
and the panel below parted ways on this issue. See 403
F. 3d, at 235, n. 9 (King, J., concurring in judgment) (“de
clin[ing] to rely upon the ERISA definition”); id., at 239–241
(Shedd, J., concurring in judgment) (reading legislative his
tory to indicate that Congress intended “ ‘employee bene
fit plan’ in the bankruptcy priority provision to have the
same meaning that [the term] has in ERISA”); id., at
245 (Niemeyer, J., dissenting) (maintaining that ERISA
definition is inapt in Bankruptcy Code priority context);
cf. Birmingham-Nashville Express, 224 F. 3d, at 516–517
(noting division of opinion but concluding that decisions re
jecting incorporation of ERISA’s “employee benefit plan”
definition into § 507(a)(5) “ha[ve] the better of the argu
ment”); HLM Corp., 62 F. 3d, at 226 (“[T]he ERISA defini
tion and associated court guidelines were designed to effec
tuate the purpose of ERISA, not the Bankruptcy Code.”
(internal quotation marks omitted)); Southern Star Foods,
144 F. 3d, at 714 (same). Compare Brief for American Home
Assurance Company et al. as Amici Curiae 17–25 (legisla
tive history suggests Congress intended to incorporate
ERISA definition) with Brief for National Coordinating
Committee for Multiemployer Plans as Amicus Curiae 22–
27, and n. 21 (legislative history suggests Congress did not
intend to incorporate ERISA definition).
ERISA’s omnibus definition does show, at least, that the
term “employee welfare benefit plan” is susceptible of a con
struction that would include workers’ compensation plans.
That Act’s signals are mixed, however, for 29 U. S. C.
§ 1003(b)(3) specifically exempts from ERISA’s coverage the

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662 HOWARD DELIVERY SERVICE, INC. v.
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Opinion of the Court
genre of plan here at issue, i. e., one “maintained solely for
the purpose of complying with applicable work[ers’] compen
sation laws.” 5 The § 1003(b)(3) exemption strengthens our
resistance to Zurich’s argument. We follow the lead of an
earlier decision, United States v. Reorganized CF&I Fabri
cators of Utah, Inc., 518 U. S. 213, 219 (1996), in noting that
“[h]ere and there in the Bankruptcy Code Congress has in
cluded specific directions that establish the significance for
bankruptcy law of a term used elsewhere in the federal stat
utes.” Id., at 219–220. No such directions are contained
in § 507(a)(5), and we have no warrant to write them into
the text.
This case turns, we hold, not on a definition borrowed from
a statute designed without bankruptcy in mind, but on the
essential character of workers’ compensation regimes. Un
like pension provisions or group life, health, and disability
insurance plans—negotiated or granted as pay supplements
or substitutes—workers’ compensation prescriptions have a
dominant employer-oriented thrust: They modify, or substi
tute for, the common-law tort liability to which employers
were exposed for work-related accidents. See 6 A. Lar
son & L. Larson, Workers’ Compensation Law § 100.01[1],
pp. 100–2 to 100–3 (2005) (hereinafter Larson & Larson); 4 J.
Lee & B. Lindahl, Modern Tort Law: Liability and Litigation
§ 43:25, pp. 43–45 to 43–46 (2d ed. 2003). As typically
explained:
“The invention of workers compensation as it has ex
isted in this country since about 1910 involves a clas
sic social trade-off or, to use a Latin term, a quid pro
5 Congress also excluded most workers’ compensation benefits from the
purview of the Davis-Bacon Act, 40 U. S. C. § 3141(2) (2000 ed., Supp. III),
a measure that fixes a floor under wages on Government projects. The
Davis-Bacon Act incorporates “bona fide fringe benefits,” broadly defined,
into prevailing wage determinations, but specifically excludes benefits
contractors are required to provide under federal, state, or local law.
§ 3141(2)(B).

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quo. . . . What is given to the injured employee is the
right to receive certain limited benefits regardless of
fault, that is, even in cases in which the employee is
partially or entirely at fault, or when there is no fault
on anyone’s part. What is taken away is the employee’s
right to recover full tort damages, including damages for
pain and suffering, in cases in which there is fault on the
employer’s part.” P. Lencsis, Workers Compensation:
A Reference and Guide 9 (1998) (hereinafter Lencsis).
Workers’ compensation regimes thus provide something
for employees—they ensure limited fixed payments for on
the-job injuries—and something for employers—they re
move the risk of large judgments and heavy costs generated
by tort litigation. See 6 Larson & Larson § 100.03[1],
at 100–11 (“[Workers’ compensation] relieves the employer
not only of common-law tort liability, but also of statutory
liability under virtually all state statutes, as well as of liabil
ity in contract and in admiralty, for an injury covered by the
compensation act.” (footnote omitted)); Lubove, Workmen’s
Compensation and the Prerogatives of Voluntarism, 8 Lab.
Hist. 254, 258–262 (Fall 1967) (workers’ compensation pro
grams were adopted by nearly every State in large part be
cause employers anticipated significant benefits from the
programs; other programs workers’ groups sought to make
mandatory—notably, health insurance—were not similarly
embraced). No such tradeoff is involved in fringe benefit
plans that augment each covered worker’s hourly pay.6
6 Providing health care to workers fosters a healthy and happy work
force, and a contented work force benefits employers. The dissent sug
gests this as a reason to rank workers’ compensation insurance with health
and pension plans for bankruptcy priority purposes. See post, at 672.
But the benefit employers gain from providing health and pension plans
for their employees is of a secondary order; indeed, under the dissent’s
logic, wages could be said to “benefit” the employer because they ensure
that employees come to work, can afford transportation to the jobsite,
etc. These benefits redound to the employer reflexively, as a consequence

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664 HOWARD DELIVERY SERVICE, INC. v.
ZURICH AMERICAN INS. CO.
Opinion of the Court
Employer-sponsored pension plans, and group health or
life insurance plans, characteristically insure the employee
(or his survivor) only. In contrast, workers’ compensation
insurance, in common with other liability insurance in this
regard, e. g., fire, theft, and motor vehicle insurance, shield
the insured enterprise: Workers’ compensation policies both
protect the employer-policyholder from liability in tort, and
cover its obligation to pay workers’ compensation benefits.
See In re HLM Corp., 165 B. R. 38, 41 (Bkrtcy. Ct. Minn.
1994). When an employer fails to secure workers’ compen
sation coverage, or loses coverage for nonpayment of premi
ums, an affected employee’s remedy would not lie in a suit
for premiums that should have been paid to a compensation
carrier. Instead, employees who sustain work-related inju
ries would commonly have recourse to a state-maintained
fund. See, e. g., Minn. Stat. § 176.183, subd. 1 (2004); N. Y.
Work. Comp. Law Ann. § 26–a (West Supp. 2006). Or, in lieu
of the limited benefits obtainable from a state fund under
workers’ compensation schedules, the injured employee
might be authorized to pursue the larger recoveries success
ful tort litigation ordinarily yields. See, e. g., id., § 11 (West
2005); W. Va. Code § 23–2–8 (Lexis 2005); Lencsis 67.
Further distancing workers’ compensation arrangements
from bargained-for or voluntarily accorded fringe benefits,
nearly all States, with limited exceptions, require employers
to participate in their workers’ compensation systems. See,
e. g., Ill. Comp. Stat., ch. 820, § 305/4 (West 2004); Minn. Stat.
§ 176.181, subd. 2 (2004); U. S. Dept. of Labor, Office of Work
ers’ Compensation, State Workers’ Compensation Laws,
Table 1: Type of Law and Insurance Requirements for Pri
vate Employment (2005), online at http://www.dol.gov/esa/
regs/statutes/owcp/stwclaw/tables-pdf/table1.pdf (as visited
of the benefit to the employee. Workers’ compensation insurance, by con
trast, directly benefits insured employers by eliminating their tort liability
for workplace accidents.

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665 Cite as: 547 U. S. 651 (2006)
Opinion of the Court
June 13, 2006, and available in Clerk of Court’s case file).
An employer who fails to secure the mandatory coverage is
subject to substantial penalties, even criminal liability. We
do not suggest, as the dissent hypothesizes, see post, at 674,
that a compensation carrier would gain § 507(a)(5) priority
for unpaid premiums in States where workers’ compensation
coverage is elective. Nor do we suggest that wage surro
gates or supplements, e. g., pension and health benefits plans,
would lose protection under § 507(a)(5) if a State were to
mandate them. We simply count it a factor relevant to our
assessment that States overwhelmingly prescribe and regu
late insurance coverage for on-the-job accidents, while com
monly leaving pension, health, and life insurance plans to pri
vate ordering.7
We note that when the Fourth Circuit confronted a claim
for workers’ compensation premiums owed not to a private
insurer but to a state fund, that court ranked the premiums
as “excise taxes” qualifying for bankruptcy priority under
what is now § 507(a)(8)(E). See New Neighborhoods, Inc. v.
West Virginia Workers’ Comp. Fund, 886 F. 2d 714, 718–720
(1989).8 See also In re Suburban Motor Freight, Inc., 998
7 Saco Local Development Corp., 711 F. 2d, at 448–449, we note, is not
at odds with our conclusion that unpaid workers’ compensation premiums
do not qualify for priority status. The First Circuit held in Saco that a
group life, health, and disability insurance plan fit within § 507(a)(5),
though the benefit package was unilaterally provided by the employer,
and not installed pursuant to collective bargaining. Wage surrogates,
then-Judge Breyer explained, need not be negotiated to qualify under
§ 507(a)(5) as “employee benefit plan[s],” for “Congress’ object in enacting
[that subsection] was to extend the 1898 Act’s wage priority to new forms
of compensation, such as insurance and other fringe benefits.” Id., at 449.
Saco did not involve workers’ compensation regimes, and the First Circuit
expressed no opinion on them.
8 The state fund in New Neighborhoods, it appears, did not urge that
claims for unpaid workers’ compensation premiums qualify for the higher
(a)(5) priority. The Fourth Circuit’s opinion in that case, however, sug
gests that the court assumed a private compensation carrier would be

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666 HOWARD DELIVERY SERVICE, INC. v.
ZURICH AMERICAN INS. CO.
Opinion of the Court
F. 2d 338, 342 (CA6 1993) (“Where a State ‘compel[s] the pay
ment’ of ‘involuntary exactions, regardless of name,’ and
where such payment is universally applicable to similarly sit
uated persons or firms, these payments are taxes for bank
ruptcy purposes.” (quoting New Neighborhoods, 886 F. 2d,
at 718–719; alteration in original)); LeRoy et al., Workers’
Compensation in Bankruptcy: How Do the Parties Fare?
24 Tort & Ins. L. J. 593, 623–624 (1989) (describing dis
agreement among courts on whether payments to state-run
workers’ compensation funds qualify as excise taxes under
§ 507(a)(8)). We express no view on the § 507(a)(8)(E) issue
presented in New Neighborhoods. We venture only this ob
servation: It is common for Congress to prefer Government
creditors over private creditors, see Birmingham-Nashville
Express, 224 F. 3d, at 517–518; it would be anomalous, how
ever, to advance Zurich’s claim to level (a)(5) while leaving
state-fund creditors at level (a)(8).
Zurich argues that according its claim an (a)(5) priority
will give workers’ compensation carriers an incentive to con
tinue coverage of a failing enterprise, thus promoting reha
bilitation of the business. It may be doubted whether the
projected incentive would outweigh competing financial
pressure to pull the plug swiftly on an insolvent policyholder,
and thereby contain potential losses. An insurer under
takes to pay the scheduled benefits to workers injured on
the job while the policy is in effect. In the case of serious
injuries, however, benefits may remain payable years after
termination of coverage. See 1 Larson & Larson §§ 10.02–
10.03, at 10–3 to 10–7; Lencsis 51–52. While cancellation re
lieves the insurer from responsibility for future injuries, the
insurer cannot escape the obligation to continue paying bene
fits for enduring maladies or disabilities, even though no pre
miums are paid by the former policyholder. An insurer
accorded no priority. See 886 F. 2d, at 720 (under court’s holding, “a state
agency is given, as an insurer, priority in bankruptcy when a private in
surer is not”).

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Opinion of the Court
would likely weigh in the balance the risk of incurring fresh
obligations of long duration were it to continue insuring em
ployers unable to pay currently for coverage. That consid
eration might well be controlling even with an assurance of
priority status, for there is no guarantee that creditors ac
corded preferred positions will in fact be paid. See Tr. of
Oral Arg. 31–32 (“[A]s soon as they smell bankruptcy, they’re
going to pull the plug anyway.” (Scalia, J.)); LeRoy, supra,
at 596 (noting “general reluctance on the part of private in
surers to provide debtors with the necessary Workers’ Com
pensation coverage”).
Rather than speculating on how workers’ compensation in
surers might react were they to be granted an (a)(5) priority,
we are guided in reaching our decision by the equal distribu
tion objective underlying the Bankruptcy Code, and the cor
ollary principle that provisions allowing preferences must be
tightly construed. See Kothe, 280 U. S., at 227 (“The broad
purpose of the Bankruptcy Act is to bring about an equitable
distribution of the bankrupt’s estate . . . .”); Nathanson, 344
U. S., at 29 (“The theme of the Bankruptcy Act is ‘equality
of distribution’ . . . ; and if one claimant is to be preferred
over others, the purpose should be clear from the statute.”
(quoting Sampsell v. Imperial Paper & Color Corp., 313
U. S. 215, 219 (1941))); H. R. Rep., at 186; 2 Collier Bank
ruptcy Manual ¶ 507.01, p. 507–4 (rev. 3d ed. 2005) (“[P]riori
ties under the Code are to be narrowly construed.”).
Every claim granted priority status reduces the funds
available to general unsecured creditors and may diminish
the recovery of other claimants qualifying for equal or lesser
priorities. See Joint Industry Bd., 391 U. S., at 228–229.
“To give priority to a claimant not clearly entitled thereto
is not only inconsistent with the policy of equality of dis
tribution; it dilutes the value of the priority for those credi
tors Congress intended to prefer.” In re Mammoth Mart,
Inc., 536 F. 2d 950, 953 (CA1 1976). Cases like Zurich’s are
illustrative. The Bankruptcy Code caps the amount recov

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668 HOWARD DELIVERY SERVICE, INC. v.
ZURICH AMERICAN INS. CO.
Kennedy, J., dissenting
erable for contributions to employee benefit plans. See
supra, at 659–660. Opening the (a)(5) priority to workers’
compensation carriers could shrink the amount available to
cover unpaid contributions to plans paradigmatically qualify
ing as wage surrogates, prime among them, pension and
health benefit plans.9
In sum, we find it far from clear that an employer’s lia
bility to provide workers’ compensation coverage fits the
§ 507(a)(5) category “contributions to an employee benefit
plan . . . arising from services rendered.” Weighing against
such categorization, workers’ compensation does not compen
sate employees for work performed, but instead, for on-the
job injuries incurred; workers’ compensation regimes substi
tute not for wage payments, but for tort liability. Any
doubt concerning the appropriate characterization, we con
clude, is best resolved in accord with the Bankruptcy Code’s
equal distribution aim. We therefore reject the expanded
interpretation Zurich invites. Unless and until Congress
otherwise directs, we hold that carriers’ claims for unpaid
workers’ compensation premiums remain outside the priority
allowed by § 507(a)(5).
* * *
For the reasons stated, the judgment of the United States
Court of Appeals for the Fourth Circuit is reversed, and the
case is remanded for further proceedings consistent with
this opinion.
It is so ordered.
Justice Kennedy, with whom Justice Souter and
Justice Alito join, dissenting.
The Court of Appeals for the Fourth Circuit held that pay
ments for workers’ compensation coverage are “contribu
9 The dissenting opinion nowhere homes in on the reality that including
amounts owed to workers’ compensation carriers risks diminishing funds
available to cover contributions to workers’ pension and health-care plans.

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Kennedy, J., dissenting
tions to an employee benefit plan . . . arising from services
rendered.” 11 U. S. C. § 507(a)(5). In reversing that judg
ment the Court’s opinion relies on the premise that “statuto
rily prescribed workers’ compensation regimes do not run
exclusively to the employees’ benefit.” Ante, at 655. This
rationale, however, does not suffice to justify the Court’s
holding. It does not accord, moreover, with the text or pur
pose of the bankruptcy priority defined in § 507(a)(5). These
are the main points of this respectful dissenting opinion.
I
Before commencing a more detailed discussion of the cen
tral issue, certain preliminary matters must be addressed.
To begin with, the Court states a background rule of con
struction that, when we interpret the Bankruptcy Code,
“provisions allowing preferences must be tightly construed.”
Ante, at 667. The Court links this rule with a general objec
tive in the Code for equal distribution. Ibid. That objec
tive, it is true, is acknowledged by our precedents, and we
have said that a Code provision must indicate a clear purpose
to prefer one claim over another before a priority will be
found. See Nathanson v. NLRB, 344 U. S. 25, 29 (1952).
This is different, though, from establishing an interpretive
principle of strict construction when the Code addresses pri
orities, for strict construction can be in tension with the ob
jective of “equality of distribution for similar creditors.”
Small Business Administration v. McClellan, 364 U. S. 446,
452 (1960). The bankruptcy priorities, then, should not be
read simply to give priorities to as few creditors as possible.
They should be interpreted in accord with the principle of
equal treatment of like claims. In any event the priority
provisions should not be read so narrowly as to conflict with
their plain meaning.
In accord with these principles the Court does not seem
to dispute that the payments at issue here are “contri
butions” that “aris[e] from services rendered,” § 507(a)(5).

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670 HOWARD DELIVERY SERVICE, INC. v.
ZURICH AMERICAN INS. CO.
Kennedy, J., dissenting
There seems little doubt that both these statutory re
quirements are met. Petitioner Howard Delivery Service,
Inc. (Howard), argues that a contribution must be voluntary;
and it says that because the workers’ compensation pay
ments in this case are mandatory, they cannot be contribu
tions. In some situations—for example, in discussing chari
table contributions—it is possible to read “contributions” as
Howard suggests. See Webster’s Third New International
Dictionary 496 (1971) (defining “contribution” as “a sum or
thing voluntarily contributed”). In the context of employer
payments, however, the voluntariness requirement does not
accord with the usual meaning of the word. See ibid. (de
fining “contribution” alternatively as “a sum paid by an
employer to an unemployment or group-insurance fund”).
Many federal statutes and this Court’s own cases expressly
refer to “mandatory contributions” when discussing pay
ments by employers and employees. See, e. g., 26 U. S. C.
§ 411(a)(3)(D); 29 U. S. C. § 1053(a)(3)(D); § 1054(c)(2)(C);
§ 1344; Hughes Aircraft Co. v. Jacobson, 525 U. S. 432, 435
(1999); General Building Contractors Assn., Inc. v. Pennsyl
vania, 458 U. S. 375, 394 (1982); United States v. Lee, 455
U. S. 252, 258 (1982). Even for pension and health benefit
plans, which undeniably fall within the § 507(a)(5) priority,
the payments are rarely if ever voluntary in the charitable
sense that Howard invokes. The mandatory nature of most
workers’ compensation coverage, then, fails to establish that
the payments are not contributions.
Howard’s argument that the workers’ compensation pay
ments here do not “aris[e] from services rendered, ”
§ 507(a)(5), is also unpersuasive. This phrase, according to
Howard, does not cover payments to insurance companies
because those payments are made in exchange for the serv
ices of the insurance company, not the services of the employ
ees. The Court seems to accept that insurance payments
can receive the priority, see ante, at 659, 661–662, and this
is part of the statute’s necessary operation. Even if the pay

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Kennedy, J., dissenting
ments may go to the insurance company, they are predicated
nonetheless on the employees’ performing services for the
employer. They therefore “aris[e] from services rendered”
in the same manner as do payments to a pension, health, or
disability plan. From a practical standpoint, moreover, “[t]o
allow the insurer to obtain its premiums through the priority
would seem the surest way to provide the employees with
the policy benefits to which they are entitled.” In re Saco
Local Development Corp., 711 F. 2d 441, 449 (CA1 1983) (ma
jority opinion by Breyer, J.).
II
The question that remains—and my main point of dis
agreement with the Court—is whether workers’ compensa
tion insurance qualifies as an “employee benefit plan.” The
answer, one would think, depends on whether workers’ com
pensation plans provide benefits to employees. It is clear
that they do, as the employer’s contributions enable the in
surer to give out substantial payments to employees.
Even assuming that the benefit the employer provides
must be a net benefit, this condition is easily satisfied. It
is true that, in return for receiving workers’ compensation,
employees give up some of the common-law tort remedies
they otherwise could have pursued. See ante, at 662–663.
The common-law remedies, though, typically required the
employer to be at fault; and they were further limited by the
defenses of contributory negligence, assumption of risk, and
the fellow-servant doctrine. See 1 A. Larson & L. Larson,
Workers’ Compensation Law § 2.03 (2005). As a result, only
a small percentage of injured workers received any recovery.
Ibid. Workers’ compensation plans, even considering the
tort claims relinquished, thus are generally a benefit to em
ployees. See id., § 2.03, at 2–6 (noting the “helplessness
which characterized the position of the injured worker of the
precompensation era”). Even where an employee might
have received greater damages in a tort suit, the greater

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672 HOWARD DELIVERY SERVICE, INC. v.
ZURICH AMERICAN INS. CO.
Kennedy, J., dissenting
speed and certainty of payment in workers’ compensation
is often worth the tradeoff. In many States, moreover, the
employee has a choice to opt out of the workers’ compensa
tion system, leaving him or her with traditional tort reme
dies. See, e. g., Ariz. Rev. Stat. Ann. § 23–906 (West 1995);
Cal. Lab. Code Ann. § 4154 (West 2003); Ky. Rev. Stat. Ann.
§ 342.395 (West 2005); Mass. Gen. Laws, ch. 152, § 24 (West
2004); N. D. Cent. Code Ann. § 65–07.1–03 (Lexis 2003); Pa.
Stat. Ann., Tit. 77, § 1402(b) (Purdon 2002); R. I. Gen. Laws
§ 28–29–17 (Supp. 2005). When the employee chooses work
ers’ compensation, it plainly should be considered a benefit.
For these reasons, workers’ compensation plans, on the
whole, are a benefit to employees; and indeed, the Court does
not suggest otherwise.
Instead, the Court holds that workers’ compensation is not
an “employee benefit plan” largely because it also benefits
employers. Ante, at 663. The text of the statute does not
refer to whether the plan benefits employers, nor would it
make sense to do so. Since the goal of the priority is to
protect the benefits of employees, there is little reason to
suppose that employees should lose that protection based on
the additional fact that employers may gain something as
well. Employers rarely make large payments to employee
funds out of altruism, and surely the Court should not hold
that employee benefits provide no benefit to the employer.
In the case of health benefits, for example, the employer may
receive tax breaks, good will, a healthy work force, and the
leverage to pay lower wages. Workers’ compensation can
not be distinguished on this basis from pension, health, or
disability plans, all of which the Court recognizes as covered
by the priority.
The Court’s three other bases for treating workers’ com
pensation differently also find no support in the Bankruptcy
Code. First, the Court maintains, based on the purpose and
structure of the “employee benefit plan” priority in relation
to the wage priority of § 507(a)(4), that only wage substitutes

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Kennedy, J., dissenting
are covered. Ante, at 657–660. Even assuming this propo
sition were correct, it would not lead to the Court’s conclu
sion. That is because workers’ compensation plans, as a
matter of economic realities, are wage substitutes. The
Court made this precise point in one of the first cases ad
dressing a workers’ compensation scheme: “[J]ust as the em
ployee’s assumption of ordinary risks at common law pre
sumably was taken into account in fixing the rate of wages,
so the fixed responsibility of the employer, and the modified
assumption of risk by the employee under the new system,
presumably will be reflected in the wage scale.” New York
Central R. Co. v. White, 243 U. S. 188, 201–202 (1917). Re
cent empirical studies confirm that employers pass on the
cost of workers’ compensation to employees in the form of
lower wages. See Fishback & Kantor, Did Workers Pay for
the Passage of Workers’ Compensation Laws? 110 Q. J. Econ.
713 (1995); Gruber & Krueger, The Incidence of Mandated
Employer-Provided Insurance: Lessons from Workers’ Com
pensation Insurance, 5 Tax Policy and the Economy 111 (D.
Bradford ed. 1991); Viscusi & Moore, Workers’ Compensa
tion: Wage Effects, Benefit Inadequacies, and the Value of
Health Losses, 69 Rev. Econ. & Statistics 249 (1987).
Second, the mandatory nature of most workers’ compensa
tion plans does not change the applicability of the priority.
The benefit to employees is real and significant regardless of
whether the government has mandated the benefit. While
States generally “prescribe and regulate” workers’ compen
sation and leave other benefits “to private ordering,” ante,
at 665, the presence of bargaining has no bearing on whether
contributions should receive priority. See Saco, supra,
at 448–449. Indeed, it is difficult to imagine that if States
began to mandate other kinds of benefits, those benefits
would promptly fall outside § 507(a)(5). This would amount
to saying that whenever some form of protection for employ
ees comes to be accepted as so necessary for their welfare

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674 HOWARD DELIVERY SERVICE, INC. v.
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Kennedy, J., dissenting
that it is mandated as an employer responsibility it is no
longer a benefit.
While the Court says the general practice among the
States of making workers’ compensation mandatory is just
one factor in the analysis, ante, at 665, presumably the Court
does not suggest that an optional workers’ compensation
scheme is an “employee benefit plan” simply because other
States have mandatory schemes. Assuming, then, that a
given optional workers’ compensation scheme might receive
the priority, the Court’s approach will create uncertainty
about application of the priority to the relevant payments.
Only a few States have wholly permissive regimes, see, e. g.,
Tex. Lab. Code Ann. § 406.002 (West 2006), but many more
offer exemptions for particular kinds of employers, see, e. g.,
Tenn. Code Ann. § 50–6–106(5) (2005); Mich. Comp. Laws
§ 418.118(2) (1979). Not only will application of the priority
depend on varying state laws, but also multistate workers’
compensation plans may have to be segmented for purposes
of determining bankruptcy priorities. There is nothing
in § 507(a)(5) to suggest an intent to cause this kind of
disuniformity.
Third, the existence of state funds to compensate employ
ees when their employers fail to provide workers’ compensa
tion benefits has little relevance. Once again, it is unclear
how much weight the Court places on this factor, and it
seems doubtful that the Court would remove health plans
from the priority simply because a State created a fallback
public health system. In any event state fallback funds do
not change the fact that the employer is providing a benefit;
a fallback fund simply indicates the employee could have re
ceived the benefit from somewhere else. Were it otherwise,
pension plans would also fall outside the priority, since it
appears they must provide benefits even if the employer has
defaulted on its contributions. See Central States, South
east & Southwest Areas Pension Fund v. Central Transport,
Inc., 472 U. S. 559, 567, n. 7 (1985) (citing Department of

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Kennedy, J., dissenting
Labor advisory opinion). As a practical matter, moreover,
most large multiemployer plans effectively guarantee com
pensation (unless all the employers happen to go bankrupt
at the same time), and the Pension Benefit Guaranty Cor
poration ensures payment of at least some of the promised
benefits. The exclusion of these plans from the priority,
however, would accord with neither the text of the provision
nor the commonsense notion that protecting the insurer—
whether it be a private company, a multiemployer plan, or a
government fund—is the best way to protect the employees.
See Saco, 711 F. 2d, at 449. Simply put, harm to the insurer
will be passed along to the employees, either by rendering
the insurer unable to pay or causing it to charge higher rates
for the same coverage.
Finally, even if the language of § 507(a)(5) were ambiguous,
the definition of “employee benefit plan” in the Employee
Retirement Income Security Act of 1974 (ERISA), 88 Stat.
829, as amended, 29 U. S. C. § 1001 et seq. (2000 ed. and Supp.
III), would lend considerable support to respondent’s view.
ERISA defines “employee benefit plan” as including an
“employee welfare benefit plan,” § 1002(3), which in turn
“mean[s] any plan, fund, or program which . . . was estab
lished or is maintained for the purpose of providing for its
participants or their beneficiaries, through the purchase of
insurance or otherwise, . . . benefits in the event of sickness,
accident, disability, death or unemployment,” § 1002(1). The
definition of a term in one statute does not necessarily con
trol the interpretation of that term in another statute, for
where the purposes or contexts are different the terms may
take on different meanings. See United States v. Reorga
nized CF&I Fabricators of Utah, Inc., 518 U. S. 213, 219–224
(1996). Where no conflicting purpose or context is apparent,
though, other statutes may provide at least some evidence
of Congress’ understanding. See Securities Industry Assn.
v. Board of Governors, FRS, 468 U. S. 137, 150–151 (1984);
see also ante, at 661–662.

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676 HOWARD DELIVERY SERVICE, INC. v.
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Kennedy, J., dissenting
The ERISA definition is of particular relevance here given
that “employee benefit plan” is not a generic phrase but
something closer to a term of art, with a meaning that seems
unlikely to change based on statutory context. Also, neither
Howard nor the Court cites any source for a definition of
“employee benefit plan” that would exclude workers’ com
pensation. The Court attempts to minimize the significance
of the ERISA definition by noting that ERISA exempts from
its coverage any plan “maintained solely for the purpose of
complying with applicable workmen’s compensation laws.”
§ 1003(b)(3); see ante, at 661–662. Congress exempted these
plans from coverage, but it did not exclude them from its
definition, and this is the relevant consideration. Indeed,
the language of the exclusion confirms that workers’ compen
sation is an employee benefit plan. See § 1003(b) (“The pro
visions of this subchapter shall not apply to any employee
benefit plan if . . . such plan is maintained solely for the pur
pose of complying with applicable workmen’s compensation
laws”). The exemption also belies the Court’s position be
cause it shows that mandatory workers’ compensation plans
were not included in the definition for any purpose particular
to ERISA. Instead, since they were exempted from cover
age, the most plausible reason for their inclusion (only to
be then excluded) is that Congress was simply giving the
ordinary definition of the term. There is no indication in
§ 507(a)(5) that Congress chose to depart from that ordinary
definition. By contrast, when Congress wanted a particular
provision of the Bankruptcy Code to narrow the ordinary
definition to exclude mandatory workers’ compensation, it
did so expressly by referring to those plans covered by
ERISA. See 11 U. S. C. § 541(b)(7).
An “employee benefit plan,” whether viewed as a term of
art or in accordance with its plain meaning, includes work
ers’ compensation. These are the reasons for my respect
ful dissent.